Dear Mr. Donald H. Rumsfeld,

It is our pleasure to write you our concern. We don’t know why China should say such kind of “3 conditions over anti-terrorists” and self-talking on “we should not have double standards”?

China denied on Sept. 20, 2001 it had set conditions for backing a global war on terrorism in asking for US support for Beijing’s struggle against those it considers separatists and terrorists, including Muslim militants.

But Foreign Ministry spokesman Zhu Bangzao reiterated an appeal that there should be “no double standards” in an international campaign against terror in the wake of last week’s attacks on New York and Washington.

And he repeated China’s demand that retaliation for the attacks should be based on concrete evidence, not harm innocent civilians and comply with the principles of the UN charter.

On Tuesday, Zhu had appeared to indicate that China would expect US cooperation in return for its support.

“The United States has asked China to provide assistance in the fight against terrorism,” he told Tuesday’s news conference.

“China, by the same token, has reasons to ask the United States to give its support and understanding in the fight against terrorism and separatists,” he said. “We should not have double standards.”

In Taiwan side, the media's exposure of the sighting of three Chinese spy ships off Taiwan's northeast coast last year prevented the military from tracking the Chinese vessels for half a year, a defense official said.

Following the media report, which detailed how Taiwan's military tracked the Chinese ships, defense officials were unable to make similar discoveries for up to six months after the incident. The details provided in the news report allowed the Chinese military to evade Taiwan's coastal surveillance systems, the defense official said.

The report was made public by the Chinese-language Power News on May 19 last year after three Chinese spy ships were spotted off Suao in northeastern Taiwan.

The report described in detail the coordinates of where the spy ships were discovered as well as the distance of the ships from the coast as they were sighted.

The information was discovered by the military to have been provided by an army major, Liu Chih-chung, who has been sentenced to nine years in prison for leaking "classified information" in a ruling by the military court. The major is appealing his case to the military's supreme court.

"The people may have no idea how damaging to the military the information leaked by the major was. For as long as six months, we were unable to discover any Chinese spy ships off Taiwan. It was because of the Power News report that the Chinese military knew the capabilities of our coastal surveillance systems," the defense official said.

"We were then very worried since the Chinese spy ships could move freely off Taiwan's coastline as if they were `invisible.' Fortunately, we solved the problem by upgrading our coastal surveillance systems. But it cost us NT$200 million," the official said.

"We have been reluctant to tell the public what kind of damage the Power News report did to the military. We keep silent partly to prevent the army major, who leaked the sighting of the Chinese spy ships to Power News, from being punished more severely," he said.

"According to military regulations, the maximum penalty for the army major could be life imprisonment or death. Now we've just given him a prison term of nine years."

The defense official used a naval official surnamed Liao as an example of typical military sentencing. Liao was given life imprisonment because he passed on a piece of classified information to a retired officer who was his former colleague at the navy's general headquarters.

Liao is still serving his term in prison as he was convicted only six years ago. Liao's disclosure of military secrets was discovered seven years ago after a navy investigation.

In comparison, the penalty given to Liu for leaking information to Power News is much lighter, the official said.

"It is true that the Chief of the General Staff, General Tang Yao-ming, has instructed authorities to severely punish Liu and other similar offenders. But considering the damage he brought to the military, the nine-year prison term is really the minimum punishment the military could give to him," he said.

On the other side, the Chinese government has excluded the Swiss-owned bank Credit Suisse First Boston from a US$10 billion sale of Chinese company shares in an apparent move to punish the bank for helping Minister of Finance Yen Ching-chang arrange his Taiwan investment roadshows in Europe in June and July. Beijing's move has also caused other foreign banks, including Goldman Sachs and Merrill Lynch, to withdraw from plans to help Yen with an investment trip to the US.

The Credit-Suisse incident shows that the so-called "manufacture in China but process orders and do R&D, logistics and procurement in Taiwan" model is not feasible. It also shows the high risks facing Taiwanese banks entering China.

In fact, Beijing's move was to be expected. This author has repeatedly warned that it is not feasible to move production to China and keep logistics and R&D in Taiwan. It takes a massive amount of capital to build production facilities which, once built, don't move. But operations, like logistics and order-processing, can be moved overnight from Taipei to Shanghai once Beijing makes the demand. Who would dare procrastinate? Not Western companies, much less the Taiwanese.

Personnel, computers, mobile phones -- all these can be moved any time. Think about it. Will Beijing still let you process orders in Taiwan but carry out production in China by remote control after Taiwan has pumped its key production and capital resources into China? It only takes common sense to make a judgment on this. But business incentives cause people to lose their wisdom. The "westward march" clamor has prevailed both before and after the Economic Development Advisory Conference.

Also, the idea of building national security on the back of economic globalization is feasible only under certain conditions -- one of which is that Taiwan's economy must not be shackled to China's. Unfortunately, Taiwanese businesses both large and small are moving in the other direction.

Over the past 10 years, Taiwan has poured US$100 billion in investments into China. "March west" theorists apparently don't think it's enough. They blame the government for causing businesses to lose opportunities.

Strangely enough, South Korea only invested US$106 million in China from January to May this year. At the same time, the closure of South Korean-owned factories and the withdrawal of South Korean capital from China amounted to US$101 million. So the nation's the actual net investment was only US$5 million.

But what about Taiwan? Taiwanese invested more than US$5 billion in China in the first half of this year alone (including the capital that entered China via the US, Hong Kong and Singapore). At a single meeting on Aug. 31, the Ministry of Economic Affairs' Investment Review Committee approved 17 applications for investment in China totaling US$152 million.

Is it that the South Korean businesses are so foolish that they are slow to take up positions in China? Why has South Korea managed to survive without going to China? It is interesting to note that South Korea, which has not boldly marched into China, posted economic growth of 8.8 percent last year, 3.7 percent in the first quarter of this year, and 2.7 percent in the second quarter.

In comparison, Taiwan, which poured US$10 billion into China last year and another US$5 billion in the first half of this year, saw a negative economic growth rate of -2.37 percent in the second quarter. 

In tackling the global economic slowdown, South Korea's strategy has been to solidify its foundations and reduce investments in other countries. Taiwan is doing exactly the opposite, with its businesses demanding greater access to China.

Taiwan Stock Exchange Chairman Lin Jong-hsiung said recently, "It's absurd to say we can devise a mechanism to let capital flow back here." In fact, all this talk of a capital flow-back mechanism, of "doing R&D in Taiwan, manufacturing in China" is simply building castles in the sky. It was all cooked up to rationalize the "march west" policy.

Easing restrictions on investment in China will bring only result in the hollowing out and marginalization of Taiwan's economy. Once China has absorbed enough of Taiwan's capital and industries, once Taiwan's economy has been gutted, one order -- even one insinuation -- from Beijing will bring down all those fantasies about procurement centers, supply chain headquarters, orders and logistics and capital flow-back mechanisms.

If Beijing's recent move has inadvertently awakened the people of Taiwan and their policymakers, if it has caused them to abandon unrealistic fantasies and given them a thorough understanding of the need for effective management of investments in China, then that will be one big silver lining to the dark clouds over Taiwan.

Taiwan Huang Tien-lin is a national policy advisor to the A-bian president, said that …

In our viewpoints, that Taiwan could be defeated by communist China for its political and economic pressure. We thought that only US Taiwan policy which firm pledge of support for Taiwan in face of any Chinese attack on the island can save it on critical.

So, Taiwan needs your help.

                                                                                                                Yours Sincerely,