Fri, Aug 09, 2002 page10

• Business ponders Chen's statements

  STRAIT TALK While some say that the Taiwan president may have intentionally thrown a monkey-wrench into the gears, others say he broke an important promise

  • By Richard Dobson / STAFF REPORTER
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  President Chen Shui-bian (陳水扁) has deliberately sunk any chances of

  improving ties with China and endangered Taiwan's economic security along

  with that of the US with his recent inflammatory remarks, according to

  international commentators.

  In editorials and commentaries published in various regional journals,

  Chen's "one country on each side of the Taiwan Strait" statement was roundly

  panned as dangerous while the president himself was pilloried for breaking

  promises not to destabilize ties with China.

  "By calling for legislation to hold a referendum on independence for the

  island, and labeling the two sides of the Taiwan Strait separate countries,

  he has not only broken a promise not to do such things that he made to

  Taiwan's people and its friends around the world," blared an editorial in

  the Asian Wall Street Journal.

  "Mr. Chen's speech has thus damaged the island's economic interests and

  destabilized the complicated three-way relationship between Taiwan , China

  and the US" said the journal.

  Rupert Hammond-Chambers, president of the US-Taiwan Business Council, agreed

  commenting in the Wednesday edition of the same newspaper that Chen had

  broken promises to maintain stability across the strait and potentially

  placing the US' own economic interests at risk.

  "President Chen reneged on a most significant, although unspoken,

  understanding with the United States and China when he raised the

  controversial issue of independence last Saturday sending shudders through

  those who work and trade in the global market," he said.

  Hammond-Chambers pointed out that the integration between the US, China and

  Taiwan has left their economies "increasingly inseparable," therefore

  leaving the US "no other choice" but to become involved in a cross-strait

  conflict.

  "The flow of trade and America's increasing reliance on China and Taiwan is

  itself becoming a major source of risk to America's economic health and well

  being," he said.

  While the immediate media flurry surrounding Chen's remarks will gradually

  fade from the headlines, Hammond-Chambers predicted that "the frigid air

  that now occupies the Taiwan will remain and make any d?tente between the

  two sides highly unlikely in the near future."

  Indeed as an editorial in the Far East Economic Review points out, Chen has

  quite blatantly pulled the plug on even attempting to bridge the

  cross-strait gap.

  "Chen's spin doctors are desperately trying to convince everybody that his

  Saturday speech represents nothing new. But in the coded language of

  cross-strait relations, he delivered a very clear message: I don't want to

  talk," it said.

  Additionally, by deliberately taking an offensive approach to "engagement"

  with China, Chen risks surrendering support it has garnered internationally

  by previously playing up its earnest attempts to initiate dialogue while

  enduring China's victimization.

  "Taiwan's leaders can best build international support by refraining from

  deliberately provoking China. Indeed, one reason Taiwan maintains the moral

  high ground is because in recent years it has sought to engage the mainland,

  despite many rebuffs," it said.

  "The best he can do is to refrain from repeating those phrases and remember

  in future that he was elected with a mandate to both preserve Taiwan's

  sovereignty and find a modus vivendi with an often irrational mainland," it

  said.

  However irrational was the term used by one investment banker who requested

  anonymity, when asked about the motivation for Chen's remarks.

  "The market lost NT$50 billion in value in trading on Monday. This is the

  price we have to pay for a leader who is as vain as he is responsible," said

  the banker.

  While theories abound about Chen's motivation, the general consensus is that

  the remark was hoped to bolster support among hard-line pro-Taiwanese after

  two years of taking a conciliatory approach.

  According to a report by Goldman Sachs the remarks could also have been

  aimed at gaining leverage in dealing with Beijing and slowing efforts to

  establish the direct "three links" - further economic integration with China

  - and was probably viewed as a "low risk strategy."

  "There could well be negative economic and political fallout in the short

  run. The prospects of "three-links" now become more remote, and the chance

  of a genuine political reconciliation during Chen's tenure has diminished,

  resulting lost opportunity for both sides," said the report.

  However, despite the strong words Goldman Sachs doesn't see any risk of

  military confrontation on the horizon and predicts that economic activities

  across the strait should continue "business as usual."
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