KMT set to block referendum plan

POLITICAL INTRIGUE: Political observers have the feeling that the KMT and PFP are more frightened of the prospect of a plebiscite than they are letting on

By Sandy Huang

STAFF REPORTER

"The pan-blue camp is concerned about holding a WHO referendum because of a knee-jerk reaction that such a move would agitate or provoke Beijing."－Holmes Liao, political observer

Despite arguments from pan-blue members against President Chen Shui-bian's proposal to hold a referendum on the country's entry into the WHO, some political observers said that there are other reasons why the KMT and PFP are against a referendum.

"The pan-blue camp is concerned about holding a WHO referendum because of a knee-jerk reaction that such a move would agitate or provoke Beijing," said Holmes Liao, a political observer and research fellow at the Taiwan Research Institute's Division of Strategic and International Studies.

"The opposition pan-blue camp is afraid of a reaction from Beijing, which wants no referendum of that nature to take place in Taiwan," Liao said.

In a bid to demonstrate to the international community Taiwan's determination to join the WHO, Chen last week proposed to hold a plebiscite on Taiwan's entry into the international health body by next May when the WHA holds its next annual meeting.

Taiwan's bid to gain observer status at the World Health Assembly (WHA) -- the highest decision-making body of the WHO -- was rejected for a seventh time late last month thanks to opposition from China.

Chen's plebiscite idea has since met with severe criticism from the pan-blue camp. PFP Chairman James Soong said that there's no need to hold a referendum as Taiwan's desire to join the WHO is already a public consensus.

In addition to pan-blue legislators' criticism that Chen's proposal is an attempt to distract public attention away from the government's SARS prevention and control performance, KMT Chairman Lien Chan, at his party's weekly Central Standing Committee meeting last Wednesday, said Chen's plebiscite idea "would confuse the international community by creating an impression that suggests Taiwan's public is divided on the matter concerning its entry to the WHO."

KMT and PFP lawmakers believe a referendum could be a back door to independence, Liao added.

"One reason that the pan-blue camp is really scared about holding a WHO referendum is that the move might pave the way in the future for a plebiscite that could be staged to determine issues such as the nation's identity and future," Liao said, alluding to the difference in independence and unification ideology between the two camps.

Agreeing with Liao's comments, political observer and sociology professor at National Taiwan University Chiu Hei-yuan said that the pan-blue camp is concerned that the implementation of a referendum would displease Beijing.

In this regard, Liao said that the concerns of the pan-blue camp could be alleviated via a referendum law that stipulates the exclusion of public voting on controversial issues such as independence or unification, national security and military affairs.

The legislature's Home and Nations Committee is still deadlocked over the draft referendum law.

Ger Yeong-kuang, professor of political science at National Taiwan University, disagreed with Liao's comments concerning Beijing and said that "the pan-blue camp's opposition to a referendum has nothing to do with intimidation from Beijing.

"While we don't know how exactly China would react if Taiwan does hold a referendum, one thing is certain," Ger said. "The DPP, being the ruling party, should work to avoid all ways that would upset or intensify cross-strait relations and thus provoke war and place lives in danger.

"Rather than saying that the pan-blue camp is afraid of Beijing's reaction and thus is opposed to the referendum, I think it is more correct to say that the pan-blue camp is concerned about the lives and security of Taiwan's 23 million people."

With the presidential election less than nine months away, Ger said that Chen's referendum idea is actually a campaign maneuver meant to smear focus of the election as well as distract the public's attention from the performance of the DPP.

SARS unlikely to stem investment

By Tung Chen-yuan

Although the outbreak of SARS in China has somewhat slowed the pace of Taiwanese investment, it has continued to grow in the first four months of the year. What is the driving force that motivates Taiwanese businesspeople to swoop into China and invest there? There are only two answers: increasing competitive power and occupying the global market.

In particular, the success of the IT industry has prompted Taiwanese businesspeople to invest heavily in China since the mid-1990s. Taiwanese businesspeople have already taken advantage of China to create Taiwan's IT empire.

From 1986 to 2000, the output value of Taiwan's IT industry (including domestic and foreign) grew by an average of 26 percent annually. At the same time, the international market share of Taiwan's IT products also increased rapidly. In 1986, the output value of Taiwan's IT products was only 1.5 percent of the world's total output value. In 2000, the output value of Taiwan's IT industry reached 18.7 percent of the total output value of the world's top 10 IT countries.

The main reason behind Taiwan's remarkable achievements is the fact that Taiwanese businesspeople actively pursue overseas investment, particularly in China. Taiwanese businesspeople have taken advantage of cheap labor overseas to integrate capital, management and technology in order to occupy the world market quickly. In 1992, 90 percent of the nation's IT products were manufactured in Taiwan, with only 10 percent manufactured overseas. After 1992, the ratio of overseas production has almost grown by 10 percent every two years: 10.4 percent in 1992; 20.6 percent in 1994; 32.1 percent in 1996; 42.7 percent in 1998; 50.9 percent in 2000; finally 63.6 percent last year.

In particular, Taiwanese businesspeople have transferred most of their IT production bases to China. In 1995, only 14 percent of Taiwan's IT products were manufactured in China. By last year, about 47 percent of Taiwan's IT products were manufactured in China. From 1995 to 2001, the ratio of Taiwanese businesspeople transferring their IT products to be manufactured overseas grew by 35.6 percent. During the same period, the ratio of Taiwanese businesspeople transferring their IT products to be manufactured in China grew by 32.9 percent. Therefore, it can be said that overseas investments by Taiwan's IT industry in the late 1990s took place in China.

To a greater extent, the expansion of Taiwan's IT industry in the world market is due to the increase of Taiwanese businesspeople manufacturing their IT products in China. From 1993 to 2001, the growth rate for Taiwanese IT products manufactured at home was less than 20 percent -- even as low as minus 12.9 percent in 2001 -- and the annual growth rate was 10.7 percent on average. By comparison, from 1996 to 2001, the growth rate for Taiwanese IT products manufactured in China was very fast with an annual growth rate of 35.5 percent on average.

By 2000, Taiwanese businesspeople had already transferred the production of most lower-end IT products to China. After 2000, they quickly transferred the production of advanced notebook computers and liquid crystal display (LCD) monitors to China. In 1999, they only transferred 3.3 percent of notebook computer production and 0.5 percent of LCD monitor production overseas. By last year, these percentages reached 40 percent and 72 percent, respectively. The speed of their transfer is astonishing.

What is more astonishing is that most of the Taiwanese production bases were transferred to China. In 2000, Taiwanese businesspeople did not invest in any production of notebook computers in China. They only transferred 1 percent of LCD production to China. By last year, these percentages increased to 37 percent and 69 percent, respectively. In other words, when the production bases of these two products were transferred overseas, they were almost all transferred to China.

At present, Taiwan has nine IT products that occupy more than half of the world market. In particular, Taiwan occupied 93 percent of the scanner market (2000), 88 percent of the motherboard market (last year), and 74 percent of the power supply market (2000). During the two years in which Taiwanese businesspeople transferred the production of notebook computers to China, the global market share of Taiwan businesses grew from 53 percent in 2000 to 61 percent last year.

In the last seven or eight years, Taiwanese businesspeople's global market share would increase by 0.5 percent each time they increased the ratio of their IT products manufactured in China by 1 percent. Given such remarkable results, no wonder Taiwanese businesspeople keep investing in China. Unless SARS radically destroys China's production systems, Taiwanese businesspeople will keep heading toward China and take advantage of China to expand Taiwan's IT empire.

Tung Chen-yuan is an associate research fellow at National Chengchi University's Institute of International Relations.

Taiwan should cut ties with China

By Huang Tien-lin

The SARS epidemic which originated in China has claimed six of Taiwan's medical workers. All Taiwanese people grieve over their deaths. But who is to blame? China, of course.

Were it not for China's SARS outbreak, Taiwan would never have had the virus. Were it not for China's intentional cover-up of the disease, SARS would not have become a global epidemic. Were it not for constant flow of people between Taiwan and China (Taiwanese businesspeople made 3.8 million visits to China last year, or more than 10,000 visits per day), the nation would not have become a seriously affected area.

At most, it would have been in the same situation as Europe, the US and Japan, where there are SARS cases but the epidemic is easily controlled.

Doctors and experts all agree that before a vaccine is developed, quarantine is the only way to contain SARS. In other words, contacts with affected areas should be reduced.

However, it is baffling that even though we have suffered many citizens' deaths and tens of billions of NT dollars in economic losses, only domestic quarantine has been mentioned until now. Some still view China as a sacred territory, prioritize the benefits of China-based Taiwanese businesspeople and fear to discuss the possibility of quarantining China.

If we still issue landing visas to travelers from SARS-hit areas, such as Hong Kong and Macau (the decision to suspend the visa issuance for one month was not made until April 26) and allow local businesspeople coming home from China to freely move around, it will be impossible to effectively control the epidemic from spreading here.

Fortunately, the plan to offer charter flights to bring home Taiwanese businesspeople infected with SARS in China was not adopted. We do not know how many more physicians and flight attendants would have to succumb to the epidemic if the plan had gone ahead.

The fact that SARS originated in China indicates that China's natural environment has long been the hotbed of various epidemics.

Even if China adopts high-handed measures to bring the epidemic under control, that might be just a superficial achievement, given the country's vast farming villages and backward border areas.

If the government fails to grasp reality and allows tour groups to visit China after the epidemic there eases, this will be no different from inviting another wave of SARS, in light of the 3.8 million Taiwanese visits to China recorded every year.

Apparently, if the government wants Taiwan to be free from SARS and other new plagues, then temporarily forbidding its people from touring China (until Taiwan is admitted into the World Health Organization) would be an effective measure that does no harm to ourselves and can decrease passenger traffic across the Taiwan Strait to a controllable range.

It not only is conducive to the future epidemic prevention efforts in Taiwan, but can also block a second invasion of SARS.

The SARS outbreak has taught us a lesson -- only by cutting off relations with China can Taiwan achieve developments in safety and stability. By completely isolating itself from China before 1987, Taiwan created an economic miracle and was safe from epidemics.

Since it started frequent exchanges with China, however, epidemics that had not been seen here for decades have attacked Taiwan one after another, such as dengue fever, foot-and-mouth disease, anthrax, avian flu, hantavirus, sickness in Taiwanese abalones and cholera.

These outbreaks take a heavy toll on the rural economy. The flow of capital to China has dramatically reduced people's wealth, leaving behind bad loans in the trillions of NT dollars. This time, the SARS epidemic has inflicted a loss of hundreds of billions of NT dollars on the nation, and the figure is still on the rise.

However, China has never blamed itself. The recent overbearing attitude and remarks of Chinese representatives over Taiwan's WHO entry bid serve as proof, telling us that appeasement will never change China's suppression of Taiwan. Instead, it will fan China's flames of arrogance.

Is it true that China's bullying and trampling on Taiwanese people's right to existence and dignity cannot arouse our moral indignation and patriotism? No, it isn't.

A recent opinion poll shows that 64 percent of the respondents believe the government's restrictions on China-bound investment should be stricter. The figure is a new high among such surveys.

Meanwhile, 78 percent of the respondents agreed to keep the ban on entry and departure of people from SARS-stricken areas, such as China.

Why hesitate? Let's sever relations with China so that Taiwan can stay away from plagues and SARS, as well as salvage the economy.

The idea that people can control the risks themselves and the government need not intervene is preposterous. This is as unpractical and dangerous as the notion that people can implement home quarantine by themselves and no government power and intervention is needed.

It might help facilitate commercial activities between the two sides of the Taiwan Strait and satisfy Taiwanese businesspeople. But it will definitely leave Taiwan's economy in a tough spot from which it may not emerge for eons.

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