Japanese economist Kenichi Ohmae recently released the Chinese edition of his new book The Emergence of the United States of Chunghwa. In it he predicted that the two sides of the Taiwan Strait will be unified by 2005 and that the campaign focus for the 2004 presidential election will be unification. If unification does not take place by 2005, Ohmae believes Taiwan will lose its value to China within five years and virtually all Taiwanese businesses will relocate to China. Some members of the Taiwan media have exaggerated his positions, perhaps in an attempt to justify singing a eulogy for Taiwan. Therefore, a stern refutation of Ohmae's views is in order.
First, it must be pointed out that the "unification" of Ohmae is not the "unification" of the pro-unification camp. His use of the Japanese word for "federation," at first appears to be some sort of special state-to-state relationship, perhaps even coming close to former president Lee Teng-hui's (
This is because it is the consistent position of Ohmae that mankind will inevitably head toward a world with no national boundaries. In his book The End of the Nation States: The Rise of Regional Economies, Ohmae unequivocally suggested that China should allow more local autonomy and evolve into a commonwealth. In his The Invisible Continent: Four Strategies Imperative of the New Economy, Ohmae predicted that China is very likely to break into 10 or 12 regional entities, which may in turn form a Chinese commonwealth.
He also said that if the commonwealth is modeled after the British commonwealth, under which each region is permitted to enjoy autonomy or even independence, Taiwan would likely join. He believed that regional disintegration of China in such a manner may be the only way through which a large nation such as China can move toward a knowledge-based economy.
Ohmae's position is obviously substantively different from the way "unification" is used by some people in Taiwan.
Ohmae also said during interviews that while China may be asking Taiwan to accept "one China," the "one country, two systems" model Beijing proposes is in substance "two Chinas." Ohmae said that China will disintegrate into six regions and, instead of seeing China as one large nation, one might as well see it as a "Chunghwa federation" formed of several regions.
He went on to explain that this federation is culturally defined, and that is how he justifies calling it a "Chunghwa federation," rather than a "Chinese federation." He considers the term Chinese to be more politically loaded than "Chunghwa." Thus, it would be an arrangement that even Singapore could join, he said. Ohmae emphasized that nothing is being changed for the two sides of the Taiwan Strait, they just need to recognize and concede reality.
The reason Ohmae's remarks are being reviewed in detail here is to clarify that his "unification" is not the "unification" concept that is hotly debated every day in Taiwan. It would be more appropriate to translate his idea of a "Chunghwa federation" as a "commonwealth," in order to truthfully reflect his intent.
Ohmae said that local governments in China, to protect Tai-wanese investments, cannot allow Beijing's military to unleash its hostility on Taiwan. He says a majority of Chinese believe that the introduction of Taiwanese capital and talent into China is helping facilitate the economic development of that country, and therefore the powerful politicians in Beijing no longer feel any hostility toward Taiwan.
This is of course a very erroneous assumption and may cause Taiwan to turn a blind eye to China's military and political threats. Some may even be misled into believing that Taiwan can completely disregard national security concerns and work closely economically with China.
Ohmae may be wrong, but at least he voiced his assumptions. Since Taiwanese academics and decisionmakers know much more about China than he does, they of course were not misled by him. As for those who deliberately disregard the error of Ohmae's assumptions, they are not only foolish, but may in fact create grave risks for the nation.
Simply put, he thought that Taiwan has very strong economic prowesses, enabling it to make good use of the resources in China and at the same time provide enough help to Beijing to keep its military at bay. But, he also believes that Taiwan's ability to do this will fade within a few years. He also feels that Taiwan lacks the ability to overcome its other problems and therefore, unless it becomes part of the "Chunghwa federation," it will lose competitiveness and all its business enterprises.
He doesn't seem to recognize that Taiwan was still able to create economic miracles. This has been proven by the development of the nation's electronic information industry, which has given Taiwan international prominence over the past decade and the recently developed IC-chip-design industry and TFT-LCD display industry. The latter two already rank number two in the world.
In the past decade, Taiwanese investments and exports to China have become the highest in the world. Beside trapping the capital and resources of some Taiwanese businesses in China, it is hard to see what contribution China has made to Taiwan. Taiwanese businesses and professionals are gradually being replaced by China's own companies and people.
Ohmae ignored these important facts, erroneously believing that it is a big advantage for Tai-wanese firms to invest in China or assist foreign firms in entering China. This is a big blind spot for Ohmae, who simply does not understand that China's aim is to use Taiwan, but also to get rid of it as soon as it can.
Because the management skills and R&D efforts of Tai-wanese businesses are highly competitive, the ability of these firms to do business in China does not pale in comparison with those of other countries. Therefore, Taiwan's attitude toward investment and utilization of the Chinese market does not need to be particularly anxious or eager. In reality, its level of utilization and dependency on the Chinese market has long surpassed those of other countries.
Michael E. Porter of Harvard University, an expert on nation states' competitiveness, has said that an excessive focus on invest-ments in China and its market may cause denigration of Tai-wan's ability to upgrade its industries and make innovations. Ohmae has apparently not paid any attention to this risk. Taiwan's over-dependency has given China the opportunity to absorb its skills and management know-how.
Without addressing these issues, Ohmae's statements that further cooperation between China and Taiwan will keep Taiwan from losing out, and that without such cooperation, Taiwan will lose competitiveness are nonsensical. They also make for unconvincing discourses in academic domains.
Moreover, Ohmae believes that Taiwan has already attained credibility and trust-worthiness in the international community, something lacking for China. Therefore, he thinks that Taiwan can use this as leverage to work with third parties developing the Chinese market.
This is a remark based on questionable logic. If China is neither credible nor trustworthy, how can Taiwan blindly engage in cooperation with such a country at the risk of being forcibly unified?
Ohmae's views are not only naive but might even become a joke in academic circles.
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