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
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
RSS