President Ma Ying-jeou’s (馬英九) government views investments by local businesses in China as one of the solutions to the economic uncertainty and is making every effort to push for the signing of an economic cooperation framework agreement (ECFA) between Taiwan and China.
In a related but preposterous decision, the legislature’s Finance Committee has passed a resolution demanding that the Cabinet’s Financial Supervisory Commission make the approval of applications from local financial institutions seeking to establish branch offices in China conditional on their support for an ECFA.
Foreign enterprises in China, meanwhile, are increasingly concerned about the neo-protectionism of a powerful China. Some are even planning to leave the country and invest in other Asia-Pacific countries.
Recently, Google, the world’s largest Internet search engine, chose to give up an almost 40 percent share of the market in China rather than accept online censorship and has now brought matters to a head by redirecting search traffic from China to Hong Kong. The move adds yet another variable to the tense trade relations between China and the US.
China’s economic growth over the past few decades has often been exaggerated, so much so that its economy is sometimes compared in size to that of the US.
However, the skittishness of foreign enterprises and the Google case are indications that the international community has perhaps attained a better understanding of China. A closer analysis shows that China’s economic growth has largely been based on three factors: cheap labor, a population that accounts for one-fifth of the world’s people and an authoritarian government’s sacrifice of the environment.
When paramount leader Deng Xiaoping (鄧小平) adopted the policy of reform and opening in 1978, China was a poor country with an endless supply of manpower able to meet the demands of labor-intensive industry.
With lower wages relative to developing and developed countries, China attracted investment from processing-oriented companies and set about transforming itself into the world’s factory.
The Chinese economy has experienced near-double-digit growth for the past 30 years because of its population of 1.3 billion people, which means that even though GDP per capita is quite low, the national figure is astronomical.
In the past, people often preferred to focus on headline totals rather than probe the huge disparity in per capita figures. This is the truth behind the myth of China’s economy.
More importantly, China is an authoritarian state and a majority of its citizens have not shared in the fruits of economic development.
The benefits are concentrated in the hands of the ruling class, which uses this huge resource to influence international politics and economics. To maintain economic growth and political control, Chinese leaders have started to exclude foreign companies while promoting local business.
In other words, after foreign businesses have helped develop the Chinese economy, Beijing is now burning its bridges with them to ensure local enterprises pocket all the economic benefits.
China has also implemented a strict monitoring system to eliminate all calls for human rights and democracy. To achieve this, it strictly monitors the flow of information, which undermines the freedom and transparency necessary for the efficient circulation of information.
Google and Yahoo are two good examples of this phenomenon.
Beijing instructed both companies to hand over personal data on human rights activists and even launched hacker attacks against them. To safeguard its business philosophy and democratic values, Google is now withdrawing from the Chinese market.
Despite the international media coverage it has attracted, China’s unreasonable demands and interference in the operations of Google are insignificant when contrasted with the negative impact created in Taiwan by Beijing’s sugarcoated but ill-intended economic dealings.
Once China establishes an economic foothold in Taiwan, it will be used to either co-opt or divide the public.
In future, it is inevitable that some local enterprises will do exactly what Beijing says to safeguard their commercial interests, while others will second-guess the Chinese leadership.
This will give China direct control over the domestic political situation in Taiwan. In other words, the strong pro-China leanings of the current government and the way it is blindly paving the way for Chinese capital will allow China to put political pressure on Taiwan through economic means.
The disputes between Google, other foreign enterprises and China are of a purely commercial nature, while the exchanges between Taiwan and China involve the lives and property of 23 million Taiwanese.
Today, Google and some other foreign companies have realized that China is not the promised land of sustainable development they believed it was; rather, it can be quite an unpredictable — and even dangerous — place.
In the face of these developments, the Ma administration has stayed the course on its pro-China policies and is ignoring the wishes of Taiwanese as it inches towards the precipice.
Despite its claim to have access to an endless number of talented people, many of whom are academics and experts, the Taiwanese government falls far short of Google in its vision, scale, boldness, and insistence on democracy and freedom.
In the current situation, the Taiwanese public’s only recourse is a national referendum to stop this disaster in the making.
TRANSLATED BY EDDY CHANG
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