President Chen Shui-bian (
On cross-strait economic exchanges, he changed the principle of "active opening, effective management" to "active management, effective opening."
Whether Chen was playing word games or signaling a substantive shift has become a focus of public debate. Given that Chen has talked much but done little in the past, it is not surprising that people regard this "shift" with some skepticism.
On the day after the speech, Premier Frank Hsieh (
These include visits by Chinese tourists to Taiwan, opening Taiwan to more foreign investment, adopting a clearing mechanism for exchanging the New Taiwan dollar and the yuan, investing in China and other matters. This was the result of the Cabinet learning from experience, when policies were rushed through and with ineffective communication between government bodies. It also indicated a step forward for the government in its collective ability to make policy.
In light of present cross-strait economic exchanges, use of the words "loosen" and "tighten" is surely inadequate. Instead, the government must come up with a more practical plan.
The "active opening, effective management" approach was doomed to fail, because it lacked a serious mechanism to back it up. As a result the "opening" to China took place willy-nilly. That hurt the economy by leading to overdependence, releasing capital flow to China but retaining debt as skilled labor flocked across the Strait. It also failed to protect the safety and interests of Taiwanese businesspeople in China.
China's economic development has entered a high-risk phase. Black holes and real-estate bubbles can happen anytime. State banks are aware of this, and thus their urgency in selling stocks to foreign investors to distribute risk. The Investment Commission under Taiwan's Ministry of Economic Affairs published figures showing that Taiwanese capital in China declined 8.73 percent in November, indicating a cooling of the "China fever."
Also, according to the most recent figures published by China's Ministry of Commerce, every month since last April -- with the exception of September -- foreign capital in China has declined. In each month during the second quarter, the decline reached as much as 10 percent, a level rarely seen in recent years. The statistics serve as a warning, and anyone in Taiwan who blindly advocates investing in China clearly has a secret agenda.
Since China refuses to have any official contact with Taiwan, it is difficult for the government to protect the rights of investors, increasing the risks for government, businesspeople and shareholders. As for China-based Taiwanese companies listing on the stock market here, the lack of government regulation means that this course of action is highly risky and may only be feasible after thorough consideration.
One example of what can go wrong is the Hong Kong investors who were duped by fake shares on the Chinese stock market, despite the close relationship between the territory and the rest of China. Surely Taiwanese policymakers aren't blind to this.
Chen and Hsieh's words are a good start. Taiwan's authorities should follow up with strong measures to "actively manage" China-bound investment.
Paul Lin is a New York-based political commentator.
TRANSLATED BY LIN YA-TI
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
Former president Ma Ying-jeou’s (馬英九) trip to China provides a pertinent reminder of why Taiwanese protested so vociferously against attempts to force through the cross-strait service trade agreement in 2014 and why, since Ma’s presidential election win in 2012, they have not voted in another Chinese Nationalist Party (KMT) candidate. While the nation narrowly avoided tragedy — the treaty would have put Taiwan on the path toward the demobilization of its democracy, which Courtney Donovan Smith wrote about in the Taipei Times in “With the Sunflower movement Taiwan dodged a bullet” — Ma’s political swansong in China, which included fawning dithyrambs