Beijing was heavily criticized during its SARS outbreak for its reluctance to release information. A Sichuan journalist, quoted by Ming Pao, said Hong Kong reporters were better informed than they were about the pig disease.

Former British colony Hong Kong, which returned to Chinese rule in 1997, isn't subject to China's media controls under a special autonomy arrangement.

Much of the information about the disease has been filtering out through Hong Kong, which is briefed by China about health threats.

Hong Kong is wary about diseases spreading from China, especially after SARS killed 299 people in the territory in 2003 and devastated the economy.

The first cases of the pig-borne disease outbreak appeared in the city of Ziyang and elsewhere in Sichuan. The first case outside the province was reported Saturday in Guangdong, a southern Chinese province neighboring Hong Kong.

Hong Kong has reported 11 cases of the disease since May last year, but it wasn't clear if they were related to the Sichuan outbreak as the people infected hadn't traveled outside Hong Kong, according to the territory's Health Department.

Group calls for Sept. 8 to be designated Taiwan's independence day

By Jewel Huang

STAFF REPORTER

"I think all the people of Taiwan should recognize this reality and come to join our activities to know more about history." － Peter Wang, head of the 908 Taiwan Republic Campaign

A pro-independence group yesterday advocated setting Sept. 8 as the day to commemorate Taiwan's independence, and promoted a campaign to establish the "Republic of Taiwan."

Sept. 8 should be set aside to mark Taiwan's independence since the date recalls Japan's signing of the San Francisco Peace Treaty in 1951, in which it relinquished its claim to Taiwan, the leader of the 908 Taiwan Republic Campaign, Peter Wang, said yesterday.

"And since that day Taiwan has been an independent nation and Taiwan's sovereignty has belonged to all the people of Taiwan," Wang said.

"I think all the people of Taiwan should recognize this reality and come to join our activities to know more about history," he added.

Wang also said that the 908 Taiwan Republic Campaign will continue to promote changing the nation's name as well as adopting a new constitution.

"Hopefully our new Taiwan president in 2008 will announce the scrapping of the Constitution of Republic of China and adopt a new one that fits the Republic of Taiwan," Wang said.

On Sept. 8, a flag-raising ceremony for the "Republic of Taiwan" will be held at Ketagelan Boulevard at 9am and a rally will take place in front of Lungshan Temple at 7pm, according to Wang.

To promote the campaign to establish the "Republic of Taiwan," Wang, as well as other supporters -- mostly women accompanied by their kids -- yesterday handed out campaign leaflets in front of Lungshan Temple to both passersby and visitors, and also invited them to join in the Sept. 8 events.

Meanwhile, Wang also expressed approval of the Presidential Office's decision to change the title of its official Web site, saying that the addition of the word "Taiwan" after the words the "Republic of China" on the site was encouraging.

Wang, however, thought it was not enough.

"I think the Presidential Office should directly change the Web site's title to the "Republic of Taiwan and lead Taiwan to participate in international organizations with that new name," Wang said. "Only by using a clear and adequate official name can Taiwan's national status be properly conveyed and can the dignity of the people of Taiwan in the global village be ensured."

Fear the falling trade surplus

Mimicking other think-tanks, the Taiwan Institute of Economic Research (TIER) last week lowered its gross domestic product (GDP) growth forecast for this year in the wake of sluggish foreign trade, slashing the figure to 3.31 percent from its previous estimate of 4.41 percent given in April.

The TIER said the reduction was mainly due to weaker-than-expected second-quarter performance, when GDP growth slowed to 2.06 percent following a 2.54 percent increase in the first quarter. But the institute said the economy has good momentum heading into the second half of the year, predicting a 4.16 percent growth this quarter and 4.36 percent in the final quarter.

The TIER said a higher growth rate of 3.50 percent remains possible for this year if the government's NT$80 billion flood prevention budget is passed by the legislature and is implemented during the final quarter. Critics, however, argue that the latest GDP forecast just shows how difficult it is for the government to secure the targeted 4 percent growth rate for this year.

The debate over whether the government can achieve the 4 percent target is only meaningful to politicians, as they use the number to blame each other for jeopardizing the nation's economic development. They should be reminded that we don't need the myth of high annual GDP growth -- which usually stood above 8 percent before 1990 -- to build up confidence because the nation's economy has gradually matured in its development course.

But the factors that prompted the lowering of the GDP forecasts should sound alarm bells. The fast-shrinking trade surplus during the first six months through June due to the continued relocation of Taiwanese manufacturers abroad, to China in particular, was the driving force behind the lowered forecasts.

Taiwanese companies have relocated to China faster than most of their Asian competitors because of a shared culture and language. According to government statistics, export orders totalled NT$3.67 trillion in the first half of the year, up 10.86 percent from a year earlier. But the amount of exports clearing customs in the same period increased by a mere 0.63 percent to NT$2.819 trillion, reflecting a growing trend that our manufacturers are taking orders here but producing their goods in China and other countries. Consequently, the nation's trade surplus dropped a whopping 96.19 percent to NT$4.645 billion during the same period.

Obviously, excessive investment in China has made Taiwan overly dependent on its arch rival, so much so that it is now a matter of national security. It is justified, then, that President Chen Shui-bian warned last week that the government will not unconditionally open up its policy that governs Taiwanese investment in China, if a policy of "effective management" cannot be fully implemented.

Fortunately, there are signs that capital inflows from high-tech companies in the Central Taiwan Science Park, mainly due to the emerging liquid-crystal-display panel manufacturing, are growing. In the last two years, the capital inflows totalled NT$760 billion worth investment from some 70 companies, suggesting that companies will decide where they want to go as long as the investment environment is good.

Perhaps more importantly, policymakers should understand what caused the trade surplus to decline, in addition to rising oil prices and slower export growth. Does a smaller trade surplus mean the nation is losing its ability to compete on the world market? Will the worsened balance of trade lead to lower national income and affect the exchange rate of the New Taiwan dollar? Only when policymakers truly understand these problems will we believe they are treating the symptoms with the right medicine.

World must wake to China threat

By Jerome Keating

People's Liberation Army (PLA) General Zhu Chenghu recently showed his true colors when he boasted in a manner typical of a bully and one accustomed to a rigid social hierarchy. Zhu threatened that if the US intervened in a war between China and Taiwan, China would not hesitate to use its nuclear weapons against cities on the American west coast.

There is nothing much new with these kind of threats.

For some, Zhu's statements can be seen as the Chinese Communist Party (CCP) letting the PLA blow off steam and act tough. Others may see it as one of many CCP trial balloons to see how the Western powers react. If their response is tough, the CCP can then deny that Zhu was speaking on their behalf. If however the Western powers show a possible softening of their position on Taiwan's defense, then Beijing can ratchet up the rhetoric.

What is more surprising about Zhu's statement, however, is his unabashed disregard for the lives of Chinese citizens. Chinese leaders have in the past had no qualms about making cannon fodder (and now nuclear fodder) of their citizens. Mao Zedong's willingness to let millions of Chinese die to serve his aims and ego are well documented. However, in the past the reality of such disregard was always masked with protestations of love for the common man. Not so with Zhu; he brazenly went on to say that China "should be prepared to lose all of the cities east of Xian."

Given that the US' arsenal includes nuclear arms in the submarines in the South China Sea, this statement would also include all cities south of Xian.

Two things stand out from Zhu's threats. First he reveals the typical manipulation of the Confucian superordinate-subordinate roles that pervade Chinese society. The general masses must always believe that the central government has their best interests at heart. Subordinates should always be ready to make appropriate sacrifices. After all, that is why the CCP controls all the media.

Second, Zhu's talk is the standard discourse of the bully who occupies a position of superiority. He points to the vulnerability of the opposition. "You may have weapons but you are vulnerable. We have weapons to destroy US cities and we don't care about our people. So, you better think twice and give in to our demands." Hitler effectively used such posturing with Chamberlain for "peace in our time."

Some Sinophiles in the US have been arguing in Chamberlain fashion that we just "need to understand China, then we can all live in peace." Hello? What part of "If you don't give in to my demands and do what I want, then I will nuke you," don't you understand?

Zhu threatens further that opposing China would be harmful to the US economy, but that vulnerability is a gate that swings both ways. If the US economy and the world's were harmed, China's would be devastated.

When you come down to it, China would be a lot easier to take out economically than most countries imagine. A country no longer needs an army to take out China -- one would not even have to place a single soldier in the country. All a country would have to do is to take out key energy and industrial locations and it would implode. This is a vulnerability that even Japan and other countries in the region could exploit when threatened by China.

China right now depends on its economy, which is rapidly growing at a rate of 10 percent to 15 percent a year. Beneath its surface is a pressure cooker building up. With its own internal troubles and unrest, the government realizes it must keep the lid on and let steam off periodically.

The government controls the media and constantly clamps down on any gatherings and potential sources of trouble. The ease with which the well-orchestrated anti-Japanese riots were turned on and off like a steam valve illustrate both the government's need to deflect the focus onto an enemy outside and the ease with which the media is used to manipulate the public.

What keeps the masses satisfied under such draconian control is the fact that the economy keeps growing and money is being made. People can put up with losses of liberty if money is being made, but what would happen if the economy stopped growing?

Some people might ask what would happen to the world economy without China, but how closely are the two linked? How long would it take to replace Chinese factories with factories in other countries? What would it take to replace Chinese consumers with consumers in other lands?

The factories of China recently stole the lion's share of textile and other production from the factories of Indonesia, Malaysia, Thailand and Bangladesh. Such movements could be reversed. The factories of the above countries would be more than happy to see the shoe on the other foot. And as for a consumer market, India and Pakistan offer markets that, in terms of population, will soon exceed China's.

The days of marching an army against China are over; Japan tried that, but the Chinese always had more land to retreat to. But now Japan would not need a land army to set China back. After a war of missile exchanges and bombings, would not Japan recover much more quickly than China? It is also worth noting that Japan's air defenses are better than China's. Going a step further, in a tit-for-tat nuclear exchange with the US, who do you think would come out on top?

Given this situation, what the rest of the world has to examine and realize is that it does not depend on China as much as it thinks it does. Certainly not to the extent that it will let itself be held hostage by nuclear threats by the likes of people like Zhu. The economic role China plays as producer and consumer can be easily replaced by many countries that are less belligerent.

The world has also to realize the extent to which it is being manipulated and held hostage by China's market. I applaud a country like Italy for having the courage to stand up to China and grant President Chen Shui-bian a visa so that he could attend the Pope's funeral. China -- is trying to control the Catholic Church -- then refused to send their own delegates.

No one wants war, but as long as the hawkish generals in the PLA feel that they can pressure the world at a whim, the threats will continue and increase. Does anyone recall how Hitler said he would be satisfied with the Sudetenland?

Zhu's threats should be a wake-up call to the world. Do we really need a trading partner that says, if you don't give in to my demands to take over a free and democratic country like Taiwan, then I will nuke you regardless of the cost? What demands will be next? The world is competing for dwindling oil reserves, water supplies and other resources; it is a time when rational minds will be needed to build a better world. Zhu has already shown the true face of China that those living in Asia have known all along.

It is true that businessmen often have more allegiance to the dollar than to their country or principles, and Taiwanese businessmen are no exception. However, as the world enters an era of dwindling resources, it is time to restructure paradigms. People like Zhu belong to a different age that can only see the world in terms of superordinate-subordinate relationships. They will sacrifice everything before giving up their position of superiority.

It is time to recognize China's true intent in business, the strings attached and the manipulation involved, before the threats get worse.

Jerome Keating is the co-author of Island in the Stream, a Quick Case Study of Taiwan's Complex History.