Taking economics and security into account

President Chen Shui-bian's (陳水扁) recent public comments have stressed that Taiwan should take both economic and national security interests into account, saying that "effective management" is a must for the government to control Taiwanese businesspeople investing in China.

Chen's stance has been regarded by some economists as obvious reluctance to strengthen cross-strait economic ties in the near future. However, Cabinet officials said an improving local environment for investors and allowing products involving low-end technologies to be produced in China shows the government's aggressive attitude, and is a smart way to ensure national security.

On July 26, when Chen spoke to the Foreign Correspondents' Club of Japan via videoconference, he stressed the necessity of limiting the number of products and technologies exported to China.

"Do other countries sell their products freely to China without setting up regulations first? If all people believe in `business is business' only, why did the EU impose an arms embargo on China? And why did the international community, especially the Japan and the US, criticize the EU's recent move to lift the arms embargo?" Chen asked.

Chen said that the Legislative Yuan is working on the establishment of laws regulating high-tech technology transfers to China, adding that, even for products involving non-sensitive technologies, the government will still be very cautious.

However, Wu Chih-chung (吳志中), the secretary-general of the EU Study Association-Taiwan, told the Taipei Times that the EU's reluctance to lift the arms embargo on China was more about Beijing government's attitude toward human right issues rather than concerns with high-tech export.

"EU regulations [the EU's 1998 Code of Conduct] prevent sensitive high technologies from flowing into China. But in Taiwan, even with similar regulations regulating the export of high-tech products and professionals, political turbulence hampers them from being implemented effectively," said Wu, who is also an assistant professor at Soochow University in Taipei.

National Science Council (NSC) Minister Wu Maw-kuen (吳茂昆) told the Taipei Times that existing regulations can effectively prevent Taiwan's competitive technologies from flowing into China. Meanwhile, an improving local environment for both domestic and overseas investors has demonstrated the effectiveness of the policies and ensures Taiwan's economic development.

Using Central Taiwan Science Park as an example, Wu said that in the last two years, the government has assisted in land acquisition and offered preferential treatment.

"That's why the world's largest TFT-LCD manufacture, AU Optronics Corp, runs its business well at the park," Wu said.

Wu said that because of the park's sound environment for high-tech firms in the photoelectronic industry, firms from related industries have also been encouraged to choose central Taiwan as their base.

Statistics show that, in the last two years, the park has attracted 70 high-tech firms, which have invested NT$760 billion (US$228.2 million) and created 10,000 jobs. It's estimated that the total sales of the park's firms this year might reach NT$60 billion.

"Shifting computer assembly lines to China is okay for Taiwan, as this is after all part of globalization. Our policies are designed to keep state-of-the-art technologies, which are the result of our R&D, at home," Wu said.