Google recently announced without warning that it was considering withdrawing from the China market.
It said Chinese cyber criminals had compromised its Web site and tried to access the Gmail account details of certain Chinese dissidents.
Forgetting, for the time being, any direct implications of this, there is one particular aspect I would like to discuss.
The US and China are currently engaged in an economic dispute about the volume of cheap Chinese imports, which is forcing US companies to lay off workers.
The US government and some multinationals are very unhappy about the Chinese government’s conduct in this case. This dispute is only going to get more heated over the course of this year.
Against this backdrop, Taiwan’s government is pressing on with plans to sign an economic cooperation framework agreement (ECFA) with China, which will align Taiwan more closely with the Chinese economy.
This will get Taiwan embroiled in difficult economic disputes with other countries.
As Google was making its announcement, US journalist Gerald Posner posted a story online discussing a confidential FBI report about the threat to US national security by a Chinese cyber army.
According to the report, the 180,000-strong retinue of criminals had the cyber equivalent of weapons of mass destruction at their disposal.
It says the People’s Liberation Army has developed a network of more than 30,000 military cyber spies, plus more than 150,000 private-sector computer experts.
The Pentagon alone received more than 90,000 sophisticated systematic and combined attacks last year, and this figure doesn’t include attacks on other US government departments, energy suppliers or other commercial institutions of strategic importance.
In fact, many multinationals are coming close to losing their patience with China.
Early last month, the directors and representatives of more than 70 chambers of commerce and industry, including those based in the US, Canada, South Korea and Japan, signed a joint letter to Chinese President Hu Jintao (胡錦濤) that objected to China’s attitude toward unfair competition.
It appears that Google is not alone in its frustration with China’s behavior.
Google does not have fixed investments in China, such as manufacturing plants or equipment. Its decision to leave China is based on considerations of market access alone.
Other companies may share Google’s scruples, but cannot make the decision to withdraw so lightly.
However, when those multinational companies that enthusiastically supported the idea of permanent most-favored-nation status for China become frustrated, and when this feeling of anger spills over to European, Japanese, Korean and Canadian companies, it’s not hard to see that the year ahead will see economic disputes breaking out between China and other countries.
If the government is blind to this situation and steps up integration with China, Taiwan may well find itself caught up in the economic dispute between China and the US.
China is even getting Taiwanese companies to sell Iran equipment that can be used in developing nuclear weapons.
This has prompted the EU to threaten action against Taiwan, and it is just the tip of the iceberg.
Will the government really continue to insist on continuing with this kind of economic suicide?
Lai I-chung is an executive member of Taiwan Thinktank.
Translated by Paul Cooper
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