Lin was taken to Taoyuan District Prosecutors' Office in the afternoon. But because Lin remained silent throughout two hours of questioning, prosecutors applied to the Taoyuan District Court for approval to detain Lin in an attempt to further investigate.

The court had not announced a decision at press time.

No takers

Earlier this week, Lin, who is also the producer of the Special Report series of VCDs that were released in the runup to last year's presidential election that were critical of the pan-blue camp, had asked local TV news stations to broadcast the Ugliness Behind the Beautiful, but none agreed to the request.

At the press conference held at noon yesterday at Taipei's Ambassador Hotel, Lin broadcast part of the film in which five actors are seen chatting, commenting on Chu's relationships with a number of women and hinting that he had had an affair with his former secretary.

Lin said he had not defamed anyone and that the film's contents should be open to evaluation by the public.

Police out in force

More than 20 police from Taipei and Taoyuan forces were present at the press conference, videotaping the proceedings.

They did not ask Lin to stop playing the film.

However, as soon as the press conference ended, they suddenly presented an arrest warrant and seized Lin.

A spokesman for the Taoyuan County Prosecutors' Office, John Chang, told reporters that "Lin was arrested on suspicion of violating the Election and Recall Law and the Law of Offenses Against Personal Reputation and Credits."

Chu last week accused Lin of violating the two laws at Taoyuan District Prosecutors' Office.

Taoyuan prosecutors earlier told Lin that if he publicized the"defamatory" film, he might be breaking the law.

Questions

On Nov. 13, Taoyuan prosecutors seized VCD footage from Lin's Taipei studio, a move that was criticized by some, who questioned whether they were acting in part because of influence exerted by politicians.

Chu yesterday told reporters that the parts of the film about him were a fabrication, but that they had hurt an innocent woman.

Vice President Annette Lu earlier this week said law enforcement officers should not conduct any form of censorship.

Formal sovereignty a must

By Huang Jei-hsuan, CALIFORNIA

When US President George W. Bush made a speech on Nov. 15 in Kyoto, Japan, it may have been the first time that a sitting US president formally endorsed Taiwan's democracy. But the real surprise came when he used the phrase: "controlling their own lives and their future."

There is no doubt that the Taiwanese people are controlling their own lives now. However, to be the masters of their own future, the Taiwanese people have to know that Taiwan's democratization will continue uninterrupted.

That would translate into formal sovereignty. Formal sovereignty remains the only way to guarantee Taiwan's democracy in the face of China's territorial ambitions.

Bush also cited the US "belief that there should be no unilateral attempts to change the status quo by either side," as if the Taiwanese people should be satisfied with de facto independence.

He overlooked the fact that, without formal sovereignty, Taiwan is having a hard time defending its "status quo" as a de facto independent democracy.

China's passage of the "Anti-Secession" Law and the formation of the alliance between the Chinese Nationalist Party (KMT) and the Chinese Communist Party (CCP) highlights why Taiwan needs formal independence.

Prior to that, the train of Taiwan's democratization had been chugging along, even with the constraint of the US "one China" policy.

But China's promulgation of the law and the advent of the KMT-CCP alliance exposed to all how vulnerable Taiwan's democracy is without formal sovereignty. Without formal sovereignty, no country in the world except the US will dare to raise its voice against China's missiles on Taiwan's behalf.

Worse, without formal sovereignty Taiwan cannot declare that China is an enemy country, though it clearly is given the "Anti-Secession" Law's ultimatum on the forceful annexation of Taiwan.

After the law was passed, instead of evacuating Taiwanese citizens from China, Taiwan's government was powerless to stop pan-blue camp leaders from flocking to Beijing to pledge their allegiance. And the government cannot prosecute them for collaborating with Taiwan's enemy.

Worse, Taiwan cannot restrain Beijing's agents -- who now masquerade as Taiwanese legislators -- from advancing China's agenda.

The turncoats who currently dominate the legislature are attempting to legitimize China's aggression, with the eventual goal of legislating the surrender of Taiwan's democracy to the despots in Beijing.

So far they have succeeded in blocking the special arms procurement bill, representing a unilateral disarmament by Taiwan in the face of a rising military threat from China. They are also trying to choke off funding for the Mainland Affairs Council.

Without formal sovereignty, Taiwan cannot curb the excesses of the pro-China media in Taiwan, despite their ongoing disinformation campaigns.

Without formal sovereignty, the Taiwanese people have lost much of their psychological defense against the nation's most belligerent enemy. Without such sovereignty, Taiwan's democracy is always just one presidential election away from extinction.

Conversely, formal sovereignty would have many positive effects.

For one thing, the perennial war to decide Taiwan's fate -- which is being fought primarily in Taiwan's political arena and between the Taiwanese people on one side and Beijing's cohorts in Taiwan on the other -- would be over. Taiwan's democracy would have emerged the victor.

The nation would have constructed a new and complete constitution to provide its democracy with a solid foundation. Taiwan's internal polarization would have ceased, making possible a loyal opposition.

Meanwhile, the politics of checks and balances would replace that of hate and animosity. Taiwan would embark on a program to fortify its military defense with an eye to deter any potential threat to its hard-earned democracy.

Taiwan would be able to enter into formal military alliances with the US and Japan, strengthening its security.

Taiwan would become a beacon of democracy and an anchor for the chain of East Asia's free societies.

China would have no choice but to make peace with Taiwan, to assure the US and the rest of the world that its "peaceful rise" is sincere, rather than just a catchphrase invented to mollify its neighbors. This would be in China's interests, by guaranteeing its eventual ascent to the status of an economic superpower.

If Bush truly valued Taiwan's democracy and recognized its role in maintaining stability in the region, he would have no alternative but to support Taiwan's formal sovereignty -- and so would the rest of the world.

Huang Jei-hsuan

California

China investment restrictions work

THE LIBERTY TIMES EDITORIAL

Since early this year, foreign investors have poured more money into Taiwan's stock market than any other stock market in Asia, with the exception of Japan's. As of this month, foreign investors have contributed over NT$400 billion (US$11.9 billion) to the nation's stock market. This month alone, the influx of foreign capital into the market has reached more than NT$140 billion, a record high for a single month.

Strangely enough, just a couple of weeks ago the nation's pro-China media was warning the government, quoting foreign financial analysts who argued that if the government did not push ahead with opening the three direct links with China and lifting the investment ceiling for Taiwanese companies in China to 40 percent of their asset value, foreign investors would eventually abandon Taiwan for China. They said that it looked as though the nation would go down the tubes if it insisted on prioritizing its sovereignty over everything else.

In fact, foreign investors have yet to withdraw their capital from Taiwan, even though the government has yet to eliminate restrictions on Taiwanese businessmen investing in China or negotiate with Beijing over regular cross-strait direct flights. On the contrary, foreign investors have been putting more money into Taiwan. Last year, foreign investors injected a total of NT$283.9 billion into the nation's stock market. This year, they have already far exceeded that amount. Interestingly enough, between January and August, foreign investors injected US$11.5 billion into Taiwan's stock market; at the same time they only invested US$800 million in South Korea's stock market.

These statistics indicate that although the media believes the nation's economic outlook is dismal, Taiwan is still a top investment target for foreign investors. Evidently, the pro-China media outlets were ignoring the facts and pursuing their own interests when quoting some foreign investors' criticisms of Taiwan's China policy.

If we analyze the portfolios of foreign investors we find that last year they invested NT$283.9 billion in Taiwan Semiconductor Manufacturing (TSMC), China Steel Corp and Chunghwa Picture Tubes. This month, foreign investors have also focused on buying shares of TMSC, AU Optronics Corp (AUO) and United Microelectronics Corp (UMC). It seems that when looking for companies to invest in, foreign investors still prefer Taiwanese firms that are based in Taiwan.

The government has yet to totally lift restrictions on chip companies that want to set up plants in China. Despite this, TSMC, the leading player in the industry, is not being ignored by foreign investors. AUO and China Steel have similar characteristics, for they have both kept most of their production lines in Taiwan.

If foreign investors' criteria for selecting investment targets are based on profitability, we have to consider why the companies willing to stay in Taiwan are proving to be more profitable and able to keep up with industry changes.

There are 694 listed companies in Taiwan. Only one or two companies have continued to perform well after relocating to China. Shares of the majority of companies that have moved to China are trading at or below their face value -- not the sort of thing that foreign investors are interested in.

In addition, traditional industries that have been able to stand out are those that face partial bans on expanding into China, Formosa Plastics Group being a good example. Although the Formosa Plastics Group, just like TSMC, has invested a great deal of money in China, the amount accounts for a small proportion of its overall investment in Taiwan, and remains in a controllable range.

In other words, the government's reluctance to allow naphtha cracker plants to set up branches in China has not swayed investor confidence in Formosa Plastics Group, but instead guaranteed a profit.

The major weakness of Taiwanese businessmen working in China is that they have fallen into the "China fever" trap -- a result of a "greater China complex." Company owners have to travel to various regions in China throughout the year rather than focus on their business operations in Taiwan. Meanwhile, jumping onto the China bandwagon leads to lower prices for products, which can place an industry or an enterprises in a disadvantageous position.

In retrospect, the government's decision to restrict wafer foundries from moving to China in 2002 seems like a major factor behind the continued profitability of chip manufacturers such as TSMC, and why foreign investors still regard them as top investment targets.

Former president Lee Teng-hui recently pointed out that "a nation's leader should not be influenced by superficial phenomenon presented in a news report. He or she should take the needs of the people into account and act accordingly."

A pro-China Chinese-language newspaper recently ran a headline that said "Foreign companies will abandon Taiwan if the government continues to forbid Taiwanese enterprises from investing in China."

But, contrary to expectations, those forbidden industries have turned out to be foreign investors' favorites.

This all goes to show that Lee's remark was well-founded. After all, foreign companies and media outlets are pursuing own interests and the government should never submit to their will. Rather, it should consider the nation's sustainable development and map out a policy based on the needs of all of the nation's industries.