There is an ongoing debate on whether Democratic Progressive Party (DPP) presidential candidate Frank Hsieh (
But a whole myth surrounds that debate.
The pan-blue camp is using this myth to attack the DPP government's "isolationist" policies in an attempt to push its consistent stance that Taiwan's future lies in China. In doing so, however, they disregard the fact that the capital invested in China accounts for more than 60 percent of Taiwan's total investment abroad.
Official statistics released by the government last year put the figure at 63.9 percent. In addition, Taiwan's exports to China made up 38.6 percent of the nation's exports last year. With such figures, how can there even be talk of isolationist policies? The pan-blue camp is simply using this issue to mobilize political support.
The pan-green camp has also taken advantage of this myth. If we look at the history of Taiwanese investment overseas, we are reminded that the government used to encourage companies and individuals to make indirect investments in China via a third country -- known as the "track two" option -- so that their investments would enjoy economic and trade protection enjoyed by other countries.
Today, although the government has begun, to a certain degree, to open the gates to direct investment in China -- the "track one" option -- many businesses still prefer "track two" because of its financial management and tax advantages. For companies with large projects requiring heavy investment or with a high profile, "track two" is not an option.
As a result, even though the pan-green camp keeps clinging to the "track one" option, domestic capital continues to flow to China via "track two" channels.
From a macroeconomic perspective, the fact that the "track one" option cannot prevent the outflow of capital indicates that the government's capital control capabilities have been eroded by the fast capital movements of globalization. From a public policy perspective, the government should examine the effectiveness of this policy tool.
In this light, Hsieh's proposal to adjust the "track one" mechanism has helped allay the pan-green camp's anxiety over capital outflows and resolve the "myth."
A closer look shows that its cleverness lies in the dynamic management of investment projects on a case-by-case basis, by which a committee or a small team will be formed to examine and decide on individual investment projects in China.
In other words, this mechanism would achieve both the goals of "active management" and "effective opening."
Still, some parts of Hsieh's proposal require clarifications.
How does his proposed committee, or small team, differ from the Ministry of Economic Affairs' Investment Commission and how should their functions be separated?
To deconstruct the legacy of authoritarian rule under the Chinese Nationalist Party (KMT), the DPP has followed up on the transition of political power by introducing elements of democratization outside the existing policy-making mechanism and established various commissions, such as the Environmental Protection Administration's environmental evaluation committee and other deliberative committees.
But these have resulted in violations of the democratic principle of balance between power and responsibility.
Lu Chun-wei is a doctoral student in the Department of Political Science at National Taiwan University.
Translated by Ted Yang
In their recent op-ed “Trump Should Rein In Taiwan” in Foreign Policy magazine, Christopher Chivvis and Stephen Wertheim argued that the US should pressure President William Lai (賴清德) to “tone it down” to de-escalate tensions in the Taiwan Strait — as if Taiwan’s words are more of a threat to peace than Beijing’s actions. It is an old argument dressed up in new concern: that Washington must rein in Taipei to avoid war. However, this narrative gets it backward. Taiwan is not the problem; China is. Calls for a so-called “grand bargain” with Beijing — where the US pressures Taiwan into concessions
The term “assassin’s mace” originates from Chinese folklore, describing a concealed weapon used by a weaker hero to defeat a stronger adversary with an unexpected strike. In more general military parlance, the concept refers to an asymmetric capability that targets a critical vulnerability of an adversary. China has found its modern equivalent of the assassin’s mace with its high-altitude electromagnetic pulse (HEMP) weapons, which are nuclear warheads detonated at a high altitude, emitting intense electromagnetic radiation capable of disabling and destroying electronics. An assassin’s mace weapon possesses two essential characteristics: strategic surprise and the ability to neutralize a core dependency.
Chinese President and Chinese Communist Party (CCP) Chairman Xi Jinping (習近平) said in a politburo speech late last month that his party must protect the “bottom line” to prevent systemic threats. The tone of his address was grave, revealing deep anxieties about China’s current state of affairs. Essentially, what he worries most about is systemic threats to China’s normal development as a country. The US-China trade war has turned white hot: China’s export orders have plummeted, Chinese firms and enterprises are shutting up shop, and local debt risks are mounting daily, causing China’s economy to flag externally and hemorrhage internally. China’s
During the “426 rally” organized by the Chinese Nationalist Party (KMT) and the Taiwan People’s Party under the slogan “fight green communism, resist dictatorship,” leaders from the two opposition parties framed it as a battle against an allegedly authoritarian administration led by President William Lai (賴清德). While criticism of the government can be a healthy expression of a vibrant, pluralistic society, and protests are quite common in Taiwan, the discourse of the 426 rally nonetheless betrayed troubling signs of collective amnesia. Specifically, the KMT, which imposed 38 years of martial law in Taiwan from 1949 to 1987, has never fully faced its
RSS