President Ma Ying-jeou (馬英九) has six months left in office as the president of the Republic of China. The question of what he would do during that time has attracted public interest, with commentators calling on the public to remain vigilant.
The rumors that Chinese investors are preparing to spend US$600 million (NT$19.7 billion) to purchase 100 percent of Eastern Media International’s shares — the Carlyle Group has already sold its 61 percent stake in Eastern Broadcasting Co — appear to point at a sneak attack.
The government has failed to provide any reassurance on the matter, while the general opinion is that the move by Chinese investors is an attack on the public. Could a government be any more of a failure? Chinese investors should not be allowed to purchase Taiwanese media companies; the regulations on this matter are very clear.
First, the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例), Article 73, states: “Unless permitted by competent authorities, any individual, juristic person, organization, or other institution of the Mainland Area, or any company investing in any third area may not engage in any investment activity in the Taiwan Area.”
Second, Article 8 of the Investment Commission’s Measures Governing Investment Permits to the People of the Mainland Area (大陸地區人民來臺投資許可辦法) states that an application for investment would be rejected if it creates a situation of “political, social or cultural sensitivity” or “impacts national security.”
Third, Article 10 of the Satellite Broadcasting Act (衛星廣播電視法) states: “The total shares of a satellite broadcasting business directly held by foreign shareholders shall be less than 50 percent of the total shares issued by said business.”
Although the purpose of the laws and regulations is clear, merely issuing them is not sufficient in itself: They must be enforced properly and any loopholes should be closed.
Chinese media company Dynamic Marketing Group (DMG), under the banner of its US subsidiary, DMG Entertainment Group, snapped up 60 percent of Eastern Broadcasting Co shares to own a controlling stake in the company. The final stage of the acquisition is still under way.
The group’s chief executive officer, a US citizen, said that he is not Chinese and that this should clear the way for Taiwanese authorities to approve the purchase. In doing so, he has revealed that the acquisition was well-planned and put together behind the scenes. For this reason, it is impossible to discount the possibility that this was an inside job, carried out at a high level from within the Ma administration.
The public demands an explanation from the government. As the details of the purchase are shrouded in mystery, the government must clarify the following matters:
First, DMG’s legal representative in Taiwan is a law firm founded by Minister Without Portfolio Jaclyn Tsai (蔡玉玲) and her husband. In addition, Tsai performs a supervisory role for the National Communications Commission (NCC).
Second, there have been claims that officials at the NCC and the Investment Commission provided DMG with information on how to pass the legal review. Moreover, why did a legislator single out Vice President Wu Den-yih (吳敦義), asking: “Has your son, Wu Tzu-wen (吳子文), been in contact with DMG?”
The Chinese Communist Party, the Chinese government and the People’s Liberation Army are all interested in Taiwanese media. Weighed up against US$600 million, DMG’s purchase of a majority stake in Eastern Media International would seem to most market observers to be an astronomical offer, but this is not a normal business transaction.
In the last few years under the Ma administration, the joke on the street has been that “the question is not whether Taiwan would be sold off, but whether it would be possible to secure a good price for it.”
As for Eastern Media International’s shareholders, that they after years of laborious operations are able to extricate themselves from the business profitably and leave on a high note means that they would be delighted at the sale price.
However, the real question is whether the public would want the so-called “largest Chinese-language broadcasting network in Asia” to become a propaganda tool for Beijing.
Would the sale give Eastern Media International an unfair competitive advantage over other Taiwanese broadcasters, thereby inflicting a blow to the freedom of speech within Taiwanese media?
Would this cause a change in the nature of Taiwan and the Taiwanese way of life?
Market analysts say that China’s economic growth, which has caused a surge in Chinese investment in companies across the globe, means that it is becoming increasingly difficult to distinguish Chinese investors from foreign ones. Therefore, they ask, if the government blocks foreign investment, would this not cause Taiwan to become increasingly marginalized in the global manufacturing supply chain?
Paradoxically, this is both an over-simplification and an over-complication of the problem. A competent government would carry out a survey of Taiwanese industries, categorize them into varying levels of sensitivity and examine each category to ascertain what the various entry thresholds should be.
This would give domestic manufacturers space to develop, while ensuring Taiwan’s existence as an autonomous nation. Even the US, who champions free-market capitalism, has more complex and detailed security mechanisms than Taiwan, protecting its critical industries from investors in China, Russia and other nations. In addition, the US has an investment commission that is chaired by the US secretary of state. This shows that in a free-market economy, the government should not simply stand back and do nothing — let alone the Taiwanese government, with the nation’s unique situation.
The media is without question a sensitive industry. Moreover, in the past few years, the media have been affected by improper government policies that have resulted in an increasingly fragile environment, ripe for exploitation by external forces, which introduces new challenges for the industry.
Eastern Media International being sold off to Chinese investors might be viewed as a product of ineffective governance. When so many within the industry are up in arms over the issue, can all their criticisms be dismissed as baseless claims? The ministries involved in the case must take care to ensure that they do not end up becoming public enemy No. 1 through their actions — or inaction.
Translated by Edward Jones
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