VARYING DEFINITIONS OF CHINA (continued)

4. Analyze the logic of the USG's definition of China
The USG's definition of China is incorrect. It is certainly true that the Mainland Chinese government controls most of China. But a reality check should be a REAL reality check. Thus, while it is undeniable that the ROC government in Taiwan does not control Mainland China, this does not lead to the conclusion that the Mainland Chinese government controls Taiwan. Taiwan is controlled solely by the government of the Republic of China [ROC], with no direct influence or control by the government of the People's Republic of China [PRC] from mainland China. The US government's definition of China fails its own reality test.
What then is the real reason that the US government officially recognized the PRC as a legitimate government in 1979? The real reason was the fear of the Soviet threat, the one issue that has driven and dominated US foreign policy since 1945. The US government wanted to become friends with the PRC government so that this government would bother the former Soviet Union so much that it would be to busy to think about attacking the US. The PRC government agreed but on condition that it be declared the only government over all of China, including Taiwan, with the further stipulation that its arch rival be insulted by the US government by the declaration that the ROC government cannot be called a government but be called the Taiwan Authorities and that ROC officials could not be called officials but must be called "authorities." The US government readily agreed to these conditions, contained in a document known as the "Shanghai Communique."
In 1979 the United State government formally recognized the PRC as the legitimate government of all China. It is now 1998. Is the US government's policy of playing the China Card relevant today? No, because the Soviet threat has disappeared; the evil empire, the Soviet Union, no longer exists. The game that gave life to the China Card is over. The China Card today is as useless as an ace in the hole in a poker game with no players.
In sum, the USG's definition of China fails the reality check and is designed to counter a threat that no longer exists.
5. Analyze the USG's current policies toward China in light of the policies established in 1979.
Despite the disappearance of the Soviet threat, the US government's policies toward mainland China and Taiwan has not materially changed. The US government still clings to a "one China" policy, and the US government still calls the ROC government the Taiwan Authorities.
An important business lesson here is that when changing conditions alter the viability of our thinking and methods, we must modify our thinking and methods. To hang onto ineffective methods or irrelevant ideas will cause our business to collapse.
6. Recall our definition of China.
The subject matter of this book, however, is business, not politics. This course is called, “Doing Business in Greater China Thus, our definition of Greater China includes: The e People's Republic of China [including Hong Kong] and The Republic of China in Taiwan as two separate economies.
Of these economies, the US used to do the most business with Taiwan, second most with Hong Kong and the least with mainland China. In 2009, among the three economies of Greater China the US does most business with the PRC, second most with Taiwan and least with Hong Kong. In fact, the PRC is now the US’s second largest supplier of imports.
While the PRC's takeover of Hong Kong is affecting business conditions in Hong Kong, business conditions there are still significantly different from those in Mainland China. Hence, for business purposes, we can still think of Greater China as three different economies, Mainland China, Hong Kong and Taiwan, all with different business climates.