Council of Grand Justices sinks Chen
　

THE OLD SWITCHEROO: The Council of Grand Justices said changing the judges in the former president’s case was constitutional, despite allegations of political interference
　

By Shelley Huang
STAFF REPORTER
Saturday, Oct 17, 2009, Page 1

The Council of Grand Justices yesterday announced a constitutional interpretation that switching judges in former president Chen Shui-bian’s (陳水扁) case was not unconstitutional, dealing a serious blow to the former president and his supporters.

The Council of Grand Justices reasoned that the method the Taipei District Court used to combine corruption and money laundering cases was in agreement with the Constitution’s protection of a defendant’s litigation rights because it was conducted according to the law and through a committee of five judges, said Hsieh Wen-ting (謝文定), spokesperson for the Judicial Yuan.

Last December, a panel of judges replaced Judge Chou Chan-chun (周占春) with Tsai Shou-hsun (蔡守訓) in the trial of Chen and 12 codefendants. The change prompted allegations of procedural flaws and political interference.

Chen’s office then petitioned the Council of Grand Justices for an interpretation on whether switching the judges was constitutional.

On Sept. 11, after Tsai announced guilty verdicts for Chen, former first lady Wu Shu-jen (吳淑珍) and other co-defendants, some legal experts and retired judges said the first ruling was invalid because Tsai was unconstitutionally presiding over the case.

The Council of Grand Justices’ ruling could weaken the case built by Chen and his lawyers, who have repeatedly stated in court that the judiciary’s decision to switch judges created doubt as to whether justice would be served in the former president’s case.

Speculation is rife that the judges were switched for political reasons because Chou once ruled to release Chen from detention, while Tsai has repeatedly ruled to keep him in detention.

In addition, the Council yesterday said that in accordance with the Code of Criminal Procedure (刑事訴訟法), it is constitutional for prosecutors to appeal the ruling if judges were to release Chen from detention.

Although the Council ruled that it is constitutional to detain a defendant based on the seriousness of the crimes with which he or she is charged, the Council conceded this should not be the sole criterion on which a detention ruling stands. Other factors such as flight risk or colluding with witnesses must be demonstrated to be credible for a judge to rule to detain a defendant, it said.

Chen has been in detention since December. He and his wife received life sentences and fines of NT$200 million (US$6.2 million) and NT$300 million respectively in the first trial’s ruling on Sept. 11.

Chen’s office yesterday expressed its regret over the Council’s constitutional interpretation, and said the explanation failed to clarify the issue or end disputes.

In a written statement, the office continued to attack the Taipei District Court for switching the judges.

“We still believe that switching the judges in the first trial violates the laws and the Constitution,” the statement said.

The office further urged the judges in the second trial to reconsider whether it is necessary to continue detaining Chen and to ­release the former president as soon as possible.

The Democratic Progressive Party yesterday also released a press statement saying it was very disappointed by the constitutional interpretation.

“The conservative mentality of the Grand Justices is very different from the trend in other democratic countries in the world,” the statement said. “Next, we will seek to amend the Criminal Procedure Act (刑事訴訟法).”

It said the Council of Grand Justices made the ruling based on the assumption that all judges would review a case based on the same principles of impartiality, “however, for the people, the argument is hardly convincing.”

KMT vows to liquidate party assets as Ma takes chair
　

By Mo Yan-chih
STAFF REPORTER
Saturday, Oct 17, 2009, Page 1

The Chinese Nationalist Party (KMT) said yesterday that the party would deal with its party assets before the 2012 presidential election as President Ma Ying-jeou (馬英九) promised to handle the issue after taking up the party chairmanship today.

Ma won the election for KMT chairman in July and will take the helm of the party at the KMT’s 18th national convention today.

Ma will accept the party’s flag from predecessor Wu Poh-hsiung (吳伯雄) and outline reform goals in his speech at the handover ceremony today. Cleaning up the party’s assets will be the priority in his party reform plan, the KMT said.

Lin Yong-ruei (林永瑞), director of the KMT’s administrative management commission, said yesterday that the party would seek to sell its remaining asset — the Central Investment Co (中央投資公司) — by 2012, and that the party would refrain from owning any businesses in the future.

PROCEEDS

The company is estimated to be worth more than NT$20 billion (US$600 million). Lin said about NT$15 billion of the proceeds from the sale would be used to pay for retirement pensions and to pay off debts and the remainder would be donated to charity groups.

RE-PROMISE

In 2005 when Ma took the helm of the party for the first time, he vowed to make the KMT an “asset-free” party by last year.

The KMT sold the building housing the Institute on Policy Research and Development in the Muzha (木柵) area for NT$4.3 billion and three media companies — China Television Co, Broadcasting Corporation of China and Central Motion Picture — to the China Times Group for NT$9.3 billion.

However, Ma failed to sell the Central Investment Co before he stepped down in 2006. It is believed that much of the KMT’s portfolio of “stolen” assets was laundered through the stock market during the 1990s.

A Control Yuan report in 2002 said the party still had more than 400 properties that it had acquired illegally.

At today’s handover ceremony, Ma will renew his promise to make the party “asset-free,” and pledge to obtain funds for elections via fund-raising events, the party said.

ECFA won’t bring laborers: premier
　

‘INCORRECT’: A DPP legislator said WTO rules would mean that signing an ECFA with China would lead to trouble, but Wu Den-yih said that she was misinformed
　

Shih Hsiu-chuan
STAFF REPORTER
Saturday, Oct 17, 2009, Page 3
　

Premier Wu Den-yih (吳敦義) said yesterday that the government would not open the Taiwanese market further to Chinese agricultural products and would not allow the entry of Chinese laborers, while avoiding questions about how long the bans would be in place.

Wu and Ministry of Economic Affairs officials attended a legislative question-and-answer session yesterday dominated by discussion of the government’s plan to sign an economic cooperation framework agreement (ECFA) with China.

President Ma Ying-jeou (馬英九) has said the country plans to ink the ECFA by early next year at the latest. Wu said that economic officials had recently met Chinese Ministry of Commerce officials and produced an initial draft of the agreement.

Fielding a question from Democratic Progressive Party Legislator (DPP) Lin Shu-fen (林淑芬) on whether the ECFA would follow one of the six models of regional economic integration under the WTO framework, or resemble the Closer Economic Partnership Agreement (CEPA) between Hong Kong and China, Wu said none of the models was suitable for the ECFA.

“[The ECFA] will be an agreement based on the special situation regarding cross-strait relations under the WTO framework,” Wu said.

Minister of Economic Affairs Shih Yen-shiang (施顏祥) partly agreed with Lin, who defined the ECFA as an interim agreement on free trade under which parties must further trade with each other and open their markets to other WTO members outside the pact after the interim period to avoid trade sanctions.

“That the cross-strait ECFA will grant partial access to selective industries of each side is compatible with the spirit of the WTO, but we should be careful of saying that it is an interim free trade agreement for fear of narrowing its scope,” Shih said.

Lin urged the officials to inform the public of the possible impact an ECFA could bring after its interim period passes, as well as consequences the country would face if it then chose not to expand its market access as required by the WTO.

“You have only been telling the public about the initial benefits of the ECFA, but what comes next?” Lin asked. “The WTO caps the interim period at 10 years. After that, will you be able to keep [Ma’s] promises that Taiwan will not open its market to Chinese labor and the currently prohibited 836 agricultural products?”

WTO regulations stipulate that after the interim period is finished, the market access of parties to interim agreements on free trade must be extended to include a majority of trade merchandise and service industries, Lin said.

Wu and Shih failed to answer the question directly.

Shih said the 10-year cap as described by Lin was “incorrect.”

Citing conclusions of an assessment conducted by a weekly on the impact of an ECFA on the country, Lin said the pact would be “Viagra for the rich” and “a landslide for the poor.”

Wu disagreed, saying: “Studies have shown the benefits of signing the ECFA will outweigh the drawbacks.”

“More than 200,000 or 300,000 people will benefit [from the ECFA], while the worst-case scenario would see about 80,000 people put at disadvantage,” Wu said. “Since the ECFA will push Taiwan toward a positive development, we should try to maximize its benefits and minimize its harm … for example, extending the duration of unemployment pensions to laborers losing jobs because of this and helping affected industries upgrade.”

Chinese Nationalist Party (KMT) Legislator Chang Chia-chun (張嘉郡) asked Wu how long the government could keep its promise not to open Taiwan’s market to Chinese laborers and the banned agricultural items.

“Is it one year, two years, or 10 years?” Chang said.

Wu said: “We will surely hold the bottom lines [regarding the restrictions on imports of more agricultural products and Chinese labor], and [China] will understand.”

Chang then said: “Everyone is feeling anxious [about the ECFA] as the government hasn’t told the public clearly what the ECFA is. The Council of Labor said the number of local laborers affected by the ECFA would be 80,000, the Ministry of Economic Affairs said 105,000, and the Council of Mainland Affairs said both estimates were wrong.”

Wu reiterated that the government would prioritize the interests of Taiwan and the well-being of Taiwanese.

“There is a Western saying that optimists see a rose’s petals, but pessimists see its thorns. As a government, we have to see the flower and the thorns, which means we will take care of the risks when seeing opportunities,” Wu said.

Hands off policy best for US: forum
　

By Jenny W. hsu
STAFF REPORTER
Saturday, Oct 17, 2009, Page 3

“The best role [for the US] is to stand on the sidelines and cheer.”— Ralph Cossa, president of the Center for Strategic and International Studies Pacific Forum

Warming links between Taiwan and China are not a source of worry for the US and the best role for Washington in the current atmosphere of cross-strait rapprochement is to let things take their course, some US academics said at a forum in Taipei yesterday. Others, however, said the US could play a key role in helping to formulate confidence-building measures (CBM) between the Taiwanese military and the People’s Liberation Army (PLA).

Ralph Cossa, president of the Center for Strategic and International Studies (CSIS) Pacific Forum, said the US was “absolutely delighted that China and Taiwan are talking and working the question among themselves.”

HANDS OFF

“The best role [for the US] is to stand on the sidelines and cheer, and not to impede or try to help it,” said Cossa at the forum on Taiwan-US-China relations co-sponsored by the Foundation on Asia-Pacific Peace Studies (APS) and the Pacific Forum of the CSIS, a US think tank.

David Lampton, Chinese studies professor at Johns Hopkins University, said that only a small minority in Washington believed the US was nervous about increased ties between China and Taiwan.

Moreover, China is busy with internal affairs and hopes to avoid cross-strait problems, he said.

The panelists agreed that the government’s proposed economic cooperation framework agreement (ECFA) — a contentious trade pact between Taiwan and China — would be beneficial to the signers. But while transparency is the guiding principle in a democracy, it could be difficult in theory, especially in the midst of any negotiation process, they said.

The pan-green camp has said it does not oppose closer economic ties with Beijing, but worries the government has not provided a satisfactory explanation of potential effects the deal could have on the economy or sovereignty. While the Democratic Progressive Party has demanded the government postpone the signing, the government wants it signed sooner than later.

“The government is not that stupid and is doing everything to minimize the cost [of signing an ECFA],” said George Tsai (蔡瑋), a professor at the Sun Yat-sen Graduate Institute.

Although some US pundits said Washington has taken a hands-off approach in cross-strait development, Tamkang University professor Edward Chen (陳一新) called on the US to play multiple roles, such as that of promoter, facilitator, arbitrator, supervisor and guarantor in various phases of CBM negotiations between China and Taiwan.

For example, Chen said that at times of discord over the implementation of mutually agreed policies, the US could play arbitrator in encouraging both sides to exercise self-restraint. During the initial discussion phase, the US could be a facilitator by sharing experiences and advising Taiwan, he said.

Michael Green, the Japan chair at CSIS, said the US could help Taiwan gain leverage by approving the remainder of an arms package soon. The gesture would buttress Taiwan’s strength and minimize Beijing’s assumption that the US had shifted away from its longstanding security commitment to Taiwan.

While the panel acknowledged that so far the PLA had not shown much interest in establishing a comprehensive set of CBMs with Taiwan, there are other types of CBMs on reducing misunderstandings and the risk of accidents that might be more welcome, Cossa said.

CONDITIONS

Speaking earlier at the forum, APS president Chao Chun-shan (趙春山) said that at least three things must be completed before the political aspect of the cross-strait dialogue could begin — signings of an ECFA and a memorandum of understanding, a domestic consensus on the issue and acceptance by the international community.

“In the future, it may be possible to negotiate a cross-strait military trust mechanism or a cross-strait peace framework agreement. Before that happens, our government will listen to different opinions and comments in Taiwan and reach a mutual consensus while taking the interest of the US and other countries in this region into consideration,” he said.

Taiwan, US may waive visas: minister
　

By Jenny W. Hsu
STAFF REPORTER, WITH CNA
Saturday, Oct 17, 2009, Page 3
　

Minister of Foreign Affairs Timothy Yang (楊進添) said yesterday that Taiwan and the US were discussing the possibility of including Taiwan in a US visa waiver program, but he gave no specific timetable.

Yang made the remarks after attending the international seminar “Taipei-Washington-Beijing Relations under the Ma and Obama Administrations,” which was held in Taipei by the Foundation on Asia-Pacific Peace Studies and the Pacific Forum of the Center for Strategic and International Studies (CSIS), a US think tank.

“Both Taiwan and the US understand the importance of the visa waiver program, which is already under discussion by the two sides. However, I cannot give you a certain timetable,” Yang said.

Earlier at the forum, Yang said there were five facets of the new face of US-Taiwan relations.

They include working on the inclusion of Taiwan in the US visa waiver program, enhancement of bilateral security cooperation, economic ties and investment ties, and US support for Taiwan’s meaningful participation in the UN Framework Convention on Climate Change and International Civil Aviation Organization, Yang said.

It would be of mutual benefit to both Taipei and Washington to expand cooperation on issues of export control and weapons proliferation because the two sides have worked effectively together on the implementation of the container security initiative.

This entails a system of checking for illegal goods in shipping containers that leave Kaohsiung Port, he said.

At the forum, new American Institute in Taiwan (AIT) Director William Stanton complimented Taiwan’s progress in recent years and said with the Taiwan Relations Act as the basis of Taiwan-US relations, the US would remain a “dependable” friend and not waver from its commitment to Taiwan’s security, assuaging doubts of Washington’s intention to sell arms to Taiwan.

He said that because talks on US beef imports were coming to the final stage, Trade and Investment Framework Agreement talks could be held before the end of the year.

The US government and the US business community in Taiwan, he said, welcome improved cross-strait ties, which has increased Taiwan’s appeal to foreign investors.

Mayor opens Kaohsiung Film Festival
　

REFOCUS: Premier Wu Den-yih told lawmakers yesterday that Beijing should respect Taiwan’s choices and end its tourist boycott of Kaohsiung
　

By Shih Hsiu-chuan
STAFF REPORTER, WITH AGENCIES
Saturday, Oct 17, 2009, Page 4
　

Kaohsiung City opened its annual film festival yesterday, featuring a biopic about exiled Uighur leader Rebiya Kadeer despite protests from the tourism industry and China.

Four screenings of The 10 Conditions of Love about Kadeer, blamed by Beijing for ethnic unrest in her home region of Xinjiang in July, are scheduled during the two-week festival, organizers said.

The film was initially removed from the festival line-up after the local tourism sector complained about a steep drop-off in business amid reports of a boycott by Chinese tourists. But city officials decided to put the film back in the schedule just days after the central government barred a proposed visit by Kadeer.

A Chinese official in charge of Taiwan affairs confirmed this week that Chinese tour groups were avoiding Kaohsiung.

“Some forces in Kaohsiung joined hands with Tibetan and Xinjiang independence forces to create trouble and hurt China’s core interests,” said Fan Liqing (范麗青), spokeswoman of the Taiwan Affairs Office. “This hurt the Chinese people’s feelings and it’s only natural for them to show their dissatisfaction over this.”

Premier Wu Den-yih (吳敦義) told the legislature yesterday that the Chinese authorities should reconsider the tourist boycott, calling Fan’s remarks “inappropriate.”

Wu made the remarks when fielding questions from Chinese Nationalist Party (KMT) Legislator Lee Ching-hua (李慶華) during a question-and-answer session.

Saying that China should respect the choices made by Taiwan to safeguard human rights, freedom and democracy, Wu said China should also respect the rights of its people to travel where they wanted.

Intervention in the travel agency itineraries shows disregard for the tourists’ right to make their own travel plans, he said.

“It’s inappropriate for the government to interfere in tour group itineraries” he said, adding that if Chinese tourists were allowed to choose freely, Kaohsiung would be one of their choices.

Marketing was the key to attracting more tourists, Wu said, hinting that Kaohsiung should be more aggressive in promoting its tourist attractions in China.

Presidential Office angry over leaks
　

By Hsu Shao-hsuan
STAFF REPORTER
Saturday, Oct 17, 2009, Page 4

High-level Presidential Office staff were unhappy with leaks that led to reports President Ma Ying-jeou (馬英九) observed a missile exercise on Tuesday, sources said yesterday.

Citing a “reliable military source,” Chinese-language newspapers reported on Wednesday that a major missile exercise had been carried out on Tuesday at Jioupeng (九鵬) base in Pingtung County and that Ma had been among the observers.

The reports said the missiles tested included the Hsiung-Feng 2E (HF-2E), which has a range of around 600km and has not yet officially entered the military’s inventory.

Both the Presidential Office and the Ministry of National Defense declined to confirm or deny the reports on Wednesday.

Sources said yesterday that senior officials had ordered an investigation of the Presidential Office and the ministry to determine who leaked the information about the exercise and Ma’s attendance.

Sources said the timing of the leak was sensitive because the reported exercise came one day before the Mainland Affairs Council announced that Taichung had been selected as the venue for the fourth meeting between Straits Exchange Foundation Chairman Chiang Pin-kung (江丙坤) and president of China’s Association for Relations Across the Taiwan Straits, Chen Yunlin (陳雲林).

The Chinese-language United Evening News, meanwhile, reported yesterday that the missile tests had not been a success.

The ministry, in keeping with its usual practice, declined to comment on the paper’s story.

In his annual presidential address on Double Ten National Day, Ma said Taiwan would “never ignore the other side’s military threat despite significant improvements in cross-strait ties.”

China celebrated 60 years of Chinese Communist Party rule on Oct. 1 with a parade in Tiananmen Square that spotlighted its high-tech weapons, including intercontinental ballistic missiles.

The Control Yuan and scapegoating

Saturday, Oct 17, 2009, Page 8

For obvious reasons, all eyes have been on the Control Yuan’s review of the government’s response to Typhoon Morakot. Soon after the typhoon hit Taiwan and the devastation in the south became apparent, Control Yuan President Wang Chien-shien (王建煊) reacted to the government’s incompetent response with the classic line: “I was so angry that I wanted to scold and kill people, but I didn’t know who to blame.”

President Ma Ying-jeou (馬英九) did, however. His first public criticism was directed at the Central Weather Bureau (CWB). Someone or something had to be immediately accountable, and the easiest target was a bunch of civil-service meteorologists with no opportunity to defend their organization or their individual professionalism.

Wang, meanwhile, was able to compose himself and be more specific: “The Control Yuan will impeach the heads of government institutions who failed to improve the problems highlighted by the Control Yuan’s corrective measures.”

And this: “The Control Yuan is entitled to impeach heads of government agencies repeatedly until they step down, and to keep impeaching their successors until problems are resolved.”

Fine words, but judging from the Control Yuan report on the CWB’s handling of Morakot this week, it is not certain that those who acted negligently or incompetently will be identified. Worse, it is possible that scapegoating will be an acceptable substitute.

Try as it might, the Control Yuan report made no meaningful comment on professional aspects of weather forecasting — in particular, how to determine the volume of rainfall likely to hit specific locations that might lead to fatalities. The CWB cannot be held to account for natural phenomena for which no scientific technique offers reliable predictive assistance. Besides, the CWB is made up of meteorologists, not geologists — and certainly not soothsayers.

The Control Yuan’s corrective measures in some cases were laughable, including the quaint idea of a drain-cleaning reminder service for those who need such advice. Clearly, its investigators must adopt a more intelligent approach.

At a press conference on Wednesday, Control Yuan member Cheng Jen-hung (程仁宏) actually offered praise to CWB staff for their meteorological aptitude, but said they have poor public relations skills.

Cheng, who rode into the Control Yuan on the back of his leadership of the Consumers’ Foundation — a media-savvy organization that conducts unscientific “surveys” of consumer products and issues doom-ridden press releases — has, for one, carried over his hobby-horse approach to government accountability by focusing on insubstantial matters. No one should be surprised by this; Cheng, after all, once warned that the High Speed Rail was at risk of derailing, but we still don’t know why.

If an official culture of excessive blame and activist meddling continues, what public confidence that remains in the Control Yuan will sour and political influence could act as the casting vote where profitable.

Premier Wu Den-yih (吳敦義) may have detected the danger in this, not to mention the gross injustice. On Thursday last week, he made special mention of Daniel Wu (吳德榮), a senior forecaster and head of the CWB’s forecast center who retired early after its pitiful treatment at the hands of the president.

The premier said: “Launching attacks on civil servants who are faithful to their duties and perform well, sapping their morale, will negatively influence the growth of society and impede the nation’s progress. Civil servants should be appraised justly.”

Hear, hear. If only the Control Yuan, and the president, understood why.

China consolidates its lead in global trade
　

As China produces a diversified portfolio of low-priced and essential items, analysts say the country’s exports can hold up relatively well in a recession

By David Barboza
NY TIMES NEWS SERVICE , SHANGHAI
Saturday, Oct 17, 2009, Page 9

With the global recession making consumers and businesses more price-conscious, China is grabbing market share from its export competitors, solidifying a dominance in world trade that many economists say could last long after any economic recovery.

China’s exports this year have already vaulted it past Germany to become the world’s biggest exporter. Now, those market share gains are threatening to increase trade frictions with the US and Europe. The European Commission proposed on Tuesday to extend antidumping duties on Chinese, as well as Vietnamese, shoe imports.

China is winning a larger piece of a shrinking pie. Although world trade declined this year because of the recession, consumers are demanding lower-priced goods and Beijing, determined to keep its export machine humming, is finding a way to deliver.

The country’s factories are aggressively reducing prices — allowing China to gain ground in old markets and make inroads in new ones.

The most striking gains have come in the US, where China has displaced Canada this year as the largest supplier of imports.

In the first seven months of last year, just under 15 percent of US imports came from China. Over the same period this year, 19 percent did. Meanwhile, Canada’s share of US imports fell to 14.5 percent from nearly 17 percent.

Besides increasing its share of many US markets, China is increasing the value of exports in absolute terms in some categories. In knit apparel, for instance, US imports from China jumped 10 percent through July of this year — while US imports from Mexico, Honduras, Guatemala and El Salvador plunged 19 percent to 24 percent in each country, according to Global Trade Information Services.

A similar tale is told around the world, from Japan to Italy.

One reason is the ability of Chinese manufacturers to quickly slash prices by reducing wages and other costs in production zones that often rely on migrant workers.

Factory managers in China say US buyers are demanding they do just that.

“The buyers are getting more and more tough in bargaining for lower prices, especially American buyers,” says Liao Yuan (廖元), the head of international trade at the Changrun Garment Co, which is based in southern China and exports jeans to Europe and the US. “They offer US$2.85 per pair of jeans for a package of a dozen, when the reasonable price is US$7.”

Because China produces a diversified portfolio of low-priced and essential items, analysts say the country’s exports can hold up relatively well in a recession. Few other countries can match what has come to be called the “China Price.”

“China has a huge advantage,” says Nicholas Lardy, an economist at the Peterson Institute for International Economics in Washington. “They can adjust to market changes very rapidly. They have flexibility in their labor markets. And as consumers trade down the quality ladder, China can benefit.”

The expiration of textile quotas in large parts of the world this year has also allowed China to increase its market penetration.

But equally important are government policies that support China’s export sector — from Beijing keeping its currency weak against the dollar to its determination to subsidize exporters through tax credits and billions of dollars in low-interest loans from state-run banks.

The results have been impressive. All told, in the first half of this year, China exported US$521 billion worth of clothes, toys, electronics, grains and other commodities to the rest of the world.

FAVORABLE COMPARISON

Though that represented a 22 percent decrease from the first half of last year, it compares favorably with other major exporters. German exports, for example, have fallen 34 percent over the same period. Japanese exports were down 37 percent and US exports 24 percent, according to Global Trade Information Services.

Trading powerhouses like Germany are suffering from weaker demand for heavy equipment, automobiles and luxury goods. But the value of exports from oil-producing countries, like Russia and Saudi Arabia, has fallen even more.

One reason is that the price of oil has plummeted from last year’s record highs. But since oil is priced in dollars and the value of the dollar has fallen markedly, so have the value of US imports from these countries — more than 45 percent in the case of Russia’s exports to the world.

Meanwhile, US imports from Saudi Arabia have fallen 65 percent.

China’s market share gains are mostly at the expense of countries or regions like Japan, Italy, Canada, Mexico and Central America — in industries that China has long sought to dominate.

China’s share of furniture imports in the US has grown from 50 percent to 54 percent over the last year, while furniture exports to the US from Canada and Italy have plunged 40 percent from a year ago.

In Europe, Chinese textiles and apparel have gained market share in every major country, after the quota expiration in January.

Not long ago, Italy’s shoe imports were dominated by Romania; now China has a commanding share.

Japan once relied on electronics shipments to the US, but every year for the past decade Japan has lost market share to China. This year is no different. In 1999, electronics goods from Japan made up 18 percent of the US’ electronics imports. Today, that figure is down to 7 percent. China’s market share has climbed 10 percent to 20 percent from a year ago.

Together, the gains are helping China increase its immense trade surplus with the rest of the world, reviving worries about global trade imbalances — and once again putting the spotlight on China’s currency, the renminbi.

After letting its currency rise against the dollar, beginning in July 2005, China is once again pegging it closely to the dollar. As the dollar has fallen against other major currencies like the euro — about 15 percent since a year ago — Chinese imports have become more and more competitive.

Now, European officials are clamoring for China to reduce its flood of exports and even pressing for antidumping investigations.

APPRECIATE

The IMF is calling on China to rebalance its economy and allow its currency to appreciate against other major currencies.

The US — which for years complained about China’s weak currency and soaring trade imbalances — has largely been silent in recent months, analysts say, partly because Washington is trying to improve relations with Beijing at a time when it desperately needs China to purchase US debt.

“Obama’s interest is not to push China to appreciate the currency, but to get them to pay the bills,” Tao Dong (陶東), an economist at Credit Suisse says, referring to China’s purchases of US debt.

Beijing worries that raising the value of its currency could be catastrophic, damaging the huge export sector and diluting the effect of the government’s aggressive stimulus package.

But the country’s leaders are well aware of the need to shift the economy away from heavy dependence on exports and toward stronger domestic consumption.

China is eager to move up the value chain, by selling higher-priced goods like computer chips, aircraft and pharmaceuticals — all of which would bring better-paying jobs and healthier economic growth.

Moreover, many economists say that as Chinese consumers become richer, they will buy more of their own goods. And as the dollar falls, it will make US exports more competitive globally, including in China. Those trends together could eventually help rebalance global trade — which became overly reliant on Americans buying cheap Chinese goods and China buying US debt.

Right now, Beijing worries about growing trade frictions with its biggest trading partners, the EU and the US, and the possibility of some countries initiating protectionist measures.

Chinese exporters, meanwhile, fear that even as they gain market share the pressure to produce at low prices will hurt them and the quality of their products in the long run.

Liao at the Changrun factory says many producers are essentially scavenging to source raw material.

“Some even go to old factories to collect abandoned fabrics from old stock, so they can save two-thirds of the cost on raw material,” she says. “These fabrics are in very bad shape. They won’t wash, and easily wear out.”

But the discounting period may be here for a while with many economists forecasting a lengthy period of slow growth in Europe and the US.

“China is going to get stronger,” Tao says. “Its competitors are getting weaker in the downturn. And the Chinese state has helped bail out some industries, like the auto industry; so in the future some new industries may emerge as exporters.”

Oyster omelet and meatball are the recipe for love

Saturday, Oct 17, 2009,Page 13

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A fascinating love story involving meatballs is doing the rounds online. It all started when a woman visited Hsinchu’s Cheng Huang Temple for a snack with a friend. As she chatted, she poked a chopstick into a meatball. At some point during the conversation, she waved her hands too hard and the meatball flew directly onto the oyster omelet of the man sitting at the next table. Although she offered to buy him a new meal, the man had other ideas and said to her, “Just give me your MSN address as compensation.” Following this unusual first encounter they fell in love and now a wedding is on its way.

Hsinchu Mayor Lin Jung-tzer said that he would love to be the presiding witness to the wedding if they agreed, and that he would buy the couple a big box of five-color lucky meatballs as a gift. He was looking for the two publicly, hoping that the couple could contact him.

According to the owner of Chuang Chia, a café inside the temple, only two cafes sold meatballs and oyster omelets. Since all the tables were within spitting distance of each other, such “flying meatballs” are a common sight, she said. The owner added that although the two did not go back to the café to announce their good news, the news of the wedding was still warmly welcomed.

According to the Internet user who first broke the story, her female friend visited her in Hsinchu three years ago. As a Hsinchu local, she took her friend to the temple for some snacks — including oyster omelets, fried rice noodles, and meatball soup.

Her friend’s habit was to poke a chopstick into a meatball when biting it. When the conversation became animated she started to wave her hands around, forgetting that the meatball was loosely attached to her chopstick. The meatball flew off and dropped on top of the oyster omelet of the man sitting at the next table. She blushingly apologized and offered to get him a new omelet. But rather than accept a replacement dish, the cheeky chap asked her to “compensate” for his loss with her MSN address, and surprisingly she acquiesced.

Not long ago, the friend announced that the “meatball couple” were intending to tie the knot next summer. The friend also said that they would definitely offer meatball soup at the wedding banquet, as well as Hsinchu meatballs as gifts to all the wedding guests. She went on to say that as a Hsinchu resident, she was proud to be able to promote the famous meatballs of her hometown.

(LIBERTY TIMES, TRANSLATED BY EDDY CHANG)