China recently introduced 31 incentives aimed at attracting Taiwanese. Fourteen of these are nothing but old wine in new bottles, but the other 17 are quite new.
Beijing has two reasons for this major move.
First, the incentives are an extension of the two policies aimed at residents in central and southern Taiwan, middle and low-income families, small and medium-sized enterprises, and young people (the “three middles and the youth” policy, 三中一青), as well as the young generation and the grassroots level (the “one generation and one stratum” policy, 一代一線). They are aimed at attracting the younger generation who support Taiwanese independence, because that is all they have ever known, and turning them into a pro-unification vanguard.
Second, the incentives are designed to draw a second wave of investment from Taiwan.
Between 1990 and 2016, China’s attempt to attract Taiwanese focused on businesspeople and capital investment. It succeeded in drawing in capital worth about US$900 billion, along with new technologies, making China the largest trading country and the second-largest economy in the world.
However, after Chinese President Xi Jinping (習近平) began to reveal his despotic ambitions, most attempts by Chinese companies to acquire foreign businesses or to bring high-end technologies into China have been prohibited by other countries.
Most recently, Singapore-based Broadcom’s attempt to acquire smartphone chipmaker Qualcomm was blocked by US President Donald Trump, because of Broadcom’s close relations with China.
Under these circumstances, the only way China would be able to achieve its goal of becoming a technology giant by 2025 would be to recruit high-tech talent from Taiwan and encourage Taiwanese students and researchers to share trade secrets.
Taiwan would then become key to the outcome of the US-China power struggle and their economic war.
The Taiwanese government must therefore make responding to China’s 31 incentives a priority and stand firmly with the West to secure an economic advantage.
I have previously argued (“Taiwan in need of US-like security clearances,” March 21, page 8) that the government should raise the national security level by establishing a security clearance system similar to that in the US as soon as possible.
Anyone who has worked, studied or conducted research or business in China should have to undergo a rigorous security clearance review if they return to work in a government institution or sensitive high-tech company.
This would not constitute an infringement on personal freedom. Rather, a review should be regarded as an expression of loyalty to the nation.
By setting up a proper national security clearance system, the government could avoid being accused of “punishing people without first instructing them,” as Confucius said, and the public would also learn the importance of national identity.
If the US can do it, there is no reason Taiwan should not be able to.
Such a system should be the first line of defense against China’s 31 incentives. If such a security clearance system was already in place, the controversy over the National Taiwan University presidential election would have been resolved long ago.
The second line of defense should be the eight strategies for strengthening Taiwan proposed by the Executive Yuan on March 16.
This would be the second line of defense, and not the first, because the eight strategies would be reactive rather than proactive.
To make up for this shortcoming, the government should consider restoring the stock bonus mechanism, which levied taxes on the face value of shares. This would be far more effective than the implementation of sporadic bonus policies. As long as it resulted in the creation of a few unicorn companies, it would result in increased tax revenue.
The third line of defense would be an exercise of state power: amending the Trade Secrets Act (營業秘密法) and having the different ministries impose prohibitive measures, such as the Ministry of Education’s plan to bar Taiwanese academics with crucial expertise from participating in Chinese state-funded research programs.
It is important to understand that Taiwan is facing an economic war waged by a country ruled by authoritarian nationalism and which has an economy that is 20 to 30 times bigger than Taiwan’s. The ultimate goal of this country is to annex Taiwan.
This is a war far removed from issues of liberalization and internationalization, and without a leader with a vision of national sovereignty, Taiwan will not succeed.
Huang Tien-lin is a national policy adviser and former managing director and chairman of First Commercial Bank.
Translated by Chang Ho-ming
In the first year of his second term, US President Donald Trump continued to shake the foundations of the liberal international order to realize his “America first” policy. However, amid an atmosphere of uncertainty and unpredictability, the Trump administration brought some clarity to its policy toward Taiwan. As expected, bilateral trade emerged as a major priority for the new Trump administration. To secure a favorable trade deal with Taiwan, it adopted a two-pronged strategy: First, Trump accused Taiwan of “stealing” chip business from the US, indicating that if Taipei did not address Washington’s concerns in this strategic sector, it could revisit its Taiwan
The stocks of rare earth companies soared on Monday following news that the Trump administration had taken a 10 percent stake in Oklahoma mining and magnet company USA Rare Earth Inc. Such is the visible benefit enjoyed by the growing number of firms that count Uncle Sam as a shareholder. Yet recent events surrounding perhaps what is the most well-known state-picked champion, Intel Corp, exposed a major unseen cost of the federal government’s unprecedented intervention in private business: the distortion of capital markets that have underpinned US growth and innovation since its founding. Prior to Intel’s Jan. 22 call with analysts
The Chinese Communist Party (CCP) challenges and ignores the international rules-based order by violating Taiwanese airspace using a high-flying drone: This incident is a multi-layered challenge, including a lawfare challenge against the First Island Chain, the US, and the world. The People’s Liberation Army (PLA) defines lawfare as “controlling the enemy through the law or using the law to constrain the enemy.” Chen Yu-cheng (陳育正), an associate professor at the Graduate Institute of China Military Affairs Studies, at Taiwan’s Fu Hsing Kang College (National Defense University), argues the PLA uses lawfare to create a precedent and a new de facto legal
Chile has elected a new government that has the opportunity to take a fresh look at some key aspects of foreign economic policy, mainly a greater focus on Asia, including Taiwan. Still, in the great scheme of things, Chile is a small nation in Latin America, compared with giants such as Brazil and Mexico, or other major markets such as Colombia and Argentina. So why should Taiwan pay much attention to the new administration? Because the victory of Chilean president-elect Jose Antonio Kast, a right-of-center politician, can be seen as confirming that the continent is undergoing one of its periodic political shifts,
RSS