Fri, Jun 18, 2004 page8

• No more golden eggs for China?

  • By Huang Tien-lin黃天麟
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  In a follow-up to the stern statement China's Taiwan Affairs Office issued on May 24 that Beijing "does not welcome Taiwanese business people making money in China only to return to Taiwan to support Taiwanese independence," the People's Daily ran an article on its front page on May 31 criticizing Chi Mei Group founder Hsu Wen-lung (許文龍). Three days later, early in the morning of June 6, the China Internet Information Center published an article written by a Chinese academic entitled "The possibility of mainland economic sanctions against Taiwan cannot be excluded."

  Is China really preparing to put the screws on Taiwanese businessmen, or even to place Taiwan under an economic blockade? I don't think so. We should stay calm. China's attempt to achieve unification through economic means has not yet been accomplished, nor has China completely drained the country -- Taiwan still possesses capital, technology and outstanding industries, something China lacks.

  Some people say that even if Taiwanese companies do not go to China, China will sooner or later obtain these technologies, capital and industries from other countries.

  In the end, the issue is not that simple, because foreign manufacturers are not as magnanimous and generous as Taiwanese manufacturers, who, holding nothing back, provide China with the technologies and management skills she wants. Therefore, if China wants to develop a new industry with the help of some other foreign manufacturers, it will take much longer than if they had been relying on Taiwanese companies.

  The wafer industry is one obvious example. China has implemented two consecutive five-year plans, the 908 and the 909 plans, aimed at developing its semiconductor industry. The 909 plan brought together well-known foreign semiconductor manufacturers, typified by Huahong NEC Electronics, a joint venture with NEC and Motorola's Tianjin plant, but all to no avail. China in the end only managed a breakthrough and subsequent take-off with the help of SMIC, a company that had left Taiwan.

  China is now trying to invest in and develop its thin-film-transistor liquid crystal display industry together with NEC. Whether this joint venture will end up the same way as Huahong NEC did, with China looking to Taiwanese businessmen for help, remains to be seen. In other words, Taiwanese businesses remain China's first choice. As long as Taiwan possesses an industry China wants, Beijing will not kill the goose [Taiwanese businesspeople] that lays the golden eggs.

  So, does this all mean that China will not impose economic sanctions against Taiwan? The answer would have to be that they absolutely will, it's just that the time is not yet ripe. In the event that Taiwan can no longer offer China things that it requires, or if China has already reached the point of satiation regarding these items, Beijing will show no hesitation in putting the screws on pro-green Taiwanese businesses and then on Taiwanese businesses in general.

  Beijing will require them to make their allegiances known, and those that express loyalty to the idea of Taiwanese independence will be given a final ultimatum. After all, all of their capital is in China, and it can be taken away if need be. By that time, the Taiwanese economy will already be considerably weakened and fragile, and finance and the stock market will be in turmoil. China's grand project of achieving unification through economic means would thus have been completed.

  China's three-pronged plan against Taiwan (that is, the Taiwan Affairs Office's criticism of pro-green businesses, the media attack on Hsu and the threat of economic sanctions) are certainly not policies improvised on the fly. To have arrived at this point they must have already gone through detailed evaluations and drills. Given that they have been able to intimidate pro-green Taiwanese businesses without adversely affecting Taiwanese investment in China, and have also increased the proportion of Taiwanese businesses seeing things their way, one could say that Beijing has managed to kill three birds with one stone.

  And what is left for Taiwan in all this? Will we meekly accept humiliations and make concessions to save the situation, thus setting ourselves up for a death blow? In the aftermath of the attack on pro-green businesses by the Taiwan Affairs Office, the government should keep a watchful eye on the weaker side of human nature in businessmen, and take note of the droves of Taiwanese bosses going over to China, taking with them millions, or even billions of Taiwanese dollars in investment.

  If they don't recognize the tell-tale signs here and fail to amend their consistent policy of economic development in China, the time when China will be levying these economic sanctions against Taiwan will not be far off. The more Taiwanese businesses go over to China, the sooner the time that Beijing is waiting for will be upon us!

  Huang Tien-lin is a national policy adviser to the president.

  TRANSLATED BY Paul Cooper and Perry Svensson
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