Recent unconfirmed reports that Beijing had ordered the closure of a petrochemical plant run by Taiwan's Chi Mei (奇美) group in Jiangsu Province touched off a virtual cross-strait war. Even though the reports turned out to be nothing more than rumors, the damage had been done. Left exposed by the war of words were the political and economic bottom lines of the two sides. Once again the futility of trying to keep business separate from politics was clearly shown.
Shi Guangsheng (
His remarks highlighted Beijing's two-pronged strategy. The Taiwan government's strong response to the rumor proved a deterrent to any possible attempt by Beijing to impose sanctions on Chi Mei. However, despite Shi's nicely worded assurances to Taiwanese businesses, he minced no words in his criticism of Chi Mei. Even if Beijing takes no concrete steps against the company, local Chinese and foreign enterprises in China can plainly see which way Beijing's policy is blowing. They will consequently look at Chi Mei in a completely different light and perhaps even give it a wide berth. In a communist polity like China, local governments will naturally follow the will of their superiors and harass Chi Mei under the pretext of tax inspections, environmental issues and business regulations. Chi Mei's plant may have been spared closure, but days of misery surely lie ahead.
The immaturity of Taiwan's government was once again demonstrated by its flippant response to the rumors. Chi Mei's managers and the Beijing government denied the reports from the very beginning. Neither the Mainland Affairs Council (MAC) nor the Straits Exchange Foundation was able to confirm the them. Nevertheless, both the Government Information Office and the MAC issued warnings that Taiwan might retaliate by delaying the "big three links" and the easing of the "no haste, be patient" policy. Those statements exposed Taiwan's bottom line. When the reports turned out to be untrue, the officials changed their stance and said the schedule for easing the no haste policy remains unchanged.
Once again the ease with which officials flip-flop on crucial issues raise a big question mark about the government's ability to resist pressure and to formulate stable policies. Trade and economic relations have been intensifying, and will continue to, between Taiwan and China. The Chi Mei row proved to be an imaginary war, but it showed that economic relations are a battlefield mined with political explosives. The business environment can be turned upside down at any time by an unforeseen political event on either side of the Taiwan Strait. This is a risk that anyone who wants to do business across the Strait must seriously consider.
Some people have advocated a common market between Taiwan, China and Hong Kong. But given the paper-thin trust between Taiwan and China -- as well as the political wranglings that break out more easily than teenage acne -- any attempt to separate business from politics or to promote political integration by means of economic integration is purely wishful thinking. The two sides might have to wait until their entries into the WTO to build any cross-strait economic and trade framework. Only the WTO umbrella can provide a solid foundation and reasonable protection for cross-strait economic relations.
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