The first concern is that China has always had the ambition to annex Taiwan, so why allow Chinese investors to be involved in public construction projects? This is especially worrying since some of these projects are related to national security and Chinese investors may well get access to confidential information over the course of these projects, potentially leading to national security leaks.
Second, Taiwan’s current account surplus has stood at around the NT$1 trillion mark for the past five years, and there is a lot of privately owned money in the country. If there are good investment opportunities out there that would see the environment improved and a large growth in domestic private investment, what is the sense in allowing Chinese investors to bid?
Besides, restricting Chinese investment is by no means exclusive to Taiwan. China has attempted to make major acquisitions in Western countries over the past several years, almost all of which have met opposition in various countries on the grounds of national security, especially in the energy and high-tech industries. Chinese expansionism has always raised eyebrows in the outside world.
The recent US House of Representatives’ Permanent Select Committee Investigative Report on the US National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE cites concerns over the possibility of these companies facilitating cyberespionage on behalf of the Chinese intelligence services.
By contrast, some Taiwanese telecommunications providers have expressed an interest in purchasing Huawei equipment as it is relatively inexpensive. This total disregard for national security is worrying.
It must be said that Huawei and ZTE are hardly exceptions. The Chinese government has its hand in many Chinese companies. At this point, considerations of profit, loss and cost do not matter, because this is more about national policy objectives, and these objectives — and what Beijing hopes to achieve — cannot be measured in monetary terms.
Therefore, if Chinese investors are allowed to vie for construction projects in Taiwan, they can put in very low bids to win the tender and then contract out the work to Taiwanese companies, guaranteeing a certain profit margin. This would mean that investors and local contractors would have common interests, making it possible for investors to influence the contractor’s political behavior, for example by persuading them to support the pro-China candidate when national elections come around. Then, all of a sudden, China will have achieved its goal of exerting more influence over Taiwan.
China is not a democratic country, nor does it have a capitalist free market. Yet, it is very good at exploiting the weaknesses of democracy and the free market, and Taiwan is its primary target. It does not have to go all out, all it needs do is strengthen its influence on Taiwan, and money is no object. What’s more, Ma has opened the door by allowing Chinese investors in to bid on public construction projects.
How could China miss an opportunity as great as this? Once Chinese investors start pouring in and grabbing a piece of the action, they will have leverage over the Taiwanese companies involved in these projects. When this happens, it will not just be Taiwan’s economy that suffers: after that, its very democracy and sovereignty will be at risk.