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.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.
Since the Russian invasion of Ukraine in February 2022, people have been asking if Taiwan is the next Ukraine. At a G7 meeting of national leaders in January, Japanese Prime Minister Fumio Kishida warned that Taiwan “could be the next Ukraine” if Chinese aggression is not checked. NATO Secretary-General Jens Stoltenberg has said that if Russia is not defeated, then “today, it’s Ukraine, tomorrow it can be Taiwan.” China does not like this rhetoric. Its diplomats ask people to stop saying “Ukraine today, Taiwan tomorrow.” However, the rhetoric and stated ambition of Chinese President Xi Jinping (習近平) on Taiwan shows strong parallels with