Despite President Ma Ying-jeou’s (馬英九) campaign promises and the policies of his administration, which envision a big cake for everyone to share, the reality is very different. The government’s move to allow Chinese investment in Taiwan is a case in point. In the three months since deregulation, Taiwan has attracted just NT$189 million (US$5.87 million) in Chinese investment.
The government has tried to explain why there has been no rush to invest: Taiwan still has too many restrictions on Chinese capital and Chinese visitors; the global economic climate is not favorable; China is partly to blame. It is now nearly a year and a half since Ma’s Chinese Nationalist Party (KMT) regained control of the government, but its core policy — improving cross-strait economic and trade ties — has not produced many benefits.
The government also opened Taiwan to Chinese tourists, but even during the Golden Week holiday following China’s Oct. 1 National Day, only about 1,000 Chinese visitors arrived per day — far short of the predicted 3,000. Japanese and US tourist numbers are also down. As most Chinese tourists come here on low-cost tours and are not big spenders, they generate less revenue than the missing Japanese and Americans.
After all the hype, the opening to Chinese tourists and investment were anti-climactic. Now the government is preparing to sign a memorandum of understanding (MOU) on cross-strait financial supervision and an economic cooperation framework agreement (ECFA) with China. Taiwanese businesspeople are uncertain about the promised benefits of these agreements, while the working class fears they may exacerbate unemployment.
The MOU will allow Chinese banks to open branches in Taiwan. The problem is that China has no private banks — they are all state run. Their branches in Taiwan can therefore be expected to serve a political purpose. If they offer higher interest rates than local banks, they will attract the majority of deposits and can then lend this money to Chinese-invested businesses in Taiwan, allowing them to buy up key resources and take control of the economy.
While the planned MOU is limited to finance, an ECFA would go farther. The Ma administration wants to use an ECFA to connect with ASEAN and avoid marginalization, but this is just wishful thinking. Other ASEAN members may not want Taiwan in their club, and China has not promised to allow Taiwan in.
An ECFA will also make it easier for businesses to move from Taiwan to China, which means less jobs in Taiwan. Taiwan’s market will be open to Chinese agricultural and industrial products and services and China’s low labor costs will make it impossible for Taiwanese firms to compete. The government has promised that imports of Chinese farm produce will be limited and Chinese workers barred, but these measures go against the free-trade spirit of the WTO and an ECFA, casting doubt on their viability. The benefits of an ECFA are far from clear, while the negatives are obvious. It is only natural that Taiwanese workers and some entrepreneurs, especially those in the traditional manufacturing sector, would be anxious.
As the Chinese Communist Party (CCP) and its People’s Liberation Army (PLA) reach the point of confidence that they can start and win a war to destroy the democratic culture on Taiwan, any future decision to do so may likely be directly affected by the CCP’s ability to promote wars on the Korean Peninsula, in Europe, or, as most recently, on the Indian subcontinent. It stands to reason that the Trump Administration’s success early on May 10 to convince India and Pakistan to deescalate their four-day conventional military conflict, assessed to be close to a nuclear weapons exchange, also served to
The recent aerial clash between Pakistan and India offers a glimpse of how China is narrowing the gap in military airpower with the US. It is a warning not just for Washington, but for Taipei, too. Claims from both sides remain contested, but a broader picture is emerging among experts who track China’s air force and fighter jet development: Beijing’s defense systems are growing increasingly credible. Pakistan said its deployment of Chinese-manufactured J-10C fighters downed multiple Indian aircraft, although New Delhi denies this. There are caveats: Even if Islamabad’s claims are accurate, Beijing’s equipment does not offer a direct comparison
After India’s punitive precision strikes targeting what New Delhi called nine terrorist sites inside Pakistan, reactions poured in from governments around the world. The Ministry of Foreign Affairs (MOFA) issued a statement on May 10, opposing terrorism and expressing concern about the growing tensions between India and Pakistan. The statement noticeably expressed support for the Indian government’s right to maintain its national security and act against terrorists. The ministry said that it “works closely with democratic partners worldwide in staunch opposition to international terrorism” and expressed “firm support for all legitimate and necessary actions taken by the government of India
Taiwan aims to elevate its strategic position in supply chains by becoming an artificial intelligence (AI) hub for Nvidia Corp, providing everything from advanced chips and components to servers, in an attempt to edge out its closest rival in the region, South Korea. Taiwan’s importance in the AI ecosystem was clearly reflected in three major announcements Nvidia made during this year’s Computex trade show in Taipei. First, the US company’s number of partners in Taiwan would surge to 122 this year, from 34 last year, according to a slide shown during CEO Jensen Huang’s (黃仁勳) keynote speech on Monday last week.
RSS