Even foreign companies are now getting embroiled in the local elections, with the pan-blue camp quoting a recent report by Merrill Lynch. The report stated that if the Democratic Progressive Party (DPP) fails to win a majority of the county seats, the market will react positively. It went on to explain that a defeat would force them to rethink cross-strait policy. Global Views Monthly also quoted Guy Wittich, chief executive officer of the European Chamber of Commerce, Taipei (ECCT) as saying that it was looking less and less likely Taiwan could become a transit hub for the Asia-Pacific region, an opinion trumpeted by pro-unification factions.
Taiwanese businesspeople want the government to relax regulations and allow them free rein to invest in China, and foreign investors would like to use Taiwan as a springboard into China, using the island when the need is there, and getting out the moment they no longer need it.
So can Taiwan become a transit hub? Far be it from me to throw cold water on the idea, but in recent years Taiwanese ports have seen a drop in the volume of cargo handled, with Kaohsiung falling in global rankings from third place to sixth last year, falling behind other Asian ports such as Shanghai, Shenzhen and Busan, South Korea.
Please, though, do not lay the blame at the feet of the government for holding back on direct flights -- if anyone should take responsibility here, it is those businesspeople who have relocated production to China.
Since production lines have been moved across the Strait there is little cargo left in Taiwan to handle, and with little cargo to handle, cargo ships are not likely to stop here, making instead for Shanghai and Shenzhen to pick up cargo produced there by Taiwanese businesses. Air freight was also hit badly following the move of high-tech manufacturing to China. It really has little to do with direct flights.
Having said that, we should also feel sorry for these foreign investors. This year qualified foreign institutional investors have poured more money into Taiwan's stock market than that of any other Asian country save Japan.
This money, however, cannot make up for losses made due to Taiwanese businesses setting up in China. At present the weighted share price index of the TAIEX is wavering around the 6,200 mark, and for the time being there is no light on the horizon.
Foreign investors are, after all, businesspeople, and the reason they are investing so heavily in Taiwan's stock market is that they want the value of their stocks to increase. They are hoping the government will do something to stimulate the stock market so they can pull out without making a loss. They are putting their hopes in direct flights and a relaxation in the government's current cross-strait policy, which explains Merrill Lynch's report.
The thing is, what businesspeople want is not always in the national interest. According to a government commissioned report, direct flights could save businesses between NT$14 billion and NT$20 billion in transportation costs annually.
However, it would also mean an almost two-fold increase in investment in China (worth around NT$320 billion), which would mean the economy would shrink. Taiwan would also be even less attractive as a transit or distribution center, and if one also takes into account the impact this will have on public security and national defense, it is clear the balance tips against Taiwan.
We could say that the Merrill Lynch report and the comments from ECCT are misinformed, but we cannot blame them, for they are looking at the situation from a Western perspective. The ones we should be blaming are the pro-unification factions who choose to exploit these for their own political interests.
Huang Tien-lin is a national policy adviser to the president.
Translated by Paul Cooper
Chinese Nationalist Party (KMT) caucus whip Fu Kun-chi (傅?萁) has caused havoc with his attempts to overturn the democratic and constitutional order in the legislature. If we look at this devolution from the context of a transition to democracy from authoritarianism in a culturally Chinese sense — that of zhonghua (中華) — then we are playing witness to a servile spirit from a millennia-old form of totalitarianism that is intent on damaging the nation’s hard-won democracy. This servile spirit is ingrained in Chinese culture. About a century ago, Chinese satirist and author Lu Xun (魯迅) saw through the servile nature of
In their New York Times bestseller How Democracies Die, Harvard political scientists Steven Levitsky and Daniel Ziblatt said that democracies today “may die at the hands not of generals but of elected leaders. Many government efforts to subvert democracy are ‘legal,’ in the sense that they are approved by the legislature or accepted by the courts. They may even be portrayed as efforts to improve democracy — making the judiciary more efficient, combating corruption, or cleaning up the electoral process.” Moreover, the two authors observe that those who denounce such legal threats to democracy are often “dismissed as exaggerating or
Monday was the 37th anniversary of former president Chiang Ching-kuo’s (蔣經國) death. Chiang — a son of former president Chiang Kai-shek (蔣介石), who had implemented party-state rule and martial law in Taiwan — has a complicated legacy. Whether one looks at his time in power in a positive or negative light depends very much on who they are, and what their relationship with the Chinese Nationalist Party (KMT) is. Although toward the end of his life Chiang Ching-kuo lifted martial law and steered Taiwan onto the path of democratization, these changes were forced upon him by internal and external pressures,
The Chinese Nationalist Party (KMT) caucus in the Legislative Yuan has made an internal decision to freeze NT$1.8 billion (US$54.7 million) of the indigenous submarine project’s NT$2 billion budget. This means that up to 90 percent of the budget cannot be utilized. It would only be accessible if the legislature agrees to lift the freeze sometime in the future. However, for Taiwan to construct its own submarines, it must rely on foreign support for several key pieces of equipment and technology. These foreign supporters would also be forced to endure significant pressure, infiltration and influence from Beijing. In other words,
RSS