Taipei Times: As a China policy expert, how do you view the much talked-about removal of the "no haste, be patient" policy that bans the production of high-tech products and places a US$50 million ceiling on investment there?
Yen Wang-ching (顏萬進): I find the consensus hammered out by the Economic Development Advisory Conference meaningless. It urges the government to replace the policy with "active opening, effective management" as long as national security is ensured. Frankly, I don't think cross-strait trade is the key to the country's survival, which I believe depends more on a successful transition to a knowledge-based economy.
All the countries in the world regulate their trade with foreign partners. Now Taiwan produces 60 percent of the world's notebook computers. It took Taiwan eight years to build the edge that will be undone in two years if the sector is allowed to pull production lines across the strait. Should the government give its go-ahead? I don't think so and that has not happened yet.
Take Singapore for example. The city-state also shares a common culture and language with China and places no controls on China-bound investment. Still, the country suffered from negative economic growth last year. It is simply a mistake to tie direct links to boosting the economy. To me, direct links are nothing more than a placebo.
TT: Would you comment on the impact of capital flight across the strait?
Yen: To weigh the impact of capital flight across the Strait, it is necessary to see if the outflow has any crowding-out effect on domestic investment. Based on my observations, the answer is negative. In other words, the country does not suffer from a lack of capital.
Secondly, it is important to examine whether the capital flight has undermined our country's competitive edge in the international arena by prematurely trans-ferring technological know-how to China. In this regard, existing regulations have effectively fended off the possibility.
TT: What are the most frequent complaints brought up by Taiwanese businessmen in China?
Yen: Businessmen in China used to complain about being ignored by the government. Today such complaints are less frequent. Compared to their counterparts in other parts of the world, those investors receive greater attention from the government. The Straits Exchange Foundation is the only agency that has direct and close contact with them. Three times a year, we invite leaders from business associations based in China back to Taiwan for assorted gatherings in which many ranking government officials, including the president and premier, take part to demonstrate their concern for them. There are over 50 such associations in China. During these occasions, they often lobby for the prompt establishment of direct links between the two sides and an opening of branch offices by local banks in China so they can obtain financial assistance more easily.
They also often complain about being unduly harassed by Chinese authorities, such as through unfair tax probes or compulsory attendance at pro-unification events. Financial disputes are also quite frequent.
In general, the Chinese tend to think it is OK to settle financial disputes through means such as abduction. Over 100 Taiwan businessmen have been killed in China in recent years, a figure that is much higher than in any other country. But common culture and language tend to blind the businessmen from the risk.
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