A few days ago, Chinese government-backed company Tsinghua Unigroup Ltd — China’s largest chip designer — issued an announcement saying that the company planned to acquire stakes in large Taiwanese integrated circuit (IC) packing and testing firms. There were also reports that the company had been putting pressure on the government to open up the local IC design industry to Chinese investors.
The Ministry of Economic Affairs, which has all along promoted such deregulation and opening up, has said that it would scrutinize Tsinghua’s investment plan in close detail. However, because the Chinese government stands behind Tsinghua, other nations are submitting similar investment plans to even stricter reviews.
When it comes to industries of strategic value and national importance, a government has a great responsibility to provide adequate protection.
Consider the US. In July, Tsinghua Unigroup offered US$23 billion for Micron Technology, a big US manufacturer of DRAM chips, but the US government came up with several reasons to block the deal. The most important among the reasons offered was national security.
If even Washington blocks Tsinghua from investing in nationally important industries, why does Taipei think it can open the doors to such investment without consideration?
Based on national security concerns, many governments are placing restrictions on the investments and other commercial activities of foreign firms.
Here are just a few examples: In April 2003, the US government cited national security concerns as a reason to block Chinese investors from acquiring Global Crossing, a telecommunications company that provided worldwide computer networking services and was a tier 1 carrier. That same year, Hong Kong businessman Li Ka-shing’s (李嘉誠) Hutchison Port Holdings Trust wanted to invest in the development of a bulk terminal run by Jawaharlal Nehru Port Trust in Mumbai, only to have the investment rejected by the Indian government because the Cabinet Committee on Security said that the port was too close to India’s Southern Naval Command and that a facility operated by Chinese investors so close by would be a major national security concern.
One of the many ways that the US and India differ from Taiwan is that the two nations do not have to worry about being annexed by China. Despite that, their governments still want to prevent any negative eventualities that could arise in connection to Chinese investments.
The reason for such considerations is of course that they are concerned over China’s fundamental character as a dictatorship and that this could result in Chinese companies operating in ways that are different from how normal markets operate, such as investing in and running operations for political rather than commercial reasons.
The threat that China poses to Taiwan is much more direct than that, so of course there is absolutely no reason for the government to make light of allowing Chinese investors to acquire Taiwanese companies. Doing so would be tantamount to abandoning all pretense of protecting national security.
Huang Di-ying is an attorney and spokesperson for the Democratic Progressive Party.
Translated by Perry Svensson
In a summer of intense political maneuvering, Taiwanese, whose democratic vibrancy is a constant rebuke to Beijing’s authoritarianism, delivered a powerful verdict not on China, but on their own political leaders. Two high-profile recall campaigns, driven by the ruling party against its opposition, collapsed in failure. It was a clear signal that after months of bitter confrontation, the Taiwanese public is demanding a shift from perpetual campaign mode to the hard work of governing. For Washington and other world capitals, this is more than a distant political drama. The stability of Taiwan is vital, as it serves as a key player
Much like the first round on July 26, Saturday’s second wave of recall elections — this time targeting seven Chinese Nationalist Party (KMT) lawmakers — also failed. With all 31 KMT legislators who faced recall this summer secure in their posts, the mass recall campaign has come to an end. The outcome was unsurprising. Last month’s across-the-board defeats had already dealt a heavy blow to the morale of recall advocates and the ruling Democratic Progressive Party (DPP), while bolstering the confidence of the KMT and its ally the Taiwan People’s Party (TPP). It seemed a foregone conclusion that recalls would falter, as
The fallout from the mass recalls and the referendum on restarting the Ma-anshan Nuclear Power Plant continues to monopolize the news. The general consensus is that the Democratic Progressive Party (DPP) has been bloodied and found wanting, and is in need of reflection and a course correction if it is to avoid electoral defeat. The Chinese Nationalist Party (KMT) has not emerged unscathed, either, but has the opportunity of making a relatively clean break. That depends on who the party on Oct. 18 picks to replace outgoing KMT Chairman Eric Chu (朱立倫). What is certain is that, with the dust settling
Mainland Affairs Council Deputy Minister Shen You-chung (沈有忠) on Thursday last week urged democratic nations to boycott China’s military parade on Wednesday next week. The parade, a grand display of Beijing’s military hardware, is meant to commemorate the 80th anniversary of Japan’s surrender in World War II. While China has invited world leaders to attend, many have declined. A Kyodo News report on Sunday said that Japan has asked European and Asian leaders who have yet to respond to the invitation to refrain from attending. Tokyo is seeking to prevent Beijing from spreading its distorted interpretation of wartime history, the report
RSS