Mon, Apr 11, 2005 page8

• Private sector is China's first target

  • By Lai Shin-yuan 賴幸媛
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  Just when Taiwanese by the hundreds of thousands were taking to the streets of Taipei to protest China's aggression and its "Anti-Secession" Law, Hsu Wen-lung (許文龍), presidential adviser and founder of Chi Mei Group, published a letter in a newspaper in support of Beijing's law and its proposition that both sides of the Taiwan Strait are part of "one China." We can't but wonder why Hsu -- once a staunch supporter of Taiwan independence -- published this letter after retiring as Chi Mei chairman, betraying his life-long beliefs . Oddly enough, examples of this type abound.

  In the early 1950s, former premier Zhou Enlai (周恩來) separated friendly Japanese enterprises from unfriendly ones and offered preferential conditions to friendly Japanese firms. Eventually, friendly companies prevailed over unfriendly ones, which were compelled to change their political position.

  Zhou issued guidelines confirming that "people take the initiative and the government should follow suit." In 1958, Zhou proposed three policies, including "no separation between economy and politics," "three political principles guiding Sino-Japanese relations" and "three principles guiding trade with Japan."

  The political principles guiding Sino-Japanese relations state that if a trade agreement is to be signed, Japan should not pursue an anti-China policy, engage in conspiracies to establish `two Chinas' or obstruct normalization of relations.

  Principles guiding trade with Japan demanded that the trade agreement be signed by both governments. But prior to the inking of a government-signed agreement, such pacts could be signed by the private sector -- but these signatories must abide by the above-mentioned policies or principles. It also stated that preferential treatment would be given to enterprises in difficulties.

  China asked that Japan, prior to negotiating a memorandum on trade, first participate in political talks. In the talks, Japan should recognize the People's Republic of China as the only legitimate Chinese government, that Taiwan is part of China and that the resolution of the Taiwan issue is China's internal affair. Only after the two governments issued a joint statement to this effect could they enter into trade negotiations.

  By doing this, Beijing consolidated China-friendly forces in Japanese industry and also extended its influence into the Diet. Beijing used the opportunity presented by the annual signing of the memorandum on trade with China-friendly Diet-members to have a statement added condemning prime minister Eisaku Sato for supporting Taiwan.

  This was a textbook example of the use of political power to direct economic matters, followed by the use of economic forces to create political pressure in order to achieve specific political goals.

  Over the past few years, Beijing has stuck the "green" label on some Taiwanese businesses in China, and they have used administrative methods such as tax and labor inspections as a way to interfere with the manufacturers included on a blacklist and force them to give up their political ideals. Examples include Chang Jung-fa's (張榮發) refusal to continue as presidential adviser and Hsu's retirement.

  In 16th century Japan, the Tokugawa shogunate was concerned that the colonial expansion of Western missionaries and traders would turn Japan into a colony, and so it sealed off Japan, leaving Nagasaki as the only harbor open for trade. Spain's colonization policy consisted of first sending missionaries, which were to be followed by trade, before finally sending troops to forcefully occupy a territory.

  To prevent this, Japan decided that the Dutch and the Chinese were the only ones to be allowed into Nagasaki, because the Dutch controlled advanced technologies that the Japanese required and the Chinese were not religious. To prevent Western missionaries from making their way onto Japanese territory, the Tokugawa regime decided that any Westerner entering Nagasaki be made to trample on a portrait of Jesus, believing that missionaries would not commit sacrilege.

  The current actions of the Chinese government are an attempt at emulating the Tokugawa. So you want to do business with us? Sure! Just trample on Taiwan consciousness and you'll be welcome! Be it Chang or Hsu, all past mistakes are forgotten as soon as they perform the ritual denigration. But the person doing the trampling has no control over how the ceremony shall be performed or how many times he has to perform it.

  When economists discuss the externalities of economic behavior, a common illustration is of a firm building a factory to make money, but the waste that it produces is pumped into a river and is cleaned up at the public expense.

  There is nothing wrong with the fact that the Taiwanese companies investing in China are doing so to make a profit. But Beijing does not recognize Taiwan as a sovereign nation, and has not renounced the use of force if Taiwan seeks independence.

  If investment in China does not impact the relationship between Beijing and Taipei, then the behavior of Taiwan's businesspeople is purely in the realm of private economic behavior, and the government needs only ensure that registration and taxation of the business is properly carried out. It does not require these businesses demand that the Chinese government recognize Taiwan.

  But if these businesspeople act in such a way as to disrupt the operation of Taiwan's government for their own economic benefit, or even spearhead China's effort against popular demonstrations, then it is creating external costs that have to be borne by everyone in Taiwan. It's behavior transcends the realm of private action, and the government is entitled to regulate or forbid this behavior.

  Over the last 20 years, China has used the strategy of using pressure on economic issues or the private sector to influence other nations. We can now expect them to use the same tactics they used against Japan in the 1960s, working through business interests to exert a direct influence on Taiwan's government, manipulating political opinion in Taiwan.

  China has many means at its disposal, including using Taiwanese legislators to influence government policy, or even providing illegal political funding, gathering political intelligence and controlling political figures in Taiwan.

  Taiwan cannot just wait to be overwhelmed by these successive waves of attack from China. From the perspective of national security, we must implement measures to control this emerging crisis.

  Lai Shin-yuan is a Taiwan Solidarity Union legislator.

  Translated by Daniel Cheng, Perry Svennson and Ian Bartholomew
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