An Olympic-sized flap over Taiwan's flag

Taiwan protested in London this week and cast an angry eye on political rival China after the sudden removal of Taiwan’s flag near the 2012 Olympics venues.

It’s an unusually harsh test of the often-marginalized island’s global profile that could strain relations with Beijing after four years of improvement.

The official Republic of China flag, which represents Taiwan, was removed from the Regent Street shopping district in London on July 24 and replaced a day later by an Olympic flag that links the island’s athletes to China. The island’s president, Ma Ying-jeou, ordered an investigation into why a Regent Street commercial association made the switch after four days of displaying the official flag along with 200 others from around the world. China may have asked that the original flag be taken down, media in Taipei say.

Taiwan-China ties have improved since 2008, when the two sides began to establish formal economic relations. But Taiwan lacks the faith in China to discuss sticky political issues, and the flag incident is unlikely to help the situation. 

“If this kind of incident happens two or three times, then it will impact relations,” says Kou Chien-wen, a political scientist at National Cheng Chi University in Taipei. “I would definitely go and talk to the mainland [China] about this matter. But to fly that flag is something the Chinese government can’t tolerate.”

Similar incidents have occurred in the past: Taipei often thunders when world sports or health organizations block its participation because of perceived pressure from Beijing.

Taiwan is ever egging the United Nations – where China has 170-plus allies, versus the 23 loyal to Taiwan – to allow it to officially participate in its civil aviation and climate change agencies.

World economic powerhouse China blocks self-ruled Taiwan from UN participation because it sees the island as part of its territory, a leftover dispute from the 1940s civil war that sent the losing Nationalist Party fleeing to the island to establish a rival government.

If Beijing waits too long for political talks with Taiwan, it may play tougher on adding to the economic, trade, and transit deals that have already pumped billions of US dollars from the world’s No. 2 economy into the much smaller, thirstier Taiwan, some analysts in Taipei say.

The two sides have already postponed the signing of investment protection deals that would smooth trade between the two sides twice since late 2011.

Taiwan’s foreign ministry says it will keep protesting the Regent Street Association and find another place in London to fly its official flag. It insinuates China is behind the flag replacement, but has stopped short of blaming it.

“The trend in Taiwan-mainland relations is one of warming, and our country’s policy is to meet opportunities and get results; but problems that accumulated over the past decades cannot be solved overnight,” the ministry said in a statement yesterday.

Still, the flag flap could fade instead of fanning flames. Both sides may prove eager to bury it as Taiwan benefits economically from the 16 post-2008 détente deals and China hopes that thaw will lead to a peaceful political unification.

“They already have a certain understanding, so this issue won’t change the structure of relations between the two sides, but it may have a big impact on people-to-people relations,” says Hsu Yung-ming, political scientist with Soochow University in Taipei.