Tue, Nov 10, 2015 - Page 8 News List

The Liberty Times Editorial: Annexation through the free market

Taiwan’s main political parties and lawmakers are jockeying for position as they anticipate a change of power next year. The Chinese Nationalist Party (KMT) government is preparing for an early graduation and acting as caretaker over the nation.

While all of this is going on, there is a vital issue for Taiwan’s survival that needs to be addressed: What if one day Taiwan’s core industries are all bought up by China? Would Taiwan still be able to maintain its democracy and freedom?

A few unusual events have recently taken place, each hot on the heels of the other. Taken together, they constitute a serious phenomenon that can no longer be ignored.

The first occurred at the end of last month, when Zhao Weiguo (趙偉國), chairman of China’s flagship semiconductor company Tsinghua Unigroup, called on Beijing to put pressure on Taipei to open up its chip wafer industry, saying that otherwise, Taiwanese brands, Taiwan-manufactured wafers and even the products they are used in should be banned from entering the Chinese market.

The second event was when Tsinghua Unigroup, after failing to take over the US semiconductor company Micron Technology, invested in Powertech Technology — Taiwan’s largest and the world’s fifth-largest packaging and testing company — to the tune of 25 percent of its shares, making it the company’s largest shareholder.

The third event was when Tsinghua Unigroup released a statement saying that if Taiwan relaxed its regulations, it would be willing to discuss a merger with leading chipmaker Mediatek chief executive Tsai Ming-kai (蔡明介). Tsai immediately responded that he was open to deregulation and cooperation between the semiconductor industries across the Taiwan Strait.

Tsinghua Unigroup is a Chinese state-owned company. In recent years it has been making mergers all over the world. At the end of September it entered the US market by buying a 15 percent stake in data storage company Western Digital. It is now the largest shareholder in that company.

In a purely competitive business world, this sort of activity is normal, although when China is involved, nothing is ever pure and simple.

China’s constitution clearly states that Chinese citizens “may not infringe upon the interests of the state, of society or of the collective.” Tsinghua Unigroup is a state-owned enterprise, but its operators have openly demanded intervention by the state to force Taiwan into submission. Given this point alone, there is no need to discuss any other political or military conflicts of interest or contradictions.

Tsinghua Unigroup is just one of many state-owned companies across the Strait, but it is a perfect example of what Beijing is up to. China has used its access to ample capital backing to buy into Taiwan’s top listed companies. We surely need to start asking if we have any other options left if China buys up Taiwan’s main industries.

If we have any doubts, we need to think about some of these issues together, now, especially as the KMT does not seem to care and its government just wants to give up and surrender.

Look at the pithy critique of the KMT legislators accusing the government of messing about and passively waiting for the end of its term. It is not far off.

When Tsinghua Unigroup invested in Powertech, Minister of Science and Technology Shyu Jyuo-min (徐爵民) made a nonsensical pronouncement to the effect that Taiwan’s semiconductor industry must move forward with research and development of more competitive technology.

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