As Taiwan and China engage in the second round of negotiations on a proposed economic cooperation framework agreement (ECFA), it might be worthwhile to look at the long-term consequences of increasing Chinese investment in Taiwan.
Earlier this week, this paper referred to a recent report about possible People’s Republic of China (PRC) funding and involvement in the consortium of Hong Kong-based firms that has sought to acquire Nan Shan Financial Life Insurance Co. Earlier this month, financial regulators said they still had more than 40 unanswered questions about the application by one of the principal investors, China Strategic.
Nan Shan is the nation’s second-largest life insurer, with more than 4 million customers. If the Investment Commission approved the acquisition, this would be the largest takeover of a local financial group by foreign buyers in the nation’s history, which explains why regulators and the media have paid special attention to the case. However, Nan Shan is only one among many Taiwanese corporations from numerous sectors that are — or soon will be — coveted by Chinese and/or Hong Kong-based investors.
In the immediate term, attempted investments are already proving problematic. Nan Shan is one example; China Mobile’s attempt to acquire part of Far EasTone Telecommunications Co is another. What hasn’t been explored, however, are the long-term consequences of those acquisitions, even if, in the eyes of financial regulators, the investments are legal. Deals that involve murky and ill-defined consortiums, such as the one for Nan Shan, are especially troublesome. The reason for this stems from the fact that cross-strait investment — and by extension an ECFA — are all based on vague assurances by Beijing that, in the short term, may actually be implemented.
But what happens five, 10 years down the road after those companies have been acquired? What would Taiwan do if, say, the Hong Kong investors involved in the Nan Shan bid were exposed as having been controlled and financed by the PRC, or if Chinese firms, or the government, suddenly took over those Hong Kong investors? It is difficult to imagine that Nan Shan, or Taiwanese authorities, would decide to annul the investment, and next thing you know, Nan Shan would be controlled by Chinese investors and the personal information of more than 4 million Taiwanese made available to Chinese authorities.
What we must bear in mind is that despite laws that limit the share that Chinese investors can own in the Taiwanese financial sector — which prompted Chinese firms to turn to Hong Kong as an investment springboard — it will be next to impossible to ensure that the shareholder structure of those investing firms does not change in China’s favor at some point. In other words, the Chinese government could be using legitimate Hong Kong investors as Trojan Horses — legitimate on paper, but used as a means to an end — to penetrate the Taiwanese market.
Ironically, it is Hong Kong that provides the clearest warning to Taiwanese. In the years prior to handover in 1997, Beijing made a number of vague promises that the rights and welfare of the people of Hong Kong would be preserved. As Hong Kong academic and former legislator Christine Loh (陸恭蕙) wrote recently in her history of the Chinese Communist Party (CCP) in Hong Kong, however, the devil is in the details. Little by little, the people in the special administrative region found that those vague promises foundered on the shores of the core interests of the CCP. Universal suffrage was delayed time and again. Harsh security laws were implemented. Certain liberties were curtailed — all in the name of Beijing’s core interests: stability and one-party rule.
If Taiwanese are not careful, it could happen here.
US aerospace company Boeing Co has in recent years been involved in numerous safety incidents, including crashes of its 737 Max airliners, which have caused widespread concern about the company’s safety record. It has recently come to light that titanium jet engine parts used by Boeing and its European competitor Airbus SE were sold with falsified documentation. The source of the titanium used in these parts has been traced back to an unknown Chinese company. It is clear that China is trying to sneak questionable titanium materials into the supply chain and use any ensuing problems as an opportunity to
It’s not every month that the US Department of State sends two deputy assistant secretary-level officials to Taiwan, together. Its rarer still that such senior State Department policy officers, once on the ground in Taipei, make a point of huddling with fellow diplomats from “like-minded” NATO, ANZUS and Japanese governments to coordinate their multilateral Taiwan policies. The State Department issued a press release on June 22 admitting that the two American “representatives” had “hosted consultations in Taipei” with their counterparts from the “Taiwan Ministry of Foreign Affairs.” The consultations were blandly dubbed the “US-Taiwan Working Group on International Organizations.” The State
The Chinese Supreme People’s Court and other government agencies released new legal guidelines criminalizing “Taiwan independence diehard separatists.” While mostly symbolic — the People’s Republic of China (PRC) has never had jurisdiction over Taiwan — Tamkang University Graduate Institute of China Studies associate professor Chang Wu-ueh (張五岳), an expert on cross-strait relations, said: “They aim to explain domestically how they are countering ‘Taiwan independence,’ they aim to declare internationally their claimed jurisdiction over Taiwan and they aim to deter Taiwanese.” Analysts do not know for sure why Beijing is propagating these guidelines now. Under Chinese President Xi Jinping (習近平), deciphering the
Many local news media last week reported that COVID-19 is back, citing doctors’ observations and the Centers for Disease Control’s (CDC) statistics. The CDC said that cases would peak this month and urged people to take preventive measures. Although COVID-19 has never been eliminated, it has become more manageable, and restrictions were dropped, enabling people to return to their normal way of life due to decreasing hospitalizations and deaths. In Taiwan, mandatory reporting of confirmed cases and home isolation ended in March last year, while the mask mandate at hospitals and healthcare facilities stopped in May. However, the CDC last week said the number