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Editorial: Facing up to China's challenge

China has no intention of following game rules devised by nations fighting back their distaste for China to continue doing business there, that is, separating political issues from business interests. Recent events including the European Union's (EU) parroting of the "one China" principle at the China-EU Summit, China's blacklisting of Credit Suisse First Boston (CSFB), and the ban against Matsushita Communication Industrial Co in the Chinese mobile phone market indicate China is taking its "hostage-taking" diplomacy to a new height by taking foreign businesses hostage to accomplish its political ends.

Why must the EU reiterate its acceptance of the "one China" principle before the PRC Prime Minister Zhu Rongji (朱鎔基) gives his nod of approval to EU's unofficial trade office in Taiwan? The fact that the EU needs such approval is strange enough, not to mention that the EU's reiteration had no legal significance, as no EU member formally recognizes Taiwan anyway. China's reason for twisting the EU's arm this way is to demean Taiwan and, in the process, the EU as well.

What made the EU willing to read what is clearly a poorly written script by China? Certainly, China's promise during the summit that EU insurance firms will enjoy the same treatment as US firms in China, among other guarantees of bilateral business cooperation, was a strong influence in bending the will of the EU.

On the other hand, CSFB, the multinational investment bank, incurred the wrath of China for inviting Taiwan's finance minister Yen Ching-chang (顏慶章) to speak at a conference in Hong Kong, and co-sponsoring a European tour for Taiwan officials to promote the country's companies. For its imprudence, the CSFB was removed from the list of underwriters for a multibillion dollar stock offering planned by the China Unicom Group.

The sad thing is China's bully-boy tactics are working.

Two other US investment banks, Goldman Sachs and Merrill Lynch, have scrapped similar promotional tours for Taiwan in the US.

The list of casualties goes on. Japan's Matsushita Communication is temporarily banned from China's market because mobile phones manufactured by the company displayed the name "ROC (Republic of China)" in front of Taiwan's international code for dialling Taiwan phone numbers.

It is appalling to see China getting its way each time by choking foreign businesses. Without any doubt, China is adopting a new policy of taking foreign business interests hostage for its political agenda.Today, China's agenda is isolating Taiwan. Tomorrow, it may use the same tactic to accomplish other political ends.

It is important that other nations sit up and take notice of this, that they resist the tendency to think that China's actions are just a result of the intractable cross-strait dispute and no real concern or worry of theirs. For what has happened is that China, on the verge of entering an organization which set international rules for trade relationships between countries, has shown that it has no intention whatever of abiding by those rules. The message is clear: China will target your trade to achieve its political objectives and it simply has no intention of honoring its international commitments. As a result, China's entry into the WTO will be an enormous challenge for that organization. How is it going to enforce its will on a persistent scofflaw? Much has been made of the challenge China faces in living up to its WTO commitments, far too little has been said about what happens if it doesn't even try.
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