There is an ongoing debate on whether Democratic Progressive Party (DPP) presidential candidate Frank Hsieh (
But a whole myth surrounds that debate.
The pan-blue camp is using this myth to attack the DPP government's "isolationist" policies in an attempt to push its consistent stance that Taiwan's future lies in China. In doing so, however, they disregard the fact that the capital invested in China accounts for more than 60 percent of Taiwan's total investment abroad.
Official statistics released by the government last year put the figure at 63.9 percent. In addition, Taiwan's exports to China made up 38.6 percent of the nation's exports last year. With such figures, how can there even be talk of isolationist policies? The pan-blue camp is simply using this issue to mobilize political support.
The pan-green camp has also taken advantage of this myth. If we look at the history of Taiwanese investment overseas, we are reminded that the government used to encourage companies and individuals to make indirect investments in China via a third country -- known as the "track two" option -- so that their investments would enjoy economic and trade protection enjoyed by other countries.
Today, although the government has begun, to a certain degree, to open the gates to direct investment in China -- the "track one" option -- many businesses still prefer "track two" because of its financial management and tax advantages. For companies with large projects requiring heavy investment or with a high profile, "track two" is not an option.
As a result, even though the pan-green camp keeps clinging to the "track one" option, domestic capital continues to flow to China via "track two" channels.
From a macroeconomic perspective, the fact that the "track one" option cannot prevent the outflow of capital indicates that the government's capital control capabilities have been eroded by the fast capital movements of globalization. From a public policy perspective, the government should examine the effectiveness of this policy tool.
In this light, Hsieh's proposal to adjust the "track one" mechanism has helped allay the pan-green camp's anxiety over capital outflows and resolve the "myth."
A closer look shows that its cleverness lies in the dynamic management of investment projects on a case-by-case basis, by which a committee or a small team will be formed to examine and decide on individual investment projects in China.
In other words, this mechanism would achieve both the goals of "active management" and "effective opening."
Still, some parts of Hsieh's proposal require clarifications.
How does his proposed committee, or small team, differ from the Ministry of Economic Affairs' Investment Commission and how should their functions be separated?
To deconstruct the legacy of authoritarian rule under the Chinese Nationalist Party (KMT), the DPP has followed up on the transition of political power by introducing elements of democratization outside the existing policy-making mechanism and established various commissions, such as the Environmental Protection Administration's environmental evaluation committee and other deliberative committees.
But these have resulted in violations of the democratic principle of balance between power and responsibility.
Lu Chun-wei is a doctoral student in the Department of Political Science at National Taiwan University.
Translated by Ted Yang
Jan. 1 marks a decade since China repealed its one-child policy. Just 10 days before, Peng Peiyun (彭珮雲), who long oversaw the often-brutal enforcement of China’s family-planning rules, died at the age of 96, having never been held accountable for her actions. Obituaries praised Peng for being “reform-minded,” even though, in practice, she only perpetuated an utterly inhumane policy, whose consequences have barely begun to materialize. It was Vice Premier Chen Muhua (陳慕華) who first proposed the one-child policy in 1979, with the endorsement of China’s then-top leaders, Chen Yun (陳雲) and Deng Xiaoping (鄧小平), as a means of avoiding the
The immediate response in Taiwan to the extraction of Venezuelan President Nicolas Maduro by the US over the weekend was to say that it was an example of violence by a major power against a smaller nation and that, as such, it gave Chinese President Xi Jinping (習近平) carte blanche to invade Taiwan. That assessment is vastly oversimplistic and, on more sober reflection, likely incorrect. Generally speaking, there are three basic interpretations from commentators in Taiwan. The first is that the US is no longer interested in what is happening beyond its own backyard, and no longer preoccupied with regions in other
A recent piece of international news has drawn surprisingly little attention, yet it deserves far closer scrutiny. German industrial heavyweight Siemens Mobility has reportedly outmaneuvered long-entrenched Chinese competitors in Southeast Asian infrastructure to secure a strategic partnership with Vietnam’s largest private conglomerate, Vingroup. The agreement positions Siemens to participate in the construction of a high-speed rail link between Hanoi and Ha Long Bay. German media were blunt in their assessment: This was not merely a commercial win, but has symbolic significance in “reshaping geopolitical influence.” At first glance, this might look like a routine outcome of corporate bidding. However, placed in
The last foreign delegation Nicolas Maduro met before he went to bed Friday night (January 2) was led by China’s top Latin America diplomat. “I had a pleasant meeting with Qiu Xiaoqi (邱小琪), Special Envoy of President Xi Jinping (習近平),” Venezuela’s soon-to-be ex-president tweeted on Telegram, “and we reaffirmed our commitment to the strategic relationship that is progressing and strengthening in various areas for building a multipolar world of development and peace.” Judging by how minutely the Central Intelligence Agency was monitoring Maduro’s every move on Friday, President Trump himself was certainly aware of Maduro’s felicitations to his Chinese guest. Just
RSS