Heads of state from across the Asia Pacific will congregate in Peru this November for the annual APEC Economic Leaders' Meeting. As the global political heavyweights gather around the diplomatic roundtable in Lima however, one placard may seem out of place.

Squeezed between household names like Barak Obama, Vladimir Putin and Shinzo Abe will sit a Taiwanese politician from a minor opposition party, under the banner of ‘Chinese Taipei’.

A name for a nation that does not exist, ‘Chinese Taipei’ is a political compromise. It’s a label for one of Asia’s four great ‘economic tigers’ that must perform a delicate balancing act to win the right for global recognition. The diplomatic status of ‘Chinese Taipei’ or Taiwan as it is more commonly known, is a quirk of history – a by-product of a 70 year-old civil war over the governance of Asia’s oldest superpower.

[caption id="attachment_5005" align="aligncenter" width="500"] Taiwanese politician Lien Chan greeting Russian President Dmitry Medvedev at the 2008 APEC Forum[/caption]

In the early hours of 10 December 1949, Communist troops laid siege to the final Nationalist stronghold in China – Chengdu. Chiang Kai-shek and his Nationalist Government, battered and bruised retreated to safety of Taiwan. The Nationalists however, much like the Communists, insisted that their government continued to represent all Chinese people, both on the island and the mainland.

While for much of the Cold War, most Western powers including Washington and Canberra recognised the administration operating in Taiwan as the legitimate government of ‘China’, it became apparent in the 1970s that the People’s Republic of China in Beijing posed greater economic and political utility in the fight against the Soviet Union.

And so, in 1971, representatives of Taipei walked out of the UN General Assembly, an organisation of which they were founding members, as Resolution 2758 was passed. It recognised the People’s Republic of China as “the only legitimate representative of China to the United Nations.”

The following decades saw a string of memorandums and communiques, with the United States promising to withdraw recognition and reduce the quantity of arms provided to Taiwan in exchange for an assurance from Beijing that Taiwan would be able to engage in capitalism and maintain a degree of autonomy – “one China, two systems” in the words of Deng Xiaoping.

But the China of the 1990s, undergoing turbulent economic and structural reforms, was ill-equipped to represent the diplomat and economic interests of a democratic, capitalist Tiger, eager to engage with the region.

The compromise was ‘Chinese Taipei’.

Taiwan would be permitted to participate in multilateral organizations, not on the basis of legal sovereignty, but on its role as an autonomously governed economy with significant regional economic interests.

The restrictions placed on this new ‘Chinese Taipei’ were not however limited to simply a humiliating name. A Memorandum of Understanding signed between China, Taiwan and APEC in 1991 significantly limited Taiwan’s space in the organisation, specifying that Taiwan is not permitted to send its President to the annual APEC economic leaders meeting or its Foreign Minister to the Ministerial Meetings.

Instead a strange diplomatic ritual has emerged, in which the APEC secretariat sends a special envoy to Taipei to deliver a letter of invitation to Taiwan’s President, who is then expected to politely decline. A second envoy then delivers an invitation to a candidate that has been both elected by the president and approved by the APEC host nation.

For a country with limited diplomatic means, the ability to appoint an APEC representative has become an unconventional but important tool for maintaining balance on the tightrope that is cross-strait relations.

Tsai Ing-wen, Taiwan’s newly elected president, has used the APEC candidate selection process to extend an olive branch to Beijing. Representing ‘Chinese Taipei’ in Peru later this month is James Soong, leader of the People First Party – a small pro-China, minor opposition party with only two seats in the Taiwanese Legislative Yuan.

[caption id="attachment_5035" align="aligncenter" width="800"] Leader of the Taiwanese People First Party and representative of Chinese Taipei to APEC 2016, James Soong[/caption]

Tsai’s election of a candidate with a strong pro-unification stance is a show of good faith from a president whose Democratic Progressive Party is viewed in Beijing as a major challenge to the existing status quo.

Pulled in two directions by an ever growing domestic desire for recognition and an intense pressure from its powerful neighbour, Taiwan must tread carefully. The Little Tiger of East Asia must exploit the abnormality of its peculiar political position, even if that means working under an unfamiliar banner to achieve its diplomatic objectives.