A country’s infrastructure, from airports and road networks to telecommunications and public utilities, is often described as its arteries, essential for domestic development, global competitiveness and national security.
For this reason, many countries block any investment in infrastructure that could pose a threat to security. A couple of examples come to mind: India’s largest public telecoms firm, Bharat Sanchar Nigam Limited (BSNL), excluded China’s Zhong Xing Telecommunication Equipment Corp from bidding for a network project in 2006 on the grounds of potential security risk. In 2003, the US Department of Defense, also citing national security concerns, rejected Hong Kong tycoon Li Ka-shing’s (李嘉誠) bid to acquire Global Crossing’s fiber-optic network.
Neither the US nor India fear being annexed by China, yet they exercised caution because of the sensitivity of their infrastructure.
For Taiwan, China’s aggression is all too real. Nevertheless, the administration of President Ma Ying-jeou (馬英九) is considering allowing Chinese capital in highly sensitive sectors.
The 101 sectors that the government plans to open to Chinese investment would include key infrastructure such as the planned Taoyuan airport zone and ports.
The government also plans to open hotel maintenance, maintenance of aircraft including military accessories, and basic telecom services to cross-strait investment.
Meanwhile, the Chinese Nationalist Party (KMT) caucus is pushing for an amendment to the Act for Promotion of Private Participation in Infrastructure Projects (促進民間參與公共建設法) that would ease guidelines for build-operate-transfer (BOT) projects, paving the way for Chinese investment.
Experts at government agencies know better than the public the risks that placing control over infrastructure into hostile hands would carry. The government’s refusal to discuss these concerns is thus all the more disturbing.
Ma yesterday renewed his call for the US to sell F-16C/D fighter jets to Taiwan. Yet considering the sectors selected by the Ministry of Economic Affairs for Chinese investment, the US has good cause to be hesitant.
Opening some sectors could also have the effect of undermining domestic companies. The BOT model provides private domestic companies with business opportunities, but the government has failed to address concerns that Chinese investment could end up taking these profits out of the country.
The Ma administration has vowed to revive the nation’s stagnant economy. The public welcomes efforts to do so, but in the case of overhauling regulations with a potentially critical impact on national sovereignty, the government has a duty to examine the risks involved.
Allowing Chinese companies to construct and manage sensitive projects is reckless. Regardless of the opportunities that foreign direct investment represents, security risks should be assessed. When it comes to infrastructure, it is doubtful that the public would support gambling on the nation’s lifelines to chase profits.
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