Thu, Oct 18, 2012 - Page 8 News List

The Liberty Times Editorial: Beware China’s economic invasion

Ever since he started his second term, President Ma Ying-jeou (馬英九) has been even more conspicuously pro-China. During his Double Ten National Day address on Wednesday last week he spoke of relaxing obstacles to foreign investment, saying that in the future, deregulation would be the default, and restrictions the exception. When Ma speaks of foreign investment, what he actually means is investment from China. Given the parlous state of Taiwan’s economy at the moment, if Chinese investment is allowed to come flooding in, it will only increase China’s hold on Taiwan’s economy, and thereby increase Beijing’s influence on Taiwanese society. Essentially, this will turn Taiwan into another Hong Kong.

Despite the apparent improvement in relations between China and Taiwan in recent years, their essential nature has not changed, as China continues to view Taiwan as a renegade province. Since the end of World War II, it has not been possible for China to achieve its goal of annexing Taiwan through military action. However, the massive global economic tectonic shifts in the final two decades of the past century have given China the opportunity to control Taiwan through economic means. In that time, Taiwanese businesses have become less competitive, necessitating a mass exodus to China.

This not only helped China’s economic growth, it also had a hollowing-out effect on Taiwan’s domestic industrial base, making Taiwan increasingly dependent on China. In 2006, the Chinese economist Hu Angang (胡鞍鋼) proposed that China could bring Taiwan to its knees within seven days if it instigated a trade war, likening Taiwan to a person with diabetes, dependent on economic insulin that only China can provide. Clearly, China is already thinking in terms of trapping Taiwan through economic reliance.

The reason for the multitude of questions regarding Ma’s policies is that they are all contributing to the seriousness of this “economic diabetes,” and thereby hastening Taiwan’s downfall.

If one looks at what Ma has done since gaining office, he has consistently and unwaveringly followed a singular course in how he has run the country, and that is to increase reliance on China. During the global financial crisis, Ma touted China as Taiwan’s savior. He allowed Chinese tourists to come to Taiwan, which had no appreciable stimulus effect on the economy, but failed to make structural improvements to domestic industry or the investment environment, so that the economy idled. Taiwan is also the Asian country worst hit by the ongoing EU sovereign debt crisis.

However, Ma has clearly not looked into the mistakes and errors of his pro-China policies, and just keeps reiterating the need to attract Chinese investment. His answer is to allow Chinese investment in the manufacturing, service and construction industries. Of all of these, it is the deregulation of public construction that contains the greatest potential danger, but the Ma administration has allowed the deregulation of up to 51 percent of the industry.

It has recently been revealed that Chinese investors are interested in bidding for the A25 plot “Build, Operate, Transfer” project in Taipei’s Xinyi District (信義). There are concerns that allowing this public engineering project to fall into the hands of Chinese investors with a low bid of NT$20 billion (US$685 million) will mark the beginning of China’s control of Taiwan.

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