Equally, if not more, disturbing was news that the Taiwanese government-owned Aerospace Industrial Development Corporation, which, among other things, designed the Ching Kuo Indigenous Defense Fighter, is proposing a joint venture with the Commercial Aircraft Co of China (COMAC) to co-assemble commercial airplanes.
COMAC shareholders include the Chinese central government and the municipal government of Shanghai. The chairman of the board, Zhang Qingwei (張慶偉), is chairman of the Commission of Science, Technology and Industry for National Defense of the People’s Republic of China.
These two examples involve transparent attempts by Chinese state-owned companies to invest in Taiwan. In light of signs that Beijing is walking away from market reform and strengthening its grip on the private sector, future investment in Taiwanese companies could be made by Chinese firms that on paper seem to be private but that in reality are very much under state control.
As Chinese investment intensifies (a 12 percent stake in Far EasTone, for example, could just be an opening gambit) and expands into a greater number of sectors, the potential for technology transfer, espionage and compromised security will only increase.
To ensure national security, Taiwanese will have to be vigilant, even when a prospective Chinese investor is ostensibly a private company. With Chinese state banks dominating the lending market and the CCP spreading its tentacles in various sectors in the domestic economy, it will be essential to determine where the money comes from and who’s in charge.
Let’s not be taken in: China has not embraced market capitalism to the extent of compromising its political agenda.
J. Michael Cole is a writer based in Taipei.
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