Fri, Sep 22, 2006 - Page 8 News List

How to rule by reading the daily newspapers

By Huang Tien-lin 黃天鱗

"Everything can become a weapon." This is the essence of the concept of unlimited war. Consequently, economic warfare has become a link in China's unlimited war. It has also been the Chinese Communist Party (CCP) regime's most successful weapon, in particular against Taiwan.

With economic advantages consisting of a huge market and cheap labor, China has praised the internationalization and liberalization of the US and Europe and attracted about NT$10 trillion (US$300 billion) in productive capital from Taiwan, along with connected technologies, markets and manpower.

However, China's economic warfare against Taiwan over the past dozen years has not been plain sailing. Both Taiwan's "no haste, be patient" policy of 1996 and the battle over eight-inch wafer foundries in 2002 frustrated China's ongoing attempt to annex Taiwan through economic means. The Cabinet's Conference on Sustaining Taiwan's Economic Development in July -- dominated by those favoring investment in China -- also failed after being strongly opposed by pro-independence forces.

Beijing will not give up. The proposal to lift the 40 percent ceiling on Taiwanese companies investing in China was an important part of China's plan to dry up Taiwanese capital. When the proposal was blocked, China's unlimited war turned to attempting to push Taipei into disregarding the consensus reached at the conference and implement the proposal. Its first task is to weaken the legitimacy of the pro-independence forces' efforts at the conference by attacking their credibility.

Beijing's first target was foreign businesses in Taiwan. Six days after the conference, former American Institute in Taiwan director Douglas Paal condemned Taipei's "isolationist policies" during a speech in the US. He said that eliminating restrictions on cross-strait trade and transportation were a condition for a Taiwan-US Free Trade Agreement; this opened an attack on the 40 percent investment limit. We all understand that businesspeople have interests to uphold, so it's not very strange that foreign businesspeople think like Taiwanese businesspeople.

On Sept. 4, newspapers published the American Chamber of Commerce in Taipei's critique of former president Lee Teng-hui (李登輝) and the Taiwan Solidarity Union (TSU) for blocking the removal of the ceiling.

Two days later, the Commercial Times ran a front page story on the Wantwant Group's drastic reduction in Taiwanese investment, reporting that the group's Taiwanese headquarters would switch roles with its Chinese branch to embrace the Chinese market. It also attacked the decision on the investment ceiling.

The next day, pro-China media ran extensive reports warning the government that many Taiwanese companies had investigated the possibility of delisting from Taiwan's stock exchange next year in order to be listed in China.

The conclusion was that if the 40 percent ceiling is not lifted, Taiwan's stock market would continue to decline and the economy would become marginalized.

Meanwhile, one media outlet conducted a survey on investment by Taiwanese operating in China. It showed that only 1.97 percent of respondents were willing to return to Taiwan. This was linked to the 40 percent ceiling -- the reason for expanding Taiwanese investments in China. It is evident that these attacks were planned, well organized, and intensive.

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