Now that the local government elections are over, it is time to turn our attention to the cross-strait trade situation.
If the soon to be convened Economic Development Advisory Conference decides to further relax government policy on cross-strait trade, this is likely to lead to a massive outflow of money from Taiwan and increase the risk of Beijing using commercial means to force Taiwan into accepting "one country, two systems."
In the US, people have been calling for a reassessment of the trade relationship with China as Beijing's unconventional trade practices have hurt the US economy. This year, the US's trade deficit with China will reach a record high of US$200 billion.
The respected business consultant Ethan Gutmann in his book Losing the New China has a number of important observations which are helpful responses to these problems.
Gutmann worked in China for many years and was involved in television production, and also served as a business consultant. He rapidly made his way into the expatriate community of US entrepreneurs in China and was even deputy chairman of the government liaison committee of the American Chamber of Commerce. As a result, he obtained a deep insight into the operation of foreign businesses in China and the corruption within the country. This information is known to many China experts and businesspeople, but they remain silent to avoid offending their hosts. Gutmann is unusual in that he has had the courage to write a truthful account, and his four conclusions are worth repeating:
First, most US companies in China have not made money. Gutmann says that under a third would be able to show quarterly profits, and if you factor in their initial investment, perhaps only 5 percent have really turned a profit.
Second, Gutmann says the China market is a black hole into which money sinks without trace. This is because it is not a normal society, but rather a place where lying officials, a rigid and harsh bureaucracy and rampant piracy rule.
Third, Gutmann said that if foreign companies want to succeed in China, they must adopt one of three measures. One is to be led by the Chinese Communist Party, in the manner of Laurence Brahm, who owes his success to toeing the party line in innumerable articles that read as though they were from the People's Daily. Another is through bribery of high officials and the third is flattery. An example of this is the behavior of Cisco Systems, who provided China with firewall technologies to control the Internet, even going so far as to sell this technology at half the price. Another example is Yahoo, whose search engine in China will reject terms such as "Taiwan independence," and "Falun Gong."
Fourth, Gutmann claims that many US companies in China falsify their accounts to their parent companies to show a profit. They organize vanity trips in which US executives can hobnob with high-level Chinese officials.
Gutmann describes the debauchery that is commonplace among the foreign business community, including sexual orgies and drug taking. He says that China offers three sources of attraction: economic, cultural and sexual, suggesting that local woman fall over themselves to fulfill the sexual demands of well-heeled foreign executives. In today's China, where sexual liberation has joined hands with economic reform, most young people have thrown themselves into the reform movement. Unfortunately, this reformist zeal mostly takes place below the waist.
Gutmann's book is clearly something that Taiwanese policy makers and businesspeople can read with profit.
Cao Changqing is a writer based in New York.
Translated by Ian Bartholomew
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.