Analysts upbeat about summit

DIPLOMACY: The meeting with Latin American allies reaffirmed valuable ties and the trade pact with Panama will give long-term economic benefits, observers said

By Chang Yun-ping

STAFF REPORTER

“Taiwan has changed its past zero-sum diplomatic strategy to a more realistic approach.”－Hsiao Bi-khim, lawmaker

This week's summit with representatives of Taiwan's Central American and Caribbean diplomatic allies has significant and substantial meaning for the nation's standing in the world as well as the economic development of Central America, one of the world's burgeoning economic and trade zones, analysts said yesterday.

The Fourth Summit of the Heads of States and Governments of Taiwan, Central America and the Dominican Republic was held on Thursday, with Taiwan also signing its first free-trade agreement, with Panama.

Eight representatives from Taiwan's Central American and Caribbean allies, including Panama, El Salvador, Guatemala, Nicaragua, Costa Rica, Honduras, Belize and the Dominican Republic, attended the one-day summit held at the Grand Hyatt Hotel Taipei.

Lo Chih-cheng, chief executive officer of the Institute for National Policy Research, said that the summit was significant in that it was the first time that Taiwan has hosted an international leaders' summit.

"Though a leaders' summit is a normal event for national leaders in international society, it is particularly special to Taiwan in that this summit is the only high-profile multinational meeting that Taiwan initiates and participates in regularly under the title of the Republic of China," Lo said.

Lo said the summit also helped consolidate and upgrade Taiwan's diplomatic ties with its allies in Latin America.

"Taiwan's Central American and Caribbean diplomatic allies have always been solid supporters of Taiwan's bids to join international organizations such as the UN and the World Health Organization. It is even more important for Taiwan to consolidate relations with these allies for the benefit of its future international participation," Lo said.

Lo said that the free-trade agreement with Panama could give Taiwan a foot in the door to the US market.

"Now many Central American and South American countries are trying to sign bilateral free-trade agreements with the US, and that would be a stepping stone for Taiwan to expand economic relations with other Latin American and North American nations.

"When the North American Free Trade Agreement (NAFTA) gradually expands to Central and South America, Taiwan can also indirectly benefit from it as we will be connected to the entire American market," Lo said.

A communique issued at the end of the summit called for Taiwan to be admitted to the System for Integration in Central America (SICA).

President Chen Shui-bian also stated in the summit that the signing of the trade pact with Panama brought Taiwan closer to the entire American economic and trade region, which is slated to establish a Free-Trade Agreement of the Americas in 2005.

Despite the diplomatic and economic achievements of the summit, doubts remained over Panama's diplomatic ties with Taiwan.

The Panamanian vice president is visiting Beijing with a group of economic and trade delegates.

Lawmaker Hsiao Bi-khim yesterday said the summit symbolized the firm diplomatic relations Taiwan has with Panama and that Taiwan actually wouldn't mind if its official allies built economic relations with China.

"Taiwan has changed its past zero-sum diplomatic strategy to a more realistic approach that as long as our diplomatic allies maintain official recognition of Taiwan, we wouldn't mind if they build economic relations with China if necessary. It's a double-track strategy; we want us and our allies to be in a win-win situation," Hsiao said.

Lo said that more countries are recognizing that China is not a trustworthy partner in realizing its promises and now see Taiwan as a stable and long-term partner in bilateral cooperation.

Chen's foreign policy successes

The fourth Republic of China-Central America Summit was held Thursday, with a sideline ceremony for the signing of Taiwan's first free-trade agreement, with Panama. President Chen Shui-bian's efforts to improve the nation's foreign relations and to lead it out of isolation appear to be working.

In contrast with the challenges Chen has faced in the domestic arena, he has shown impressive progress in foreign affairs. He has made three overseas visits and declared his determination to uphold commitments made by his predecessors to Taipei's allies. Not only were foreign ties stengthened, but during transit stops in the US, Chen also made public appearances and met with prominent political figures, helping to solidify US-Taiwan relations.

Even more importantly, through his overseas visits and large-scale diplomatic campaigns, Chen has pressured the bureaucrats in the Ministry of Foreign Affairs and the nation's embassies to take a more proactive approach to relations with other countries. On his trips Chen has been able to see for himself the fruits of the country's foreign-aid projects as well as gaining an understanding of where mistakes have been made.

In order to maintain foreign ties in the face of Beijing's obstructionism, Taiwan often offers financial aid to its allies. Even though this practice has been condemned by lawmakers as "dollar diplomacy," the efforts to help allies in South and Central America, and Africa develop agricultural industries and improve infrastructure have had a positive impact. These efforts also supplement the campaign by developed democracies to stabilize international order. As Vice President Annette Lu has said, without Taiwan's hard work, South and Central America might have been swept away long ago by communism.

On the other hand, the government cannot continue to provide money, equipment and technological resources without paying attention to how these are used. Many developing countries are not sufficiently democratized and foreign-aid money ends up lining the pockets of a handful of politicians. Naturally, the opposition parties and democratic reformers in these countries will blame the governments that provided the funds.

Chen has been gradually changing all this. The government now relies less on individual aid packages and more on strengthening interactions on a collective basis. The goal is for Taiwan to eventually become a member of these collectives, furthering its links with international economic organizations in the future. The government is also trying to ensure that all foreign aid projects are transparent, to reduce the risk of criticism both at home and abroad. It is also encouraging the private sector, along with overseas Taiwanese, to assist the nation's diplomatic personnel in their work.

Day Sheng-tung, chairman of the National Association of Small & Medium Enterprises, has said that Taiwan's traditional industries could very well relocate to South and Central America. Not only would they expand their market in that region, but they would also create employment opportunities locally. Although many of our African allies have experienced internal unrest, through the preferential export trade treatment these countries enjoy from the US and EU, Taiwanese businesses have much to gain from investing there.

Former president Lee Teng-hui was the first to push for pragmatic diplomacy, putting much hard work into expanding the nation's international space. Chen has continued Lee's efforts, despite Beijing's pressure and boycotts. These efforts are a reflection of the nation's democratic achievements and its desire to play a more active role in the international community.

People fear rush to links: poll

GO SLOW, BE PATIENT: A survey released by the Mainland Affairs Council says that many people are not comfortable with the hasty move toward direct links with China

By Roger Liu

STAFF REPORTER

More than half the population thinks that Taiwan should not rush to implement direct transportation links and are worried about closer ties with China, according to a poll by the Mainland Affairs Council (MAC) yesterday.

According to the survey, 52 percent of the 1,149 respondents said that the government should slow its pace on launching direct transportation links, which are regarded as the catalyst and prelude to the "three links" and overall normalization of cross-strait relations.

Only 28 percent of respondents said the government should realize direct transportation links "as soon as possible."

"The results are similar to other polls that have been conducted by different institutions, including major local newspapers, since January this year," said Jan Jyh-horng, director of the council's planning department.

President Chen Shui-bian announced earlier this month that he would make it possible to realize direct transportation links by the end of 2004, if he wins the coming presidential election.

Those in favor of such a move -- including several newspapers -- say that direct transportation links would facilitate cross-strait relations and make more China-invested local enterprises choose to stay in Taiwan.

But according to the assessment by the MAC published just after Chen's announcement, better cross-strait transportation would not -- contrary to policy planners' earlier predictions -- make entrepreneurs choose to stay in Taiwan rather than rushing to invest in China

"Our assessment shows that the policy would not offer more incentives for Taiwan entrepreneurs to stay in Taiwan and trade with China instead of directly invest there, as we predicted previously," said Fu Don-cheng, director of the MAC's economic affairs department.

"And according to the poll results, a lot of people worry about the influence that direct transportation links would have on Taiwan's national security and economic development," Jan said.

The poll also shows people in Taiwan feel increasingly hostile toward the Chinese government: 70.9 percent of respondents said Beijing is "not friendly" toward Taiwan's government, and 50.7 percent of respondents said that the communist regime is "not friendly" toward people in Taiwan.

The spread of the SARS epidemic from China and the rude attitude Beijing showed while blocking Taiwan's participation in the World Health Assembly (WHA) contributed greatly to people's ill feeling toward China, Jan said.

"People think that Taiwan becoming an observer in the WHA is their right and that it is a health issue, not a diplomatic tactic or something," Jan said.

"But Beijing never notices this. They should know what they have done has increased the abhorrence that people here have of them," Jan added.

Slightly less than one third of respondents, or 32.3 percent, said that it's more important to have better relations with other nations than to improve this country's relations with China.

If better diplomatic relations with other countries would increase tensions with China, 61.7 percent of the people answered that they would still put those diplomatic relations ahead of the cross-strait relationship.

Pro-Beijing HK leader backs off

UNUSUAL SUPPORT: The SAR's richest man, Li Ka-shing, said Hong Kong should be proud of the 500,000-strong July 1 march against the controversial anti-subversion bill

AP , HONG KONG

The leader of the largest pro-Beijing political party in Hong Kong has urged the territory to further delay a hugely unpopular anti-subversion bill until after elections next year, backpedalling from his earlier calls to speed up the legislation.

Analysts said yesterday that Jasper Tsang's sudden change of heart was prompted by fears that his party may lose votes to the pro-democracy camp, which gained popularity after massive protests against the legislation last month.

Tsang, head of the Democratic Alliance for the Betterment of Hong Kong, had previously insisted that the measure, which would outlaw treason, sedition and subversion, be passed as scheduled last month.

Critics say the law undermines freedoms of speech, press and assembly, and the government was forced to delay the bill as it failed to garner enough legislative support after half a million people marched in protest of it on July 1.

The march threw the government into crisis, and two key Cabinet ministers later resigned, including the security secretary who spearheaded the drive to pass the bill.

In a signed commentary of the Chinese-language daily Ming Pao on Thursday, Tsang argued that lawmakers won't have enough time to review the bill before the Legislative Council's term ends next year.

Tsang's party is pro-China and typically supports Hong Kong's government on legislative matters. It was not clear whether his comments would sway the administration.

Political commentators noted Tsang switched his stance ahead of district council elections in November and the legislative council polls next August or September. His party already suffered a drop in popularity because of its aggressive push for the security bill.

"Both Beijing and its allies here would not want to see a Legislative Council dominated by pro-democracy lawmakers," said political scientist Li Pang-kwong of Lingnan University.

"It will have tremendous impact on the whole political landscape," Li said.

The government has not set a new timetable for the legislation -- constitutionally required since Hong Kong reverted from British to Chinese rule in 1997 -- but a new draft of the law will be unveiled next month.

Meanwhile, Tycoon Li Ka-shing has said Hong Kong should be proud of the July 1 rally by half a million people, which was called to protest against a move to pass controversial anti-subversion laws.

Li, Asia's richest man, told local media after announcing the interim results of his flagship firms Cheung Kong and Hutchison Whampoa late Thursday, that he was impressed by the size of the march.

"My feeling [about the march] is very good," he said, noting that it was carried out in "good order."

"There should be more opinions. And in modern society, we should be listening to each other's opinions," Li said.

Hong Kong's threat to China's rulers

By Shaw Sin-ming

`Tung's anticipatory subservience to the real or imagined wishes of China's rulers exposed the congenital flaw in the political architecture of uniting a liberal society with a dictatorship. That flaw infects the heart of the "one country, two systems" notion: the idea that genuine autonomy can exist in a country whose supreme leaders do not believe in rule by consent.'

Last month's massive demonstrations in Hong Kong, when over half a million residents poured into the streets in protest against the government of Chief Execu-tive Tung Chee-hwa, continues to echo. Never in Hong Kong's history has popular opposition -- uniting investment bankers, street hawkers, off-duty civil servants and artists, among others -- been so loud. China's communist rulers are dithering about how to respond.

One objective of the demonstrators was to voice their desire to select Hong Kong's future leaders through universal suffrage. Today, 800 electors handpicked by the Chinese government -- who mostly represent big business -- choose Hong Kong's chief executive.

The unpopularity of Hong Kong's incompetent and sycophantic chief executive, chosen by China for a second five-year term that will only end in 2007, creates a grave dilemma for Beijing's rulers. Before last month's protests, they hoped that Hong Kong would provide so attractive an example of the idea of "one country, two systems" that Taiwan would be lured into accepting the sovereignty of the government in Beijing. Now Taiwan's leaders point to Hong Kong as a failed model of a flawed concept.

Indeed, Tung's anticipatory subservience to the real or imagined wishes of China's rulers exposed the congenital flaw in the political architecture of uniting a liberal society with a dictatorship. That flaw infects the heart of the "one country, two systems" notion: the idea that genuine autonomy can exist in a country whose supreme leaders do not believe in rule by consent.

Now China's rulers find themselves trapped in a bind. If they back Tung unconditionally for the rest of his term, they can look forward to the collapse of their long-term strategy to reabsorb Taiwan, for the alternative to peaceful unification with Taiwan is coercion.

But any resort to coercion increases the likelihood of military confrontation with the US, Taiwan's protector. In this context, the steady build-up of China's short to medium-range missile capability is a cause for alarm, such missiles being the principle threat against Taiwan. As the US Defense Department's Annual Report on the Military Power of the People's Republic of China recently put it, "The primary driving force for China's military modernization is Beijing's perceived need to prepare credible military options in any potential conflict in the Taiwan Strait."

Such a nightmare scenario isn't at all likely in Hong Kong, but a steady rot of Hong Kong's vitality is. For if the frustrations of ordinary Hong Kong citizens are allowed to fester without a genuine commitment by China to allow for universal suffrage by 2007, a far more serious eruption of social and political unrest beckons.

Such frustrations are growing. Unemployment now stands at 9 percent -- unimaginable before the handover in 1997, when both Tung and China promised that Hong Kong would do even better under Chinese sovereignty than under British rule. In fact, many observers believe that Hong Kong's real rate of joblessness is much higher, and fear that the trend is not encouraging.

China's leaders, and their handpicked servants in Hong Kong may still believe that Tung's popularity will revive if and when the economy does. So they comfort themselves with the thought that demands for democratization reflect Hong Kong's economic woes, nothing more.

But six years of divisive as well as dismissively haughty misrule by Tung's administration, which pits one group against another as its preferred method of governance, suggest that Hong Kong's problems are much deeper. Hong Kong is now an acrimoniously divided society harking back to the days when Chinese communists routinely classified their own citizens as either "the people" or "enemies of the state."

Most people in Hong Kong now recognize that their stagnating economy is not merely a matter of bad policy. It also results from deeply flawed political structures. In an oligarchic economy such as that of today's Hong Kong, the costs of stagnation and the fruits of growth are distributed in grossly unfair ways. This cynical structure must be changed if people are to have enough confidence in the future for the economy to recover.

If China's rulers heed the wishes of Hong Kong's 7 million people to have the right to elect their own leaders through direct elections, however, they face the prospect that China's 1.3 billion people will demand the same right. Perhaps so. But a political system is only ever truly put at risk when leaders consistently misrule.

Indeed, democracies are so stable because they allow misrule to be ended through regularly scheduled elections. Because stability is their great goal, China's communist rulers, if they are wise, will allow Hong Kong to show the way to a system in which Chinese govern themselves democratically, peacefully and prosperously. Taiwan has already done so. Hong Kong provides a more intimate case study for China's people to watch and one day follow.

But if the goal is merely for the communists to retain their mono-poly on power, in both Hong Kong and China, then the rot that has settled into Hong Kong's polity and its economy may begin to infect the mainland. At that point, China might wish it had never heard of Tung. Indeed, it might wish it had never secured Hong Kong's return.

Shaw Sin-ming was a leading Hong Kong investment fund manager. He is now a resident scholar at Oriel College, Oxford University.