The Financial Supervisory Commission’s rejection last week of a bid by a Hong Kong consortium to acquire Nan Shan Life Insurance Co was a welcome development because it demonstrated the government can, when it wants, protect the interests of Taiwanese.
Commendable though the decision was, however, the outcome was far from certain. The commission’s examination of the bid, spearheaded by China Strategic Holdings and Primus Financial Holdings, took several months and a final decision was delayed a number of times.
Admittedly, the case was a major one, as it affected about 4 million policyholders, 4,000 employees and more than 34,000 insurance agents. Questions surrounding the bidder’s ability to ensure operational continuity at Nan Shan, coupled with uncertainties about the nationality and political connections of the ever-shifting shareholders and board members in the consortium, made the bid an altogether problematic one. Over the months, the many reports prepared by Democratic Progressive Party Legislator Pan Men-an’s (潘孟安) office on the matter were helpful in highlighting the scope of the problem.
Celebrations among those who opposed the deal could be short-lived, however, as the Economic Cooperation Framework Agreement (ECFA), which is set to come into force imminently, will usher in a new era of cross-strait investment. The combination of China’s substantial investment power, Beijing’s long-term political objectives via investment in Taiwan, and President Ma Ying-jeou (馬英九) administration’s hankering for foreign investment, could present the commission with an insurmountable challenge simply by virtue of the workload it may face.
In other words, even with the best intentions in the world, the commission’s finite resources could be overwhelmed by a sudden bombardment of Chinese investment bids, some of which could be equally, if not more, problematic than the one involving Nan Shan, especially after Taiwan opens more, and increasingly sensitive, sectors to Chinese investment.
It is no secret that under Chinese President Hu Jintao (胡錦濤) many “private” Chinese companies have either been renationalized, become dependent on loans by state-owned banks or have their board of directors controlled by former or current Chinese Communist Party officials loyal to the party. It is also well known that tracing a Chinese firm’s money to its source or determining who the real decision-makers are, is a daunting task requiring tremendous amounts of effort and time.
The combination of these two phenomena — an upsurge in Chinese investment bids in a number of sectors and the lack of transparency in the Chinese corporate system — could make it impossible for the commission or other regulatory bodies to handle future cases with the same level of professionalism it did throughout the Nan Shan case.
Added to the political pressure from an administration that gets high on good relations with Beijing, the commission could in certain cases be forced to cut corners or, for political considerations, look the other way. Intelligence agencies preparing threat assessment face this dilemma on a daily basis, where finite resources must tell signal from noise and consciously de-prioritize some information. In many instances, mere fatigue amid a constant barrage of threat information makes it possible for important information to slip through the cracks, sometimes with catastrophic outcomes.
There is a very high likelihood, therefore, that some Chinese investments that endanger national security, just as the one for Nan Shan did, will nevertheless be allowed — not because nothing untoward was found or because the threats were not apparent, but because regulatory authorities were overwhelmed.
Taiwan may have won this battle, but this war by other means is far from over.
A gap appears to be emerging between Washington’s foreign policy elites and the broader American public on how the United States should respond to China’s rise. From my vantage working at a think tank in Washington, DC, and through regular travel around the United States, I increasingly experience two distinct discussions. This divergence — between America’s elite hawkishness and public caution — may become one of the least appreciated and most consequential external factors influencing Taiwan’s security environment in the years ahead. Within the American policy community, the dominant view of China has grown unmistakably tough. Many members of Congress, as
The Hong Kong government on Monday gazetted sweeping amendments to the implementation rules of Article 43 of its National Security Law. There was no legislative debate, no public consultation and no transition period. By the time the ink dried on the gazette, the new powers were already in force. This move effectively bypassed Hong Kong’s Legislative Council. The rules were enacted by the Hong Kong chief executive, in conjunction with the Committee for Safeguarding National Security — a body shielded from judicial review and accountable only to Beijing. What is presented as “procedural refinement” is, in substance, a shift away from
The shifting geopolitical tectonic plates of this year have placed Beijing in a profound strategic dilemma. As Chinese President Xi Jinping (習近平) prepares for a high-stakes summit with US President Donald Trump, the traditional power dynamics of the China-Japan-US triangle have been destabilized by the diplomatic success of Japanese Prime Minister Sanae Takaichi in Washington. For the Chinese leadership, the anxiety is two-fold: There is a visceral fear of being encircled by a hardened security alliance, and a secondary risk of being left in a vulnerable position by a transactional deal between Washington and Tokyo that might inadvertently empower Japan
After declaring Iran’s military “gone,” US President Donald Trump appealed to the UK, France, Japan and South Korea — as well as China, Iran’s strategic partner — to send minesweepers and naval forces to reopen the Strait of Hormuz. When allies balked, the request turned into a warning: NATO would face “a very bad” future if it refused. The prevailing wisdom is that Trump faces a credibility problem: having spent years insulting allies, he finds they would not rally when he needs them. That is true, but superficial, as though a structural collapse could be caused by wounded feelings. Something
RSS