CEPA no cure-all for economic challenges

By Huang Tien-lin

Monday, Nov 24, 2003,Page 8

Li Qiang, an official from China's Ministry of Commerce, has revealed that Beijing wants to sign a pact with Taiwan similar to the Closer Economic Partnership Arrangement (CEPA) it signed with Hong Kong and Macau earlier this year.

To no one's surprise, the Chinese Nationalist Party (KMT) welcomed the offer in no time and indicated that promoting cross-strait economic cooperation and establishing a cross-strait common market are critical economic issues for the KMT-People First Party (PFP) alliance. Such a blatant response shows how like-minded the KMT and the Chinese Communist Party (CCP) are.

China stressed that a cross-strait CEPA must follow the economic model built between Beijing and Hong Kong, suggesting that direct links be opened beforehand. Obviously, what Beijing really wanted was opening direct links under the "one China" framework. Opening direct links is also the main pursuit of the KMT and the pan-blue camp. So on the issue of direct links, the positions of the CCP and the KMT-PFP alliance easily with each.

Is the CEPA a cure-all for Taiwan's economy? The pact in fact is a kind of ecstasy pill, alluring but fatal.

Experience tells us that economic integration only works between economies that have close per capita incomes and production prices. If there is a large gap in their per capita incomes and the lower-income economy is far bigger than the higher-income one (the size of an economy is usually determined by the size of population and land), then the smaller economy will be diluted by the big one.

The rate of dilution depends on the pace of the economic integration. The faster the integration is, the faster the small economy will be diluted.

A recent example is Hong Kong after 1997. Since its return to Chinese rule, the territory has witnessed economic recession, unemployment and a slump in housing prices. The CEPA was an emergency remedy offered by Beijing to prevent Hong Kong's economy from being diluted. It may have a short-term effect on Hong Kong's already hollowed-out economy, but its long-term effect is yet to be seen.

What happened to Hong Kong after 1997 will happen to Taiwan if we sign a CEPA with China. So do we want to repeat Hong Kong's mistakes?

Fortunately, our Mainland Affairs Council officials have made it clear that the CEPA is a product of Beijing's "one China, two systems" formula. Hopefully, our sober government officials can insist on this point and bear in mind that we are one country on each side of the Strait.

Economic independence is our last line of defense, and it must not be compromised by pressure imposed by interest groups. Similarly, the public must not be intimidated by the pro-unification media but open their eyes to see through China's tricks.

We should use public opinion and our votes to force the KMT and the pan-blue alliance to abandon their policy of promoting a "Chinese Economic Community." Establishing either direct links or an economic community is good only for conglomerates and China, but bad for the unemployed and those who make Taiwan their home.

Because Taiwan is an island situated in the Pacific Ocean, that's where the nation's future lies. Around the Pacific rim are the US, Japan and our long-term Latin American allies. With the help of these countries in technology and capital, our economy can avoid being diluted.

Therefore, there is no way that Taiwan will become isolated. Let's bravely say "no" to the CEPA as well as to the idea of a "Chinese Community."

Huang Tien-lin is a national policy adviser to the president.

The joke is on us

If the US were not a democratic country, TV talk show hosts Jay Leno and David Letterman would have been persecuted when they ridiculed former US president Bill Clinton about the womanizing rumors during his impeachment trial.

Their counterparts in Taiwan are not so lucky.

The creators of the Special Report VCDs produced a series of satirical programs to ridicule Taiwan's politicians who are generally considered as the source of Taiwan's chaos.

If they could be sued for defamation, then producers of political comic strips could also be sued for their expression.

It is a pity that Taiwan's courts summoned those actors and producers for an inquiry. It was an obvious political stunt. People should be entitled to freedom of expression, of opinions with factual support, just like political columnists and cartoonists. This should be common sense.

Now the pan-blue media, with assistance from the court and its political allies, are ganging up to destroy freedom of expression and to persecute the young people connected to the VCDs. All the people of Taiwan have a duty to speak out to deter the lunacy committed by the pan-blue camp.

One would doubt Taiwan's fame for vibrant democracy if the blue camp and its media continue to censor Special Report and persecute its actors and producers. This reminds people of the era of Martial Law that the Chinese Nationalist Party (KMT) imposed on Taiwan. Should Taiwanese remain silent on this issue, there will be no justice for Taiwan's society and the ghost of Martial Law will come creeping back.

Yang Ji-charng

Columbus, Ohio

Stand up, Taiwan

John Rieder's letter (Nov. 22, page 8) contains good advice to act on. Taiwan has to clarify its own identity before international friends can extend a helping hand.

Taiwan is in an identity crisis. Many people in Taiwan cannot answer these simple questions either. Under the control of the ROC and the threat of the PRC, they do not know whether Taiwan is a country or a province, or whether they are Taiwanese or Chinese.

The ROC was replaced by the PRC in 1949 but Chinese Nationalists in Taiwan are still daydreaming and claiming that "one China" is the ROC.

They lost the presidential election in 2000 but they do not want to accept this unprecedented people's choice. Their unreal attitudes have created nightmares in identity, stability and security in Taiwan.

Ancient China built the Great Wall thousands of miles long to keep the enemy out. The PRC nowadays deploys hundreds of missiles in an attempt to keep Taiwan in.

China seems to forget that force cannot win one's heart and that democracy and communism are incompatible.

Taiwan has to stand up and walk out to join the world.

Charles Hong

Columbus, Ohio

Editorial: China offers Taiwan no incentive

Before the campaign for the nation's presidential election has even been formally launched, the Chinese government warned Taiwan and the US; although it would have been wise to restrain itself from getting involved in Taiwan's elections so as not to repeat its mistakes from 1996 and 2000 when it campaigned against candidates it disliked. Beijing's leaders seem to lack wisdom and tolerance.

Faced with Taiwan's call for referendum legislation and a new constitution, Chinese Premier Wen Jiabao warned in an interview with the Washington Post that "the Chinese people will pay any price to safeguard the unity of the motherland."

Wen tried to intensify his intimidation by saying "We completely understand the desire of the Taiwan compatriots for democracy and a peaceful environment. However, when the leadership of the Taiwan authorities wants to separate Taiwan from Chinese territory, no Chinese will agree."

So far, Wen is the highest-ranking Chinese official to declare Beijing's formal stance on Taiwan's referendum legislation. It is generally believed that Wen's upcoming trip to the US, scheduled to begin on Dec. 7, is aimed at urging the US to suppress Taiwan's recent move toward independence.

Since China has never implemented democracy on its soil, Wen's understanding of it is poor. Holding referendums and writing a constitution are only two ways for Taiwanese people to exercise their political rights. They are not necessarily equal to Taiwan independence.

Furthermore, Chinese leaders don't understand what Taiwanese people want. It's China that is pushing Taiwan toward independence. In the history of interaction between the two sides, Taiwanese people have few happy memories. The leadership in Beijing must ask itself: Has China ever offered any effective incentives for promoting unification?

China has long attempted to oppress and suffocate Taiwan's diplomatic activities. The regime never ceases its efforts to intimidate Taiwan either through propaganda or military force. During the epidemic of Severe Acute Respiratory Syndrome (SARS), Beijing did not cooperate with Taiwan and concealed the reality of the SARS situation in China. When Taiwan needed a helping hand from the World Health Organization, China not only obstructed the process but also said "Who cares about you [Taiwanese]?"

Even in the economic arena, China spares no effort to lower Taiwan's status. To Taiwan's proposal to initiate the small three links, China said no. When Taiwan pushed for direct freight links, China refused to talk. Even those hundreds of thousands of China-based Taiwanese businesspeople, who function as a driving force behind China's bright economic performance, are in the eyes of the Chinese government and people are just cash cows to be milked.

Suppose that a man, upon breaking up with his wife, threatens her by saying "If you divorce me, I'm going to kill you." Most likely, the woman would divorce him and run as far away as she could. The same principle applies to cross-strait relations. If China mistakenly thinks that imposing pressure on the relationship can bring about reunion, the result may turn out to be just the opposite.

China does not need to "pay any price" to prevent Taiwan from moving toward independence. All it needs to do is change its attitudes and respect Taiwan's current status as an independent and sovereign entity. Let Taiwan have freedom. Take away the walls and the missiles across the Strait. Let people freely engage across the Strait and discover each other's merits and their common interests. Then there may be a chance to start the relationship anew.

Let bygones be bygones. After the two sides start to treat each other equally, perhaps they will reunite. Even if they don't, they would know each other well enough that the breakup wouldn't seem too bad.

No cross-strait crisis at present: Tsai

CHINESE RHETORIC: The Mainland Affairs Council chief said that Beijing should stop speculating about what Taipei might mean and reopen negotiations instead

By Melody Chen

STAFF REPORTER

Tuesday, Nov 25, 2003,Page 3

"I do not define the current cross-strait condition as a crisis. The situation cannot be judged simply according to an individual's remarks."

－Tsai Ing-wen, Mainland Affairs Council chairwoman

Despite China's escalating verbal attacks on what it calls Taiwanese leaders' separatist attempts and threats to use military force, Main-land Affairs Council Chair-woman Tsai Ing-wen said yesterday that she would not define the current cross-strait condition as "a crisis."

Chinese Premier Wen Jiabao launched the latest salvo in an interview with The Washington Post, during which he declared the Chinese people will "pay any price" to safeguard China's unity.

Wen's rhetoric prompted opposition legislators to question Tsai during a budgetary session about how dangerous the cross-strait situation is.

"I do not define the current cross-strait condition as a crisis. The situation cannot be judged simply according to an individual's remarks," Tsai said.

But she acknowledged the situation requires close observation and communication with China.

Chinese Nationalist Party (KMT) Legislator Cho Po-yuan asked Tsai whether President Chen Shui-bian's proposals to write a new constitution and implement referendums have the potential to "bilaterally change the cross-strait status quo."

In his Post interview, Wen cited both issues as evidence of the government's "stepped-up efforts at Taiwan independence."

Tsai, however, described Chen's proposals as part of the government's pursuit of a sounder democracy.

Opposition lawmakers demanded Tsai take steps to prevent the possible use of force across the Strait triggered by China's misunderstanding of the two issues.

In response, Tsai urged Beijing to reopen talks with Taipei.

She asked China to stop "sitting at home and speculating" about Taiwan's motives and invited Bei-jing to communicate with Taipei.

The substance and procedures of Chen's proposed constitutional reform "do not directly touch upon cross-strait problems," Tsai said.

"I am very willing to go to China for talks if they would grant me entrance," she said.

But she avoided giving a direct answer People First Party (PFP) Legislator Lee Ching-hua's question about whether Chen's referendum and constitutional plans contradict the president's "five noes" promise.

She told Lee he should review the issue by reading the Democratic Progressive Party's (DPP) brochures promoting its constitution and referendum ideas.

Asked whether Chen's constitutional reform plan will pave the way for the country to "rectify" its official title, the council chairwoman said: "The DPP's constitutional plan does not even mention the rectification of the country's official name."

Tsai told the lawmakers that no US officials had asked her about a possible change in Taiwan's official title during her recent visit to Washington to explain Taiwan's cross-strait policies and Chen's proposals.

"The US understands constitution reform and referendums are necessary steps for a nation to take to deepen its democracy," she said.

Tsai also said she had perceived a shift in the KMT's stance toward constitutional reform since she returned from the US.

All the political parties have to take responsibility if the campaign for next year's presidential election disrupts cross-strait stability, Tsai said, not just the DPP.

Tsai said the council will be closely watching Wen's upcoming trip to the US but declined to comment on whether she expects the US' cross-strait policy will change after his visit.

Huge project unveiled to boost growth

STIMULUS: The NT$500bn package will create jobs and revive the economy, the Cabinet says, but it must still get the approval of a skeptical legislature

By Ko Shu-ling

STAFF REPORTER

Tuesday, Nov 25, 2003,Page 1

The government yesterday unveiled its five-year, NT$500 billion public construction package that aims to raise the nation's competitiveness ranking to third in the world, boost economic growth and create jobs.

The package, which includes the construction of artificial lakes and mass rapid transit systems and increased spending on higher education, will conclude with an exposition to coincide with the Beijing Olympics in 2008.

According to a World Economic Forum (WEF) survey of 102 countries, Taiwan ranked fifth in terms of competitiveness, the highest in Asia, up from sixth last year.

The Cabinet is scheduled to approve the project during its weekly closed-door Cabinet meeting tomorrow.

With the implementation of the five-year plan, Premier Yu Shyi-kun said that the government hopes to boost the nation's annual economic growth by an average of 1.03 percentage points and create an average of 64,000 jobs each year.

Responding to the opposition's threat to boycott the project in the legislature, Yu said that he is confident legislation for the project and its budget will be approved.

"I don't mind bowing to opposition lawmakers in exchange for the swift passage of the special bill and budget, although I won't kneel down," Yu said, mocking People First Party (PFP) Chairman James Soong, who recently knelt before Yunlin County Commissioner Chang Jung-wei to apologize for the central government's rejection of a budget request.

Yu also dismissed speculation that the plan is aimed at garnering votes in next March's presidential election.

"We've been working on the project for the past six months, and we hope the legislature will give it the go-ahead by the end of the year so we'll be able to begin the plan in earnest on Jan. 1 next year as planned," Yu said. "The project would still be desperately needed even if there were no election next year."

The Cabinet plans to borrow NT$500 billion in a special budget to exempt it from limits on the amount the government can borrow. The government is also hoping to attract NT$203 billion from the private sector and NT$131.6 billion from local governments that, combined with other sources, would make the project worth more than NT$948 billion.

In response to skepticism over the government's intention to dodge borrowing limits to fund the project, Yu said that borrowing money was not the problem.

"What they should have focused on is whether we have the ability to pay back the loan," Yu said. "It makes perfect sense to me to borrow money now and let our children pay back the money while they're enjoying the fruits of our labor."

Besides, he said, the nation's financial situation was considered "stable" compared with other developed countries.

"While our central and local government debt combined takes up 34 percent of our GDP, that of the UK accounts for 50 percent of its GDP, that of the US 61 percent, Germany 62 percent, Canada 80 percent and Japan 147 percent," he said.

Yu also confirmed media reports that President Chen Shui-bian has expressed his wish to "rely on Yu" if he is re-elected next March.

"The president has voiced his recognition and appreciation of the Cabinet's efforts over the past 21 months and I've relayed the president's words to my colleagues during one of the weekly Cabinet meetings," he said.

"As for the president's comments about myself, I don't think it's appropriate for me to disclose any of the details," he said, referring to speculation that the president had asked him to head the Cabinet once he wins his re-election bid.

The 10 construction package encompass four areas: a NT$212.8 billion sustainable ecology project, which takes up 42 percent of total spending; a NT$107.9 billion international competitiveness project (22 percent); a NT$100.6 billion culture and creativity project (20 percent); and a NT$50 billion research and development project (10 percent). The remaining 6 percent will go toward interest payments.