President Ma Ying-jeou (馬英九) managed to dupe voters into re-electing him in January, but his second term in office does not officially start until next month. Ma is using this period to push through a series of unpopular policies, including relaxing the import ban on beef containing traces of the feed additive ractopamine, implementing steep fuel and electricity price hikes, imposing new taxes, opening the gates wider to Chinese investment and proposing the notion that China and Taiwan are two areas of a single country. This barrage of policy shocks has thrown Taiwan into disarray. It looks as though Ma’s plan is to lay the blame for all these unpopular policies on his subordinates so that he can begin his second term with his reputation intact.
Let us focus on Ma’s China policy. Two months have passed since then-Chongqing vice mayor Wang Lijun (王立軍) briefly took refuge in the US consulate in Chengdu, in China’s Sichuan Province. Following that incident, then-Chongqing party boss Bo Xilai (薄熙來) was removed from his post, and later from the politburo, and most recently, his wife was arrested on suspicion of murder. In the wake of these events, all kinds of rumors have been circulating about power struggles among China’s top leaders. The main reason why such rumors abound is that in China, where everything is done behind closed doors, various factions have been releasing information that they think will benefit themselves and allowing these rumors to circulate.
While China’s top leaders are busy handling their internal struggles, the lower ranks are trying to trim their sails and steer by the wind so that they do not end up on the wrong side. Given this situation, China’s policies on Taiwan are largely on hold, with decisions being left until the dust has settled. As top Chinese Communist Party (CCP) officials in Beijing jostle for position in the run-up to the party’s 18th National Congress, which is scheduled for autumn, only minor adjustments can be expected in China’s Taiwan policies, lest they cause an upset in the leadership rankings. That would explain why China has not responded to the proposal for a cross-strait peace agreement that Ma made last year or the “one country, two areas” concept that his envoy to Beijing brought up more recently. China would prefer to observe what Ma says and does and gauge Taiwanese’s reactions.
Now that Bo has been removed from his government and party posts, Taiwanese businesspeople with investments in Chongqing are worried about whether his administration’s preferential policies will continue.
Although Bo’s successor has promised that these policies will continue, the worry is that Bo’s administration raised loans amounting to 500 billion yuan (US$79.28 billion) to cover extra spending intended to curry favor with the public and foreign investors, while Chongqing’s annual revenue is only about 100 billion yuan. In effect, the city is bankrupt. This news was revealed by Xinhua news agency journalist Zhou Fang (周方), who has been studying Bo’s -“Chongqing model” for a long time. Given the circumstances, it is questionable how long the policies initiated by Bo can continue. Ma and Bo definitely have something in common when it comes to this kind of governing style.
Since last year, about 30 Chinese-owned companies that, under strict US regulations, failed to make a profit on the US stock market have withdrawn from US stock listings and gone back to the more loosely regulated Chinese and Hong Kong stock markets.