Mon, Apr 18, 2005 page1

• Book warns of new threat from China

  DANGEROUS NATIONALISM The Prospect Foundation says in a new book that China's economy will cool this year, prompting anti-Taiwan sentiments and action

  • By Rich Chang / STAFF REPORTER
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  Experts on national security yesterday predicted China's economy would probably decline this year, and to avoid Chinese people's economic resentment, Beijing would again trigger nationalistic outbreaks against Taiwan, thereby affecting national security.

  A Taiwan-based think tank, the Prospect Foundation, yesterday released a book entitled Taiwan Security 2004-2005, authored by a team of experts led by former National Security Bureau (NSB) director Ting Yu-chou (丁渝洲).

  Contributors to the book included Chang Jung-feng (張榮豐), former NSB deputy secretary general, Lin Wen-cheng (林文程), former senior advisor to the NSB, Lin Cheng-yi (林正義), director of the Institute of International Relations at National Chengchi University and former senior advisor to the NSB, and Arthur Ding (丁樹範), professor of international relations at National Chengchi University.

  "The book concluded that cross-strait security this year would be mainly affected by two factors: the enactment in March of the "Anti-Secession" law and the likely slow-down of the Chinese economy," Ting said.

  He said the book assessed that, according to the principle economic cycle, China's booming economy would probably start to decline this year. And with the expected increase in US interest rates later this year, international capital flows would turn from China to the US, and the US would surpass China this year, again becoming the country receiving the most foreign direct investment.

  Ting said that, according to the book, Chinese enterprises have been investing overseas on a large scale. For example, he said, its three largest state-owned oil companies -- China National Offshore Oil Corp (CNOOC), China Petroleum & Chemical Corp (Sinopec) and China National Petroleum Corp (CNPC) -- have moved a large amount of their capital abroad. The Lenovo Group (聯想) last December also bought IBM's PC business, he said.

  Ting said the book argued that those large-scale investments or the move of Chinese capital were not profit-oriented, but were based on the idea that the money would fare better or be safer overseas.

  The book said that capital fight would better explain those overseas investments, he said.

  Ting said that, according to the book, Beijing has used economic policies to promote overseas investment, because Beijing and Chinese businesses realize the weaknesses of the Chinese economy, and they have been worried about China's economic prospects.

  "To shift people's focus from the bad economy, Beijing this year will again trigger shows of nationalism, such as highlighting the threat of Taiwan's separatism and encouraging anti-Japanese sentiment and demonstrations like those in China now," Ting said.

  He said that the book argued that as Taiwan proposed to amend its constitution and hold elections this year, Beijing will use academics and the media to define whether those political activities break the "Anti-Secession" Law, and would threaten to use force against Taiwan.

  Lin Cheng-yi said the recent ferocious anti-Japanese protests across China were plotted by the government, and the sentiments could suddenly turn into anti-Taiwanese protests.

  "As a result, Taiwan had better stay away from the tensions between China and Japan, but keep a close eye on dangerous Chinese nationalism," he said.
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