Talk about a “February crisis” began in China. Since the Lunar New Year falls in late January this year and because of the large number of companies that have closed or are closing as a result of the economic crisis, next month may begin with a wave of unemployment sweeping across China causing social instability.
In addition to sending the unemployment rate into a double-digit percentage, the economic crisis is also affecting the middle classes, who have acted as a buffer between China’s privileged and lower classes. Their addition to the ranks of unemployed will have a direct impact on the Chinese Communist Party’s (CCP) rule. The upshot of this is that since November the CCP has done its best to help the middle classes ride out the storm by propping up the stock market and the real estate market. These attempts include trying to push the Shanghai composite index to somewhere between 2,400 points and 3,000 points to help the middle classes who entered the market that reached its height of 6,124 points around the time of the CCP’s 17th national congress in the fall of 2007.
However, although Chinese Premier Wen Jiabao (溫家寶) has spent 4 trillion yuan (US$586 billion) trying to prop up the market, the index has barely increased from its low of 1,678 points in November and is still languishing below the 1,900-point mark.
In early November, Hong Kong Chief Executive Donald Tsang (曾蔭權) warned that the economy would slow down this year. Before that, a wave of bankruptcies occurred among Hong Kong-invested businesses in the Pearl River Delta, a situation that is likely to deteriorate further after the Lunar New Year.
In late October, Li Ka-shing (李嘉誠), Hong Kong’s richest man, stopped making new investments anywhere in the world. He recently also sold his shares in Bank of China and Bank of America Corp is selling part of its stake in China Construction Bank Ltd. The question is, is this a foreboding of more to come.
During an interview with the Washington Post on Dec. 9, President Ma Ying-jeou (馬英九) said: “The idea is not to encourage our people to invest on mainland China, because the investment climate over there isn’t as good as it was before ... So the idea is not to encourage investment over there, but instead to make Taiwan’s own investment climate better.”
In 2007, during the presidential election campaign, I warned about the restrictions on foreign businesses included in China’s Foreign Investment Industrial Guidance Catalogue (外商投資產業指導目錄) and now Ma talks about the investment environment as not being “as good as it was before.” The man has some nerve.
Compared with China and Hong Kong, Taiwan’s government is being optimistic if it thinks issuing consumer vouchers is enough to solve the problem and that China can be relied upon to solve all the other economic problems. Apart from speeding up Taiwan’s opening up to China, all Ma is doing is running around performing his “spending show.”
I don’t think there is much risk that people will save their consumer vouchers for their historical value. It is pretty clear that they are meant for spending, so there is no need for Ma to run around promoting their use. What worries the public more is any unexpected problems that may occur because of the government’s arrogance and inability. The only reason Ma is promoting the vouchers and encouraging spending is because he wants to create an image of himself as “Ma the Savior.”
The problem is that, whether it is the consumer vouchers or the “special state affairs” fund, the money comes from hard working Taiwanese taxpayers, not from Ma’s own pocket.
Ma’s spending is not only incapable of stimulating the public’s willingness to spend, but it also leaves an unpleasant feeling that he is trying to show off his own wealth. Ma and many of his top officials have savings in excess of NT$10 million and they also have other funds, shares and real estate. How could they understand the plight of the average citizen or the unemployed?
This spending act does nothing to stop a recent spate of deaths from starvation during cold weather, suicide and murder, or arrogant attitudes toward Taiwan’s sovereignty and living standards.
Paul Lin is a political commentator based in Taiwan.
Translated by Perry Svensson
It is employment pass renewal season in Singapore, and the new regime is dominating the conversation at after-work cocktails on Fridays. From September, overseas employees on a work visa would need to fulfill the city-state’s new points-based system, and earn a minimum salary threshold to stay in their jobs. While this mirrors what happens in other countries, it risks turning foreign companies away, and could tarnish the nation’s image as a global business hub. The program was announced in 2022 in a bid to promote fair hiring practices. Points are awarded for how a candidate’s salary compares with local peers, along
China last month enacted legislation to punish —including with the death penalty — “die-hard Taiwanese independence separatists.” The country’s leaders, including Chinese President Xi Jinping (習近平), need to be reminded about what the Chinese Communist Party (CCP) has said and done in the past. They should think about whether those historical figures were also die-hard advocates of Taiwanese independence. The Taiwanese Communist Party was established in the Shanghai French Concession in April 1928, with a political charter that included the slogans “Long live the independence of the Taiwanese people” and “Establish a republic of Taiwan.” The CCP sent a representative, Peng
Japan and the Philippines on Monday signed a defense agreement that would facilitate joint drills between them. The pact was made “as both face an increasingly assertive China,” and is in line with Philippine President Ferdinand Marcos Jr’s “effort to forge security alliances to bolster the Philippine military’s limited ability to defend its territorial interests in the South China Sea,” The Associated Press (AP) said. The pact also comes on the heels of comments by former US deputy national security adviser Matt Pottinger, who said at a forum on Tuesday last week that China’s recent aggression toward the Philippines in
The Ministry of National Defense on Tuesday announced that the military would hold its annual Han Kuang exercises from July 22 to 26. Military officers said the exercises would feature unscripted war games, and a decentralized command and control structure. This year’s exercises underline the recent reforms in Taiwan’s military as it transitions from a top-down command structure to one where autonomy is pushed down to the front lines to improve decisionmaking and adaptability. Militaries around the world have been observing and studying Russia’s war in Ukraine. They have seen that the Ukrainian military has been much quicker to adapt to