Sun, Jan 17, 2010 - Page 8 News List

THE LIBERTY TIMES EDITORIAL: Wickedness in the guise of policy

On Friday, the New York Times carried a report filed in Shanghai that quoted American hedge fund manager James Chanos’ assessment of China’s economy as being like “Dubai times 1,000 — or worse.”

Chanos argues that the vast amounts of funds poured in by the Chinese government to deal with the financial crisis have led to excessively inflated credit, and that this in turn has created a real estate bubble and encouraged production of a mountain of goods that cannot be sold. This bubble economy is bound to burst sooner or later, he said.

Chanos also accuses the Chinese authorities of faking their figures, including their claim to have maintained a GDP growth rate of 8 percent last year.

Chanos’ views reflect the opinion of a growing number of experts worldwide that China’s economic stimulus program is creating an economic bubble.

It is worth noting that Chanos is well known in financial circles for having spotted accounting irregularities at Enron that gave a false impression of its corporate health. Now he has turned to investigating the flashy but hard-to-substantiate economic figures that China has been presenting to the world for several years.

Economic ups and downs and tampering with statistical data are commonplace in China. While China is a one-party state under the Chinese Communist Party, its system is in reality one of crony capitalism, in which only a minority economic elite has become rich.

The most that can be said for “rising China” is that the country has become richer, but the people remain poor.

The heavy prison sentence imposed two weeks ago on dissident Liu Xiaobo (劉曉波) highlights the fact that political repression allows no peaceful resolution of internal contradictions. China’s economy, society and culture all have the potential to disintegrate and collapse.

In relying on such a country for economic revival and future development, Taiwan’s government is putting all its eggs in the wrong basket, to say the least. Its policies threaten to render Taiwan vulnerable to exploitation and this is why the public does not — and should not — support Ma’s China policies.

The government should not just encourage Taiwanese to invest in Taiwan; it should also improve the investment environment to attract more foreign funds because investment is what brings jobs, higher incomes and economic growth.

The Ma administration calls for investment in Taiwan on the one hand, while on the other prompting capital-intensive high-tech companies and financial institutions to invest in China. It has welcomed group after group of provincial-level Chinese officials to visit Taiwan in the guise of purchasing missions, even if their real purpose is to look for investors.

In eagerly helping China to excavate Taiwan’s manufacturing and investment, the Ma administration betrays its pathological mentality of saying one thing while doing another.

The Taiwanese public cannot allow this wicked behavior to continue any longer.


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