|
The Liberty Times
Editorial: Beware China’s economic invasion
Ever since he started his second term, President Ma Ying-jeou (馬英九) has been
even more conspicuously pro-China. During his Double Ten National Day address on
Wednesday last week he spoke of relaxing obstacles to foreign investment, saying
that in the future, deregulation would be the default, and restrictions the
exception. When Ma speaks of foreign investment, what he actually means is
investment from China. Given the parlous state of Taiwan’s economy at the
moment, if Chinese investment is allowed to come flooding in, it will only
increase China’s hold on Taiwan’s economy, and thereby increase Beijing’s
influence on Taiwanese society. Essentially, this will turn Taiwan into another
Hong Kong.
Despite the apparent improvement in relations between China and Taiwan in recent
years, their essential nature has not changed, as China continues to view Taiwan
as a renegade province. Since the end of World War II, it has not been possible
for China to achieve its goal of annexing Taiwan through military action.
However, the massive global economic tectonic shifts in the final two decades of
the past century have given China the opportunity to control Taiwan through
economic means. In that time, Taiwanese businesses have become less competitive,
necessitating a mass exodus to China.
This not only helped China’s economic growth, it also had a hollowing-out effect
on Taiwan’s domestic industrial base, making Taiwan increasingly dependent on
China. In 2006, the Chinese economist Hu Angang (胡鞍鋼) proposed that China could
bring Taiwan to its knees within seven days if it instigated a trade war,
likening Taiwan to a person with diabetes, dependent on economic insulin that
only China can provide. Clearly, China is already thinking in terms of trapping
Taiwan through economic reliance.
The reason for the multitude of questions regarding Ma’s policies is that they
are all contributing to the seriousness of this “economic diabetes,” and thereby
hastening Taiwan’s downfall.
If one looks at what Ma has done since gaining office, he has consistently and
unwaveringly followed a singular course in how he has run the country, and that
is to increase reliance on China. During the global financial crisis, Ma touted
China as Taiwan’s savior. He allowed Chinese tourists to come to Taiwan, which
had no appreciable stimulus effect on the economy, but failed to make structural
improvements to domestic industry or the investment environment, so that the
economy idled. Taiwan is also the Asian country worst hit by the ongoing EU
sovereign debt crisis.
However, Ma has clearly not looked into the mistakes and errors of his pro-China
policies, and just keeps reiterating the need to attract Chinese investment. His
answer is to allow Chinese investment in the manufacturing, service and
construction industries. Of all of these, it is the deregulation of public
construction that contains the greatest potential danger, but the Ma
administration has allowed the deregulation of up to 51 percent of the industry.
It has recently been revealed that Chinese investors are interested in bidding
for the A25 plot “Build, Operate, Transfer” project in Taipei’s Xinyi District
(信義). There are concerns that allowing this public engineering project to fall
into the hands of Chinese investors with a low bid of NT$20 billion (US$685
million) will mark the beginning of China’s control of Taiwan.
The first concern is that China has always had the ambition to annex Taiwan, so
why allow Chinese investors to be involved in public construction projects? This
is especially worrying since some of these projects are related to national
security and Chinese investors may well get access to confidential information
over the course of these projects, potentially leading to national security
leaks.
Second, Taiwan’s current account surplus has stood at around the NT$1 trillion
mark for the past five years, and there is a lot of privately owned money in the
country. If there are good investment opportunities out there that would see the
environment improved and a large growth in domestic private investment, what is
the sense in allowing Chinese investors to bid?
Besides, restricting Chinese investment is by no means exclusive to Taiwan.
China has attempted to make major acquisitions in Western countries over the
past several years, almost all of which have met opposition in various countries
on the grounds of national security, especially in the energy and high-tech
industries. Chinese expansionism has always raised eyebrows in the outside
world.
The recent US House of Representatives’ Permanent Select Committee Investigative
Report on the US National Security Issues Posed by Chinese Telecommunications
Companies Huawei and ZTE cites concerns over the possibility of these companies
facilitating cyberespionage on behalf of the Chinese intelligence services.
By contrast, some Taiwanese telecommunications providers have expressed an
interest in purchasing Huawei equipment as it is relatively inexpensive. This
total disregard for national security is worrying.
It must be said that Huawei and ZTE are hardly exceptions. The Chinese
government has its hand in many Chinese companies. At this point, considerations
of profit, loss and cost do not matter, because this is more about national
policy objectives, and these objectives — and what Beijing hopes to achieve —
cannot be measured in monetary terms.
Therefore, if Chinese investors are allowed to vie for construction projects in
Taiwan, they can put in very low bids to win the tender and then contract out
the work to Taiwanese companies, guaranteeing a certain profit margin. This
would mean that investors and local contractors would have common interests,
making it possible for investors to influence the contractor’s political
behavior, for example by persuading them to support the pro-China candidate when
national elections come around. Then, all of a sudden, China will have achieved
its goal of exerting more influence over Taiwan.
China is not a democratic country, nor does it have a capitalist free market.
Yet, it is very good at exploiting the weaknesses of democracy and the free
market, and Taiwan is its primary target. It does not have to go all out, all it
needs do is strengthen its influence on Taiwan, and money is no object. What’s
more, Ma has opened the door by allowing Chinese investors in to bid on public
construction projects.
How could China miss an opportunity as great as this? Once Chinese investors
start pouring in and grabbing a piece of the action, they will have leverage
over the Taiwanese companies involved in these projects. When this happens, it
will not just be Taiwan’s economy that suffers: after that, its very democracy
and sovereignty will be at risk.
Translated by Paul Cooper
|
