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.
In the first year of his second term, US President Donald Trump continued to shake the foundations of the liberal international order to realize his “America first” policy. However, amid an atmosphere of uncertainty and unpredictability, the Trump administration brought some clarity to its policy toward Taiwan. As expected, bilateral trade emerged as a major priority for the new Trump administration. To secure a favorable trade deal with Taiwan, it adopted a two-pronged strategy: First, Trump accused Taiwan of “stealing” chip business from the US, indicating that if Taipei did not address Washington’s concerns in this strategic sector, it could revisit its Taiwan
The stocks of rare earth companies soared on Monday following news that the Trump administration had taken a 10 percent stake in Oklahoma mining and magnet company USA Rare Earth Inc. Such is the visible benefit enjoyed by the growing number of firms that count Uncle Sam as a shareholder. Yet recent events surrounding perhaps what is the most well-known state-picked champion, Intel Corp, exposed a major unseen cost of the federal government’s unprecedented intervention in private business: the distortion of capital markets that have underpinned US growth and innovation since its founding. Prior to Intel’s Jan. 22 call with analysts
The Chinese Communist Party (CCP) challenges and ignores the international rules-based order by violating Taiwanese airspace using a high-flying drone: This incident is a multi-layered challenge, including a lawfare challenge against the First Island Chain, the US, and the world. The People’s Liberation Army (PLA) defines lawfare as “controlling the enemy through the law or using the law to constrain the enemy.” Chen Yu-cheng (陳育正), an associate professor at the Graduate Institute of China Military Affairs Studies, at Taiwan’s Fu Hsing Kang College (National Defense University), argues the PLA uses lawfare to create a precedent and a new de facto legal
Chile has elected a new government that has the opportunity to take a fresh look at some key aspects of foreign economic policy, mainly a greater focus on Asia, including Taiwan. Still, in the great scheme of things, Chile is a small nation in Latin America, compared with giants such as Brazil and Mexico, or other major markets such as Colombia and Argentina. So why should Taiwan pay much attention to the new administration? Because the victory of Chilean president-elect Jose Antonio Kast, a right-of-center politician, can be seen as confirming that the continent is undergoing one of its periodic political shifts,
RSS