In its latest example of economic bullying, China on Friday barred Credit Suisse First Boston (CSFB), one of the world's largest securities firms, from doing business there in retaliation for its handling of overseas investment trips for two Taiwanese groups.
Local firms rushing to set up shop in the mainland should take heed.
"This is not about economics at all. This is entirely a political problem," the Asian Wall Street Journal cited an official at CSFB saying.
"Beijing's blood is boiling over this. ... All of our [China] deals are in jeopardy."
This is just the latest example of how China pushes around those who refuse to toe its political line. Countless examples of such intimidation exist in China's recent past and yet companies remain spellbound by the fabled "China Market" -- ?especially companies in Taiwan.
Seeing China as a panacea for Taiwan's economic slowdown, local firms are rushing across the Taiwan Strait in search of a new market, as well as cheap labor and land.
These firms are drawing rising condemnation from politicians who fear China will use them as pawns to further its unification plans.
"Everyone is mistaken in thinking that China is our only future," said former president Lee Teng-hui (李登輝) at a campaign rally over the weekend. Lee, a political juggernaut in Taiwan, then issued a strong warning to businesses that do go.
"The communists will first steal your money and then start to exploit you," he said.
He also debunked the mythical China market. China's consumer market is currently worth only about US$200 billion. By contrast, the US market equals US$1.2 trillion. Taiwanese firms should concentrate their efforts on real markets, not illusory ones, he said.
Lee also called on high-tech firms to think about national security before leaping to China.
A report published in July by the National Security Bureau (國安局), Taiwan's equivalent to the US' CIA, advised the government to use all its means to stem the flow of investment to China.
A high-ranking official in the bureau who confirmed contents of the report for the Taipei Times, took Formosa Plastics chairman Wang Yung-ching (王永慶) as an example of how local businessmen become the political puppets of Beijing once they place their cash in China.
In July, Wang implored the people of Taiwan to "calmly accept the `one China' principle," while repeating his call to lift all curbs on investment across the Strait.
Wang is not the only one calling for links with China. The effort received a huge boost from the three-day Economic Development Advisory Conference which ended on Aug. 26. Proposals passed at the conference called for the lifting of investment ceilings and preparing for direct cross-strait trade.
The new relaxed stance drew an immediate positive response from one of the nation's top high-tech firms, Taiwan Semiconductor Manufacturing Co (台積電).
Earlier this year, its chairman, Morris Chang (
RSS