Early Warning Memo for the United States Governmen.docx

Early Warning Memo for the United States Government
How to Deal with the Potential Conflicts in Cross-Strait
Relations
between the PRC and the ROC
Table of Contents

1.0 Executive Summary
2.0 Key Facts
2.1 The Cross-Strait Relations between the PRC and the ROC
2.2 An Important External Factor – the United States
3.0 What is at Stake?
4.0 The Important Characteristic of the Conflict Situation
4.1 The Constraints of History
4.2 The Boundedness of International Mediation
4.3 The “Mess” of Various Aspects of Cross-Strait Relations
5.0 The Reasons Why Prevention Action is Merited
6.0 Future Scenarios
6.1 Lower Feasibility - Standing with the ROC
6.2 Medium Feasibility - Exiting the “Game” or Keeping Silent
6.3 Higher Feasibility - Standing with the PRC
7.0 Conclusion
References
1.0 Executive Summary
In my 2017, the 23rd annual meeting of North American
Taiwan Studies Association (NATSA) was held at Stanford
University. The experts and scholars, who focused on
researching the relevant issues about Asian-Pacific region, such
as Kharis Templeman, Erin Baggott Carter, Thomas Fingar, and
Lanhee J. Chen, analyzed the potential conflicts in Cross-Strait
relations between People’s Republic of China (PRC-China) and
Republic of China (ROC-Taiwan) on this
meeting.[footnoteRef:1] During the process of discussing the
potential conflict between PRC and ROC, the United States was
highlighted as the most important mediator that could influence

the trends of the conflict between PRC and ROC, and that was
able to provide it with windows of opportunity. This early
warning policy memo will examine the three scenarios with
different degrees of feasibilities by regarding the United States
government as the most suitable mediator. The key facts of
Cross-Strait relations between the PRC and the ROC will be
demonstrated, and the important characteristic of the conflict
situation will also be analyzed. Based on them, this memo will
discuss the points that are at stake, and the reasons why
prevention action is merited for Cross-Strait relations between
the PRC and the ROC. After analyzing the pros and cons of
three future scenarios, the last one, which the United States
government stands with the PRC and supports “One-China”
policy, reveals the relatively higher feasibility. [1: Williams,
Jack F. China Review International 10, (2017): 382-85. ]
2.0 Key Facts
2.1 The Cross-Strait Relations between the PRC and the ROC
Since the second Chinese Civil War happened in 1937, the
issues about the relations between PRC and POC, which were
also called as Cross-Strait relations (Haixia Liangan Guanxi),
have become seriously sensitive topics in both of the two
political entities that were geographically separated by the
Taiwan Strait in the west Pacific Ocean. In 1949, the second
Chinese Civil War led to the political status that the mainland
of China being governed by the PRC, instead, Taiwan pertains
to the ROC, which means the divisive situation of these two
regimes has been going on for almost 68 years.[footnoteRef:2]
[2: Brands, Henry W. "Testing massive retaliation: credibility
and crisis management in the Taiwan Strait." International
Security 12, no. 4 (1988): 124-151.]
From a geographical perspective, Taiwan and China are
separated by the Taiwan Strait. The military conflict, military
maneuver, and arms race between these two regimes may lead to

the potential crisis of a comprehensive war. From the historical
perspective, there have been three Taiwan Strait Crises
happening since 1954, but they were just regarded as regional
military actions, or unimplemented plans rather than a real
armed conflict. Among these three crises, the 1958 Taiwan
Strait Crisis (The Second Taiwan Strait Crisis) caused the
serious casualties on both sides: the total number of fatalities on
the PRC’s side was 678; and there were 439 deaths and 1,870
wounded on the ROC’s side. Moreover, in 1995, the military
maneuver of the PRC caused the third crisis.[footnoteRef:3]
However, the war did not break out, and it did not lead to any
fatality directly. [3: Liu, Wenling, Gert Spaargaren, Nico
Heerink, Arthur PJ Mol, and Can Wang. "Energy consumption
practices of rural households in north China: Basic
characteristics and potential for low carbon
development." Energy Policy 55 (2013): 128-138.]
The core incompatibility in Cross-Strait relations is the
qualitative asymmetries about the political statues and identities
of PRC and ROC. In the 1970s, PRC, that was led by CCP,
became the only legal representative of China in the United
Nations by replacing KMT, and ROC lost the representation of
China. Afterwards, PRC did not allow ROC to use “China” as
its national identity to attend the international system unless
ROC accepted “One-China” policy and the unification would be
achieved. These facts were reflected by the contents of United
Nations GA Resolution 2758, which was passed in order to
respond to the United Nations General Assembly Resolution
1668 that required any change in the representation of PRC in
the United Nations.[footnoteRef:4] After that, most of countries
in the international system started accepting and supporting
“One China” policy, which compressed the diplomatic space of
ROC, and ROC’s external relations with other countries such as
Honduras and Guatemala. In Taiwan, KMT supports One-China
policy with respective interpretations, while DPP emphasizes
“One Country on Each Side”, which means that PRC and ROC

are two different countries, as opposed to two separate political
entitles within the same country of “China”. Therefore, the
political status and the identity of a country is closely related to
the ruling party. [4: Chen, Lung-chu, and W. M. Reisman.
"Who Owns Taiwan: A Search for International Title." The Yale
Law Journal 81, no. 4 (1972): 599-671. doi:10.2307/795213.]
Over the years, both the PRC and the ROC have tried their
best to modify the Cross-Strait relations and to keep their
benefits by utilizing different kinds of strategies and tactics
such as using some strategies with forces and weapons,
negotiating, and drawing supports from other countries.
Generally, PRC has been relatively promoting the unification of
PRC and ROC, and ROC has been standing on a relatively
passive position and trying to achieve the independence. A very
typical instance is the three Taiwan Strait Crises, especially the
second crisis and the third one. During this long process, 1958
Taiwan Strait Crisis (The Second Taiwan Strait Crisis) is
regarded as a sign that can demonstrate the outburst of the
previous conflict in the Cross-Strait relations. In this war, the
islands of Kinmen and the nearby Matsu Islands along the east
coast of the PRC were shelled by PRC. In order to emancipate
Taiwan from the Chinese Nationalist Party (Kuomintang -
KMT), PRC launched the war, which is the only direct military
contest between PRC and ROC until now, with land force, sea
force, and Air Force. And it caused more than 3000
fatalities.[footnoteRef:5] [5: JIAN, CHEN. "BEIJING AND
THE TAIWAN STRAIT CRISIS OF 1958." In Mao's China and
the Cold War, 163-204. University of North Carolina Press,
2001. ]
As for some negotiations, the most representative one is 1992
Consensus. In fact, 1992 Consensus is not a particular meeting;
instead, it is a political term that refers to the outcomes of a
meeting that was organized in Hong Kong in 1992 between
some semis-official representatives of PRC and ROC. The main

idea of 1992 Consensus is closely related to “One-China” policy
and another political statement, “One-China with respective
interpretations”. Although the government of PRC thinks highly
of the importance of 1992 Consensus, it has not been accepted
by the government of the ROC, and even DPP denied the exist
of 1992 Consensus.[footnoteRef:6] [6: Chen, Dean P. "The
Strategic Implications of Ma Ying-jeou's "One ROC, Two
Areas" Policy on Cross-Strait Relations." American Journal of
Chinese Studies 20, no. 1 (2013): 23-41. ]
Based on the circulation of personnel freedom, nowadays, the
economic activities, trades, and other cooperation between PRC
and ROC have been very close. On November 07, 2015, the
former president of ROC, Ma Ying-jeou, and Xi Jinping met
each other in Singapore, and had a friendly conversation about
the development of Cross-Strait relations. However, since the
reign of Tsai Ing-wen in 2016, and the PRC has added much
pressure to ROC because PRC government worried about the
Cross-Strait policy of DPP government so much.[footnoteRef:7]
In this way, the communications between PRC and ROC were
weakened. [7: Harrison, Mark. "A YEAR OF LOOKING
BACKWARDS." In Control, edited by Golley Jane, Jaivin
Linda, and Tomba Luigi, 259-68. Australia: ANU Press, 2017. ]
(Link: http://thechinadesk.blogspot.com/2007/07/roc-vs-
prc.html)[footnoteRef:8] [8: The China Desk. The PRC vs. The
ROC. http://thechinadesk.blogspot.com/2007/07/roc-vs-
prc.html. (Accessed July 24, 2007).]
(Link:https://en.m.wikipedia.org/wiki/Third_Taiwan_Strait_Cris
is#/media/File%3ATaiwan_Strait.png)[footnoteRef:9] [9:
Global Security.org. Taiwan Strait.
https://en.m.wikipedia.org/wiki/Third_Taiwan_Strait_Crisis#/m
edia/File%3ATaiwan_Strait.png. (Accessed March 23, 1996). ]

2.2 An Important External Factor – the United States
Besides PRC and ROC, there are also some external actors that
involved in the tension of the Cross-Strait relations, and the
most important one is the United States, which is seen as the
international actor that can play the leverage in the current
situations.
At the end of 2016, before Donald Trump became the president
of the United States, he tried to use One-China policy as a
bargaining chip to promote the negotiations about foreign trade
with PRC. Moreover, he also tried to use ROC as a “pawn” to
access the negotiating advantages of some issues such as DPRK
(Democratic People’s Republic of Korea) nuclear issue, and
territorial disputes in the South China Sea, in order to ask China
to make some concessions. On February 09, 2017, President
Trump and President Xi had a further conversation on phone. In
that conversation, President Trump stated that the United States
will constitute strengthening the relations with China and
following the long-standing One-China policy.[footnoteRef:10]
[10: O’HANLON, MICHAEL E., and JAMES STEINBERG. "A
Crossroads in U.S.-China Relations." In A Glass Half Full?:
Rebalance, Reassurance, and Resolve in the U.S.-China
Strategic Relationship, 1-10. Washington, D.C.: Brookings
Institution Press, 2017.]
On the other hand, the United States also can be regarded
as the key connector in Cross-Strait relations. Under the tense
situation of Cross-Strait relations, the communications and
cooperation between PRC and ROC have been receded on some
aspects. In this case, the United States becomes the hinge that
promote the “indirect communications” between PRC and ROC.
ROC government tried to achieve the relative independence by
getting the supports from the United States, one of the Great
Powers that is able to competitive for PRC on the international
stage. For PRC, Sino-America relations cannot be easily broken

as well, therefore, PRC government will not allow ROC to make
any negative effects on Sino-America relations, and does not let
the conflict between PRC and ROC influence the relations
between PRC and the United States. In a sense, PRC and ROC
can understand some conditions of each other, combing some
information, and expressing attitudes toward some specific
issues by keeping in touch with the US.
3.0 What is at Stake?
The above-mentions contents demonstrate that although
currently there is not any ongoing armed conflict happening
between the PRC and the ROC, the tension of Cross-Strait
relations may lead to the potential conflicts between China and
Taiwan. There are several points of the potential conflicts in
Cross-Strait relations are at stake.
First, the historical backgrounds of Cross-Strait relations show
that both the two sides have repeatedly tried to use weapons and
violence to deal with the incompatibility of Cross-Strait
relations, and that the military exercises have taken place for
many times since 1937. Any military exercises or battles might
evolve into serious wars between the PRC and the ROC.
Second, the direct negotiations between the political
representatives of those two regimes, such as 1992 Consensus,
did not make any obvious success. In this case, the
interventions of other mediators (countries, international
organizations, non-governmental organizations, etc.) may be
necessary to promote the further communications between the
PRC and the ROC, and ensure the commitments that they
reached in the consensus can be achieved effectively. Also,
complicated factors have turned the Cross-Strait relations
between PRC and ROC into a stalemate, because the conflict
dynamics of these relations implicate the benefits of countries
in Asia-Pacific area, even the whole world rather than just
influence the conditions of China and Taiwan.
Third, with the development of globalization, the amount of the
cross-regional communications between China and Taiwan have

been increasing. However, the communications between China
and Taiwan were implemented by mainly focusing on economic
respect such as international trades and the cultural aspect such
as the exchange activities for youths. In fact, with the obstacle
of the incompatibility of Cross-Strait relations, the PRC and the
ROC are still trying to avoid developing many political
cooperation.
On some aspects, these points that are at stake can be
regarded as the “blasting fuse” of the outburst of the potential
conflicts in Cross-Strait relations. In other words, dealing with
these points are the significant steps of the process of
implementing early warning or other prevention actions.
4.0 The Important Characteristic of the Conflict Situation and
the Main Challenges
4.1 The Constraints of History
The tension of Cross-Strait relations between the PRC and the
ROC is not a new issue that has happened recently, instead, it is
defined as a historical issue. In this case, the difficulties of
preventing and solving the potential conflicts in Cross-Strait
relations have been improved because of three reasons.
First, the governments of the two sides would like to stay
in the “negative shadow” of the historical backgrounds of
Cross-Strait relations rather than look forward or predict the
positive effects that will appear if the tension of Cross-Strait
relations can be mitigated. In the modern society, the DPP still
concentrated on emphasizing the negative effects that were
caused by Taiwan Strait Crises, and utilized them as example to
support their ideas about denying “One-China” policy.
Second, some of the historical attempts that were made by
people in order to modify Cross-Strait relations between the
PRC and the ROC, such as 1992 Consensus and Wang-Koo
summit, have their shortcomings. The failures of those
historical attempts have made the people on both sides lose the
confidence of dealing with the relevant issues. On some aspects,
1992 Consensus was not even a particular or official meeting

between PRC and ROC. Although the government of PRC thinks
highly of the importance of 1992 consensus, some of the
contents of this meeting have not been accepted by the
government ROC, and even the Democratic Progressive Party
(DPP)[footnoteRef:11] in Taiwan would like to deny the
relevant meanings and uses of the consensus.[footnoteRef:12] In
this case, the “One China” policy has not been implemented
successfully. And this was the major causes of the failure of the
consensus. As for the Wang-Koo summit, it refers to another
attempt at a cross-strait meeting whose purpose is to continue
pursuing the meanings of 1992 consensus. The first meeting
took place in 1993 between the chairman of ARATS, Wang
Daohan, and the chairman of Straits Exchange Foundation
(SEF), Koo Chen-fu. The summit also contained some follow up
meetings up to 1998. Based on the fact that the Cross-Strait
relations were not improved obviously, they tried to organize
the third meeting in 1999, however, they did not make success
because Lee Teng-hui, the President of Taiwan and Chairman of
Kuomintang (KMT) from 1988 to 2000, published an article
called Cross-Strait Tension: Special State to State, which made
the Cross-Strait relations became very tense.[footnoteRef:13]
Despite the communication efforts between the two groups,
there was a lengthy gap between the two meetings that
prolonged the peace process. Both groups should hold meetings
in a sequential manner within a specific timeframe that will lead
to a negotiated settlement. [11: The Democratic Progressive
Party (DPP): a liberal political party in Republic of China, and
the dominant party in the Pan-Green Coalition. ] [12: Shiquan,
Xu. "The 1992 Consensus: A review and assessment of
consultations between the association for relations across the
Taiwan Strait and the straits exchange foundation." American
Foreign Policy Interests 23, no. 3 (2001): 121-140.] [13:
Lijun, Sheng. China and Taiwan: Cross-strait relations under
Chen Sui-bian. Vol. 3. Institute of Southeast Asian Studies,
2002. 5-10.
]

Third, most of the older generation, who immigrated to
Taiwan during the Second Chinese Civil War, would like to
support “One-China” policy, because they preferred to regard
China as their real home country and their “root”. On the
contrary, most of the younger generational, who grow up in
Taiwan, their thoughts were not influenced by Chinese history a
lot. They satisfied with the current social situations of Taiwan,
and they were not eager to achieve the unification of the
mainland of China and Taiwan.
4.2 The Boundedness of International Mediation
When the regional mediation is not able to deal with the local
issues in some particular areas well, the local governments
normally would like to improve the regional mediation to the
global level. As for Cross-Strait relations between the PRC and
the ROC, on the surface, global mediation seems to be the best
tool to deal with the potential conflicts of these relations,
because the tension of Cross-Strait has been influenced by
external factors for a long time. In addition, the conflict
situations of the Cross-Strait relations are also related to some
external factors, because some countries, such as the members
of ASEAN, have many economic and cultural cooperation with
both the PRC and the ROC. Some Southeast Asian countries,
such as the Philippines, can be seen as the ligament in Cross-
Strait relations. ROC needs the international trade with some
Southeast Asian countries to support Taiwan’s economy. In this
way, although those Southeast Asian countries support One-
China policy, ROC still does not want to arouse any clash with
them. Although those Southeast Asian countries may not be able
to improve the Cross-Strait relations, they maintained the
stabilizing of the Cross-Strait relations indirectly. On the other
hand, it can indirectly reveal that some Southeast Asian
countries seem to be playing the relatively embarrassing roles in
Cross-Strait relations, furthermore, their embarrassing roles
make them not be able to being the powerful mediators to solve

the potential conflicts in Cross-Strait relations.
In a sense, utilizing international mediation to solve the
potential conflicts in Cross-Strait relations possible but not
likely, because the amount of the suitable mediators is limited.
Although the governments of the PRC and the ROC might also
try to prevent the potential conflicts in Cross-Strait relations by
applying for the international mediations and utilizing
systematic prevention, the main incompatibility of Cross-Strait
relations should not be ignored: PRC did not allow ROC to use
“China” as its national identity to attend the international
system unless ROC accepted “One-China” policy and the
unification would be achieved. Therefore, if the potential
conflicts in Cross-Strait relations happen someday, the PRC and
the ROC will not be able to ask helps from the Peacekeeping of
United Nations (UN), because the ROC has not been able to
become a member of UN. In this case, the most suitable
mediators are some powerful countries, such as the United
States, which can intervene the Cross-Strait relations as an
individual role. The memo will focus on analyzing the role of
the United States instead of discussing all of the suitable
mediators.
4.3 The “Mess” of Various Aspects of Cross-Strait Relations
Before promoting the conflict prevention, one of the
significant steps that needs to be done is identifying the conflict
situations. A complicated conflict that is related to the various
aspects of the main actors, such as economic respect, political
aspect, and military filed, will provide mediators with more
challenges. Related to Cross-Strait relations between the PRC
and the ROC, the PRC tried to intervene the issues about what
kinds of political identities that were used by the ROC to join
international organizations and international meetings.
However, the PRC did not try to prevent other kinds of
communications between the ROC and the whole international
system. For instance, in 2003, the PRC denies the political

identity of the ROC, and prevented the ROC to join the World
Trade Organization (WTO) as a country. On the other hand, the
PRC supported some Taiwanese representatives to join the
conference about how to treat severe acute respiratory syndrome
(SARS), which was organized by WTO.[footnoteRef:14]
Obviously, it is hard for mediators to find the point of entry to
deal with the potential conflicts in Cross-Strat relations,
because the potential conflicts are related to various aspects,
and the identities of those potential conflicts are too fickle.
[14: Cho, Hui-Wan. "China-Taiwan Tug of War in the
WTO." Asian Survey 45, no. 5 (2005): 736-55.
doi:10.1525/as.2005.45.5.736.]
5.0 The Reasons Why Prevention Action is Merited
“In the 21st century, to achieve the complete reunification of
the People’s Republic of China is the common aspiration of all
Chinese people”.[footnoteRef:15] This is one of the statements
of Xi Jinpin, the current General Secretary of the Communist
Party of China, the President of the People’s Republic of China,
and the Chairman of the Central Military Commission. At the
first meeting between political leaders of the two sides of the
Taiwan Strait since the end of the Chinese Civil War in 1949,
Xi-Ma Meeting on 07 November 2015 in Singapore, Xi
obviously expresses the firm attitude of PRC’s government
towards dealing with the conflicts between the two sides of the
Taiwan Strait.[footnoteRef:16] [15: Chai, Winberg. "Xi Jinping
and Ma Ying-jeou's Historic 2015 Meeting in Singapore: An
Interpretation." Asian Affairs: An American Review 42, no. 4
(2015): 195-202.] [16: Ma: Ma Ying-jeou, a Taiwanese
politician who served as the President of the Republic of China
from 2008 to 2016.]
At present, Cross-Strait relations are related to not only
the interests of both sides of Taiwan Strait, but also the
situations of Asia-Pacific region, and even the world’s strategic

layout of power and global security. Both China and Taiwan
have been playing important roles in some global issues, such as
the territorial disputes in South China Sea. The consciousness
about independence in ROC and the consciousness of
unification in PRC are still colliding. For the United States, the
precondition that they could use Taiwan as a “pawn” to develop
Sina-US relations is the stability of Cross-Strait relations
between the PRC and the ROC. Therefore, the purposes of
stabilizing Cross-Strait relations is not only to protect the
peaceful atmospheres of the PRC and ROC, but also to avoids
the outbreaks of some international conflicts.
6.0 Future Scenarios
Since the United States is regarded as the one of the important
mediators that can be helpful to deal with the potential conflicts
in Cross-Strait relations between the PRC and the ROC, the
United States government will be seen as the main audience of
this memo. In this case, the three scenarios that would be
demonstrated in this memo are also related to the initiatives of
the United State government.
6.1 Lower Feasibility - Standing on One Side
Based on one of the second characteristic of the conflict
situation that was analyzed in this article, it seems that the
United States have not tried to clarify its position in Cross-
Strait relations. On the one hand, the United States did not want
to break its peaceful relations with Taiwan. On the other hand,
the United States would like to regard the rise of China’s power
as a kind of threat to the leading role of the United States on the
international stage. Facing the new “competitor”, the United
States prefer to improve the Sino-U.S. relations rather than
promote any confrontations openly. Although the political
actions of the United States cannot be defined as keeping a
neutral attitude towards Cross-Strait relations between the PRC
and the ROC, the certain thing is that the United States tried to
confound its position in these complicated relations. In this

way, once the United States clarifies its position, and stand with
one of the two sides of Cross-Strait relations, there will be
hugely meaningful changes happening on the current conflict
situations of Cross-Strait relations between the PRC and ROC.
However, standing with different sides will lead to totally
different results.
If the United States decides to stand with the ROC, and
supports the independence of the ROC, it will arouse the
dissatisfaction of the PRC, and even it may cause the
breakdown of the Cross-Strait relations between the PRC and
the ROC. Therefore, the feasibility of this scenario is relatively
lower than the other two scenarios.
In addition, relating to the current situation that the United
States tried to cooperate with the PRC to deal with its conflicts
with North Korea, in this way, the United States will not be
willing to lose one of its important “partners”. Back to a point
that has been mentioned in this memo, the rise of China’s power
was seen as a kind of threat to the leading role of the United
States in the global system. Currently, the PRC is implementing
“One Belt One Road” initiative, a development strategy that is
proposed by Xi, which focuses on developing the connectivity
and cooperation between Eurasian countries, primarily the PRC,
the land-based Silk Road Economic Belt (SREB) and the
oceangoing Maritime Silk Road (MSR).[footnoteRef:17] If the
PRC makes success by developing this initiative, its position on
the international stage will be improved a lot. Based on the
rationality that the United States would not like to make
negative effects on its external relations with a country that is
developing with a positive trend, the United States government
will not promote this scenario, which stands with the ROC,
easily. [17: Murphy, David. "ONE BELT ONE ROAD:
INTERNATIONAL DEVELOPMENT FINANCE WITH
CHINESE CHARACTERISTICS." In Pollution, edited by
Davies Gloria, Goldkorn Jeremy, and Tomba Luigi, 245-52.
Australia: ANU Press, 2016.]

6.2 Medium Feasibility - Exiting the “Game” or Keeping Silent
Although there are some potential conflicts in Cross-Strait
relations, they have not been developed to be ongoing armed
conflicts. As the most important mediator, the United States
could continue confounding its position in these complicated
relations and keeping silent in order to repress the outburst of
those conflicts. Even the United States can exit the “game”
between the PRC and the ROC so that it can avoid facing those
conflicts. However, this scenario is not perfect as well, and it
has the medium feasibility in these three scenarios.
First, on the surface, without the obvious intervention of
the United States, Cross-Strait relations still can keep the
original status. However, it is still risky, because those potential
conflicts, which look like the “time bombs”, have not been
solved.
Second, the United States have realized the importance of
stabilizing its relations with both the PRC and the ROC,
because they can help the United States achieve some particular
goals. In other words, the United States will not lose the
interests to the PRC and the ROC, or give up its external
relations with them.
6.3 Higher Feasibility – Standing with the PRC
Standing with the PRC does not mean that the United States and
the PRC would isolate the ROC or make it exist as a separated
status. Instead, even the United State supports “One-China”
policy, which may be contrary to the original will of the ROC,
the ROC will still try to keep a relatively friendly relation with
the United States.
First, from the perspective of the ROC, it needs the supports
from the United States on different aspects such as arm sales,
technology supports, etc. Also, if the United States decides to
stand with the PRC, the ROC will not be able to confront with
them because its abilities are not strong enough. Therefore, if
the United States stands with the PRC, Cross-Strait relations

between the PRC and the ROC will not be broken.
Second, after standing with the PRC and clarifying its position
in Cross-Strait relations, the United States could design the
relevant policies or rules to deal with the core incompatibility
of Cross-Strait relations. For example, the United States can
lead the PRC to support the ROC to develop the cultural and
economic communications with other countries or international
organizations. However, when the communications and
cooperation between the ROC and other countries, the ROC will
be asked to approve “One-China” policy. Obviously, compared
to the other two scenarios, the feasibility of this scenario is
relatively higher, because this scenario can help the United
States, the PRC, and the ROC achieve the main goal that
dealing with the potential conflicts in Cross-Strait relations
effectively. Also, this scenario takes care of the benefits of all
the United States, the PRC, and the ROC well, and it can be
used to keep a balance in Cross-Strait relations between the
PRC and the ROC.
7.0 Conclusion
Although modifying Cross-Strait relations between the PRC and
the ROC may be a long-term process, the early warning and
suitable prevention toward the potential conflicts in these
complicated relations should promoted as soon as possible.
During the process of promoting the prevention action, a
suitable scenario should have the functions of stabilizing the
Cross-Strait relations, providing the mediators such as the
United States, with opportunities to play important roles, and
containing the relatively high feasibility. In this case, the
scenario that the United States stands with the PRC and
supports “One-China” policy can be considered as the window
of opportunity towards the tension of Cross-Strait relations
between the PRC and the ROC. Although the scenario that were
demonstrated in this paper still have some weaknesses, the
feasibility of them is relatively higher than formerly historical
trails. In fact, the reunification of PRC and ROC is not only the

common goal of some people in PRC and ROC, but also the
inevitable trend of the positive developments of Cross-Strait
relations. As for the internal factors, although there are some
powers such, as some people in DPP, in Taiwan would like to be
isolated from China, there are also some people in KMT would
like to support “One China” policy. In order to keep a relatively
peaceful atmosphere in the Cross-Strait relations, PRC would
not like to advocate wars, instead, the PRC government always
keep a optimistic and friendly attitude towards the issues about
the Cross-Strait relations. However, objectively, without the
supports from other countries, especially the United States, the
military power of ROC cannot compete with PRC. As for the
external environment, Taiwan still cannot be identified as a
state on the international stage or join the United Nations
successfully under the intervention of China. Obviously,
achieving the unification will be helpful for both PRC and ROC
to improve their positions in the international arena.
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e-.
1 L1al.J't,v ·
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'-c)i, ril I ca

'"' (.,'_,._,.� l:Ge:ir:irna11y
Corporate Forn1ula Does l"'-Tot Fit the
Gen11an Culture
1
Abstract
In the United States, Wal-Mart customers are greeted with a
smile, escorted to
the item_ they're looking for, and watch their purchases being
bagged by an
employee_ These aspects of Wal-Mart; s culture were a
complete failure in
Germany, however, when the company expanded there in 1997.
Wal-Mart
also failed on other counts, such as recognizing the status of
unions in Gennany
and the importance of store location_ What eventually happened
to Wal-Mart
in Germ.any, and how could it have been prevented? What did
W al-Martleam?
This case examines the cultural mishaps of America's largest
discount retailer.
Introduction
Wal-Mart has become a household name in tht; United States,
and in some
parts of the world outside the United States. With low prices
and a large aiTay
of products, Wal-Mart superstores have becorne the chosen
"one-stop shop"
for many consumers.

Gern1ans, however, don't view Wal-Mart in the same way. In
late 1997,
Wal-Mart decided to expand into Germany by first acquiring
two retailers for
a total of 95 store locations_ But Wal-Mart soon learned that its
American
model simply did not work there_ On so many levels and in so
many ways, it
was-_an abject failure_
B-rief Ovenr:iew pf Wat-Ivfart
I
Sam Walton and his brother opened the first Wal-Mart store in
Rogers,
Arkansas in 1962, generating more than� l million in sales
during the first year
of operations_ Wal-Mart expanded quickly and, by 1967, the
brothers owned
24 stores with sales over 1n2_6 million_ The cornpany
incorporated in 1969
and was listed on the New York Stock Exchange two years later.
Focusing
operations in sn1all towns, in 1977, the company expanded into
Michigan and
Illinois and by 1980 there were 276 Wal-Mart stores across the
United States
(Wal-Mart Stores, 2016).
rnissteps in Germany were costly; however, hopefolly it will

force them to be
n10re culturally sensitive in foture expansions.
Note
1 Authors: Chen-jun Yu, G., Langharner, T., Powelson, S.,
Foose, B., Ripple,
M.,
O'Neill; B., and Tuleja, E. (Ed.) (2015).
References
Arunn1aba13. (2011): FDI in Indian retail market case study to
Wal-Mart Mexico
market. Studymode.corn.: Business and economy, marketing and
advertising.
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Bhan, Niti, & Toscano, Manuel. (2006). Lessons from Wal-
Mart: Five common mis-
takes when brands cross borders. American Imtitute of Graphic
Arts. Retrieved from.
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when-brands-cross-
borders/ (accessed August 4, 2016).
Daniel, Fran. (2012). Head ofWal-Mart tells WFU audience of
plans for growth over
next 20 years. T.fl"inston-Salem Journal. Retiieved from WWW
joumalnow.com/
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4.ht:ml (accessed August

4, 2016).
Ewing, Jack. (2005). Wal-Mart: Struggling in Germany.
Bloomberg Businessweek lviaga-
zine. Rel1.ieved from www.bloomberg.com/news/articles/2005-
04-10/wal-mart-
struggling-in-gennany (accessed August 1, 2016).
Gereffi, Gary, & Ch1istian, Michelle. (2009). The impacts
ofWal-Mart: The rise and
consequences of the world's dominant retailer. The Annual
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573-91.
ICMR. (2004). Wal-Mart's Gemun misadventure. Retrieved from
www.icnuindia.
org/ casestudies/ catalogue/Business%20Strategy2/B
usiness%20Strategy%20W al-Mart
%20Gem1an%20Misadventure.htrn (accessed August 4, 2016).
Landler, Mark. (2006). Wal-Mart gives up Gennany-Business-
Intemational Herald
Tribune. The New York Times. Retrieved from
www.nytimes.com/2006/07 /28/
business/worldbusiness/28iht-walrnart.2325266.htrnl?_r= 1
(accessed August 4, 2016).
Landler, Mark, & Barbaro, Michael. (2006). Wal-Mart finds that
its fonnula doesn't fit
every culture. The New Yorle Times. Retrieved from
www.nytin1es.com/2006/08/
02/business/worldbusiness/02walmart.html?pagewanted=
J&_r=2 (accessed AL,gust
4,201�. _ ·.

Nussbaum, Bruce. (2006). Did Wal-Mart smile too much in
Gen'nany? Bloombe1g
Businessweek Innovation and Design. Retrieved from
www.businessw�ek.com/
innovate/NussbaumOrillesign/ archives/2006/07 /why _did_
walmart.html (accessed
August 1, 2016).
Wal-Mart Stores. (2016). Our history: Timeline. Retrieved from
http://coi-porate.
walmart.com/ our-story/he1itage/history-tirneline (accessed
August 1, 2016).
Zinunerman, Ai.m. (2006). With profits elusive, Wal-Mart to
exit Germany: Local
hard discounters undercut retailer's prices; "Basket-splitting"
problems. T7u T,Va/l
Street Joumal. Retrieved from
http://online.wsj.com/news/articles/SB 11540723
8850420246 (accessed AugFst 1, 2016).
Walmart Case Questions
Walmart Case Study Reference
Tuleja, E. A. (2017). International Communication for Global
Business. New York: Routledge.
Instructions:
You should choose a partner to complete this case study with.
The partner does not need to be a person in your group.
You must include a reference page and in-text citations using
APA. There is a video on APA under the first tab “Resources”

on Moodle if you need to refresh your understanding of
paraphrasing, direct quotes, in-text citations, reference page,
etc.
Check out the resource “Websites for Intercultural Information”
that is listed under the first tab “Resources” on Moodle. You
may refer to other websites not listed on this resources page for
this case study – just be sure to cite them.
Questions
1. As you know, the iceberg and the onion are metaphors for
culture. Provide examples from the case study that indicate
how the behaviour of German customers, employees,
management, etc., (the outer layer of culture) is reflective of
German cultural values (a deeper layer of culture). Be sure to
explain what the German values are. Cite your sources.
2. What could Walmart have learned from Hofstede’s Cultural
Dimensions that may have provided some insight into German
culture and the challenges the company might have expected?
Consider all cultural dimensions and analyze the relevant ones.
Explain in detail. Cite your sources.
3. (a) How should Walmart’s North American business
management strategies change when entering a collectivist
culture such as China? Cite your sources.
(b) What can Walmart learn from corporations/ventures that
have been successful (or unsuccessful) in China? Cite your
sources.
4. Discover three things about doing business in Germany
and/or German consumer behaviour that this case did not
include that you should be aware of. Cite your sources.

5. Discover three things about the German culture that interests
or surprises you that are not cited in this case. Cite your
sources.

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