As Taiwan moves toward finalizing an Economic Cooperation Framework Agreement (ECFA) with China, a US Congressional commission reports a “disturbing trend” by Beijing away from the development of a free market system and toward greater government control of the economy.
“Contrary to its claim of being a market-oriented economy, Beijing continues to comprehensively plan, direct, support and control its economy,” said Carolyn Bartholomew, chairman of the US-China Economic and Security Review Commission.
Releasing the commission’s seventh annual report on Thursday, she said: “Many of China’s economic reforms over the past 30 years are, in reality, a government-directed industrial policy that seeks to promote export-led growth.
“Key industries including auto parts, machine tools, information technology, optics, photonics and clean renewable energy are targeted for government support,” she said, adding that Beijing provides massive loans from state-owned banks to industries already producing over capacity.
Bartholomew said: “This approach gives China’s exporters a substantial price advantage in international markets and disadvantages companies hoping to export to China.”
‘CHILLING’
A leading US economist, speaking on the condition that he not be named, said that Bartholomew’s words were particularly chilling for Taiwan in view of what the report itself said about an ECFA.
“There is widespread opposition to the plan [ECFA] on Taiwan,” the report said.
It added: “Some opponents of the plan, led by the Democratic Progressive Party, charge that a free-trade agreement would sell out Taiwan. Skeptics also maintain that it would be tantamount to a one-China market and eventually political reunification with the mainland.”
BEST OPTION
The report said that proponents of an ECFA, spearheaded by the administration of President Ma Ying-jeou (馬英九) and major industry associations, argued that signing the proposal with China represented Taiwan’s best near-term option for revitalizing its economy after the effects of the global economic crisis.
The report said, however, that other commentators believe that an ECFA would harm Taiwan’s economy by hollowing out its manufacturing and electronics industries, crowding out trade with the US, Japan, the EU and ASEAN nations, while increasing Taiwan’s economic dependency on China.
Rupert Hammond-Chambers, president of the US-Taiwan Business Council, said: “Ma doesn’t have support for the political/military initiatives that China will demand post-ECFA and that’s when support drops off. Not for ECFA but for those initiatives that are political and military in nature.”
“ECFA will continue to enjoy support through the process — unless its roll out is handled poorly,” he said.
Bartholomew said it was the commission’s responsibility to focus on the difficult areas of the US relationship with China and “shine some light” on areas where there were problems.
FIGHTER JETS
Asked if the commission was in favor of the US selling advanced F-16 fighters to Taiwan, Larry Wortzel, vice chairman of the Commission, said that it was very clear that the balance of air power across the Taiwan Strait was tipping in favor of China and that Taiwan’s aging air force fleet needed to be improved to address the imbalance.
He said: “It’s not our place to recommend specific weapons systems.”
Bartholomew said, however, that the commission members were going to Asia next month and would spend some time in Taiwan where they would focus their discussions on air power.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
RSS