Fri, Nov 09, 2001 - Page 12 News List

Editorial: `Effective management' needed now

Taiwan's government has officially relaxed its "no haste, be patient" (戒急用忍) policy on cross-strait investment. In place is a new and improved policy of "active opening, effective management (積極開放, 有效管理). At least under the old policy, everyone knew the government's position on cross-strait investment, which was basically to take things slow in order not to harm the economy and national security. What the new policy stands for remains hazy.

Those hoping for a complete liberalization of cross-strait investment are focusing on the "active opening" part, while those hoping for the opposite emphasize "effective management." What Taiwan needs is to strike a balance between the two components by implementing "effective management" measures to avoid becoming overly dependent on China, with a resulting threat to national sovereignty. How to achieve such a balance is the question.

The "active opening" segment is the easy part. It was amply demonstrated by the Executive Yuan's announcement on Wednesday of the elimination of the US$50 million cap on investments in China. Other new measures include increasing the size of investments in China that require prior government approval from US$3 million to US$20 million and allowing direct capital transfers under certain circumstances.

In contrast, implementing "effective management" will be a challenge. Any engineer knows that a waterway must be constructed to channel water to where it is needed before the gate of a reservoir is opened if one is to avoid flooding. Unfortunately, so far no measures have been announced that would provide this much-needed substantive management.

For example, the government bans China-bound investment in some 340 or so products (out of the more than 7,000 types of products which Taiwan manufactures) -- yet Minister of Economic Affairs Lin Hsin-yi (林信義) has indicated that the ban on "hundreds" of types of products will be lifted. The actual decision on what will be exempted has been left up to, of course, a committee.

It is of the utmost importance that the government shows its determination to implement truly "effective" management by making sure that the technology-intensive and infrastructure-related industries stay in Taiwan. Industries that are less capital- and technology-intensive -- those that thrive on cheap labor -- should be allowed to invest in China as a way of ensuring a genuine division of labor across the Strait.

The government needs to give up any idea of trying to find the common denominator among political parties and groups as it implements the new policy. It will never be able to please everyone. In particular, those in the pro-unification groups will never be happy until Taiwan is taken over by China. For example, People First Party Chairman James Soong (宋楚瑜) was quick to slam the government's new measures as not going far enough.

Therefore, President Chen Shui-bian (陳水扁) needs to ensure that "effective management" is implemented so that incremental openings are tailored to meet the needs of Taiwan's business and national security interests, not China's. He needs to do what is good for the country, rather than what he thinks will please others. A balanced policy on cross-strait investment will also be consistent with the "middle way" platform he presented during the presidential election.

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