Sun, Jul 26, 2009 - Page 8 News List

Cross-strait rules that may harm the public

By Huang Di-ying 黃帝穎

After a consensus in the third meeting between Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤) and China’s Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林), the Ministry of Economic Affairs announced on June 30 that Chinese investment would be allowed in Taiwan.

This violates both the Constitution and the Act Governing Relations between the Peoples of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例) and could damage national security and infringe on the rights of Taiwanese.

First, President Ma Ying-jeou’s (馬英九) government enacted rules based on the Chiang-Chen agreement, but according to Constitutional Interpretation No. 329, an international agreement concluded between Taiwan and foreign countries or international organizations that involves “important issues of the Nation or rights and duties of the people” should be sent to the legislature for deliberation no matter what the agreement is called.

Calling the result of the cross-strait meeting a consensus, the government signed this agreement without divulging the implications for the rights and duties of the public. Taiwan’s government not only failed to ensure that the rules are transparent but also avoided legislative deliberation and implemented them by describing them as an administrative order. This is also a violation of the Constitution and the principles of democracy, legal reservation and the separation of powers enshrined within.

Second, according to Article 13 of the rules, representatives of Chinese companies who have Chinese nationality and who have been approved by the Taiwanese authorities may take up positions as directors or supervisors of Taiwanese companies.

However, according to Article 72 of the Act Governing Relations between the Peoples of the Taiwan Area and the Mainland Area, “Unless permitted by the competent authorities, no individual, juristic person, organization, or other institution of the Mainland Area may become a member of or hold a position in any juristic person, organization, or other institution of the Taiwan Area.”

Since permission is granted only on a case-by-case basis, the rules violate the intent of the parent law.

Third, Article 4 of the rules states that a Chinese company does not need to apply for government permission if its share stake in a Taiwanese company is less than 10 percent. In other words, if a Chinese firm wants to take control of a Taiwanese firm, the former only needs to purchase the latter’s shares through six subsidiaries, each with 9 percent of the shares. Then, without application or review, it can quietly gain control of the Taiwanese company. If this is the case, how will the government protect local companies and investors?

Fourth, the government has opened more than 190 areas to Chinese investment, including telecommunications, computer peripherals, medicine and medical equipment, ports, airports and other controversial sectors. These categories relate to privacy, health and even national security. The flow of Chinese capital into Taiwanese markets may also lead to technology outflow, stock market manipulation and hikes in housing prices. But does the government have any contingency plans?

I urge the government to act in accordance with the law, and hope that the legislature will be able to better monitor and respond to this situation for the sake of the rights and benefits of everyone.

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