US urged to press China on arms
　

CONGRESSIONAL MESSAGE: The US-China Economic and Security Review Commission report says that China’s military is a ‘clear and present threat’ to Taiwan’s autonomy
　

By William Lowther
STAFF REPORTER, WASHINGTON
Friday, Nov 20, 2009, Page 1

In a major report scheduled to be released yesterday, a US congressional commission urges US President Barack Obama to encourage China to “demonstrate the sincerity of its desire for improved cross-strait relations by drawing down the number of forces, including missiles, opposite Taiwan.”

The US-China Economic and Security Review Commission report also recommends that Congress encourage Obama to strengthen bilateral economic relations between the US and Taiwan and work with Taipei to modernize its armed forces, with particular emphasis on its air defense needs.

Coming at the end of Obama’s first Asian tour, the 367-page report from the commission — a bipartisan group established in 2000 to investigate, analyze and provide recommendations to Congress — could strengthen support for Taiwan on Capitol Hill.

It may have little impact in the White House, however, where — according to some political analysts — the Obama administration appears reluctant to do anything that could upset Beijing.

In a 13-page section on Taiwan, the report says that despite apparent progress in cross-strait relations, Beijing has shown no signs of stemming its buildup of military capacities vis-a-vis Taiwan “increasing the disparity between China and Taiwan’s respective military capabilities.”

It reveals that a study done for the commission by the Science Applications International Corp found that China’s military had become a “clear and present threat” to Taiwan’s autonomy because of significant improvements in its missile, air and naval capabilities.

“In the event of a military conflict between China and Taiwan, one possible option that the PLA [People’s Liberation Army] could employ is a missile saturation campaign in order to soften the island’s defenses,” the report says.

“The PLA has a large inventory of ballistic and cruise missiles, as well as anti-radiation attack drones — used to knock out radar installations — at its disposal for such a campaign,” the report says.

“China’s 1,100-plus short-range ballistic missiles targeting Taiwan are sufficiently accurate to pose a serious threat to a wide range of immobile targets on the island, such as command and control facilities, air defense nodes, air bases, naval bases and political targets,” it says.

The report says that the PLA would also likely use ground and air-launched land-attack cruise missiles to hit hard-to-strike high-value assets while anti-radiation attack drones would target hidden air defense radars.

It says Taiwan’s “limited missile defenses” would be incapable of providing sustained protection and would likely be exhausted quickly.

“Taiwanese cruise missiles could be used to strike mainland missile repositories, command and control facilities and possibly even air bases or ports,” the report says.

“Taiwanese aircraft are capable of attacking the mainland. However, the Taiwanese military is likely to conserve these for air defense purposes instead,” it says.

After initial attacks, the report forecasts, the PLA could be expected to launch a campaign to seize air superiority.

“The success of seizing air superiority is critical in determining the outcome of any large-scale use of force against Taiwan,” the report says.

“Over the years, Taiwan’s air capabilities relative to China’s have begun to shrink. In contrast to the growing size and quality of the PLA’s fighter force, Taiwan has not substantially upgraded its fighter force in the past decade and may not do so in the near future,” it says.

The report notes that although Taiwan wants to buy 66 F-16C/D fighters from the US, “it is unclear whether the Obama administration will agree to sell these or other modern aircraft to Taiwan.”

The report says the central focus of China’s naval modernization efforts since the 1990s has been to deter Taiwanese independence.

“Taiwan’s independence ultimately challenges the Chinese Communist Party’s [CCP] continued rule in Beijing, because the CCP has partially staked its legitimacy on reunification with Taiwan,” the report says.

Taiwan’s continued de facto independence, the report says, hinders China’s emergence as a regional power since it would limit the PLA’s strategic space.

“For Beijing, a key component of ensuring that Taiwan does not declare independence requires deterring, denying or delaying the United States from intervening on Taiwan’s behalf,” the report concludes.

“Rear Admiral Michael McDevitt testified to the commission that China aims to keep an approaching force from closing to within striking range of the Chinese mainland and the Taiwan Strait — a sentiment echoed by several experts,” it says.

“Cortez Cooper, a senior international policy analyst at the RAND Corporation, stated that a goal of China’s naval modernization is to vastly improve the capability to hold US naval formations at risk in the Western Pacific and to delay or deny their entry into a Taiwan theater of operations,” it says.

Chinese spies ‘aggressively’ stealing US secrets: report

AP , WASHINGTON
Friday, Nov 20, 2009, Page 1

A US congressional advisory panel said yesterday that Chinese spies are aggressively stealing US secrets to use in building up Beijing’s military and economic strength.

The US-China Economic and Security Review Commission, set up by Congress in 2000 to advise, investigate and report on US-China affairs, said US officials believe Chinese spying is “growing in scale, intensity and sophistication.”

“China is the most aggressive country conducting espionage against the United States,” the report says.

Wang Baodong (王寶東), spokesman for the Chinese embassy in Washington, called the spying allegations “baseless, unwarranted and irresponsible.”

He called the commission’s suggestion that China’s navy is being built up to challenge the US in the Pacific a “Cold War fantasy.”

Chinese military spending, he said, is only a fraction of Washington’s.

More generally, Wang criticized the commission for recycling old, unproven allegations and for issuing an annual report “aimed at misleading the American public.”

The report said China is the origin for much of the sharply rising malicious computer attacks against the US this year.

China’s increased targeting of US government and defense computer systems, the report said, could “destroy critical infrastructure, disrupt commerce and banking systems and compromise sensitive defense and military data.”

Among the commission’s recommendations are for Congress to review the US ability to meet the “rising challenge” of Chinese spying and to fend off computer attacks.

AIT chief will visit to brief officials on Obama’s China trip
　

By Jenny W. Hsu
STAFF REPORTER
Friday, Nov 20, 2009, Page 1

American Institute in Taiwan (AIT) Chairman Raymond Burghardt will be in Taipei for a four-day visit starting on Monday to brief the government on US President Barack Obama’s recent trip to China, Deputy Minister of Foreign Affairs Shen Lyu-hsun (沈呂巡) said yesterday.

Shen told the legislature’s Foreign and National Defense Committee that the US has not backtracked on its commitment to Taiwan, even though the Taiwan Relations Act (TRA) was not mentioned in the US-China joint statement issued during Obama’s visit to Beijing.

The Democratic Progressive Party (DPP) has voiced concern about the omission.

Shen said that although the TRA was not specifically raised in the statement, Obama spoke about it in the joint press statement he gave at the Great Hall of the People in Beijing with Chinese President Hu Jintao (胡錦濤) on Tuesday.

Obama’s gesture illustrated that the US has not wavered from its commitment to Taiwan or its “one China” policy, Shen said, rejecting DPP claims that the US is moving in a more China-centric direction at the expense of Taiwan’s sovereignty.

“It is important to listen to what the Americans are saying, but it is just as important to watch what the Americans are doing. Sometimes actions speak louder than words,” he said.

DPP Legislator Tsai Huang-liang (蔡煌瑯), however, said that in addition to the absence of any mention of the TRA in the document, the statement’s reference that “the two countries reiterate that the fundamental principle of respect for each other’s sovereignty and territorial integrity is at the core of the three US-China joint communiques which guide US-China relations” means that the US has indirectly recognized Taiwan as part of China.

“The Ministry of Foreign Affairs must protest to the US and demand a clear explanation and a commitment that Taiwan is not part of China,” Tsai said.

US lawmakers want data on weapons sales to Taiwan
　

CAPITOL HILL CURIOSITY: Representative Ileana Ros-Lehtinen and seven collegues have submitted a bill to require the administration to brief Congress on arms sales
　

By William Lowther
STAFF REPORTER IN WASHINGTON
Friday, Nov 20, 2009, Page 1

Senior members of the US House of Representatives have introduced a bill that would force US President Barack Obama to consult with Congress and keep it informed about potential arms sales to Taiwan.

Sources said that one immediate impact would be to pressure the White House to make a decision on Taiwan’s request to buy 66 advanced F-16 C/D fighters.

Advisers to Obama have recently indicated that at this stage a decision is not likely to be made until well into next year.

The new bill — H.R. 4102 — was introduced by Representative Ileana Ros-Lehtinen, who is the ranking member of the House Foreign Affairs Committee, and Taiwan Caucus co-chairs Shelley Berkley, Phil Gingrey and Lincoln Diaz-Balart plus four other representatives.

If passed, it would require the Obama administration to provide detailed briefings to Congress on all US arms sales to Taiwan and would “mandate briefings no later than 90 days after the date of the enactment and at least annually thereafter.

In addition the secretary of state, in consultation with the secretary of defense, would be required to inform Congress about any discussions between any US government officials and the government of Taiwan.

The briefings must include any potential transfer of weapons or defense services to Taiwan.

The idea is to ensure that Congress is fully informed of the administration’s arms talks with Taiwan and is not surprised — as has happened in the past — by White House decisions coming out of the blue.

The introduction of the bill was timely “because Taiwan supporters are disturbed by President Obama’s statements in China,” said Bob Yang (楊英育), president of the Formosan Association for Public Affairs, a group based in Washington.

“He failed to mention the Taiwan Relations Act [TRA] while saying that the US respects China’s sovereignty and territorial integrity through the three joint communiques. That’s likely to embolden China to press even harder her spurious claim over Taiwan,” Yang said.

“Such statements seriously undermine US legitimacy to continue providing defense articles and services to Taiwan as codified in the TRA,” he said.

“For the past few years, members of Congress have been expressing strong concern about the stalemate in US arms sales to Taiwan. Their repeated appeals to the administration have gone unheeded. Annual briefings, as mandated by this bill, will reassert Congress’ prerogative to co-determine with the president the nature and the quantity of defense articles and services sold to Taiwan,” Yang said.

ECFA will reduce chance of war: Ma
　

LEARNING TO LIVE TOGETHER: The president said that his administration was not especially friendly with China, but ‘we still need to do business with them’
　

By Ko Shu-ling
STAFF REPORTER
Friday, Nov 20, 2009, Page 3

President Ma Ying-jeou (馬英九) yesterday defended his plan to sign an economic cooperation framework agreement (ECFA) with Beijing, saying that closer cross-strait business ties would reduce the possibility of conflict.

Ma said the planned ECFA was not an attempt to lean toward China, but a necessity for the development of Taiwan.

Taiwan so far has signed free trade agreements (FTA) with five of its diplomatic allies, but the trade volume with those countries combined make up less than 1 percent of the country’s total trade, Ma said.

“We must sign FTAs with our major trading partners,” he said while meeting leaders of the Taiwan Federation of Industry, Taiwan Provincial Industrial Association and regional industrial associations at the Presidential Office yesterday.

“They are, in order of trade volume, the mainland, Japan, the US, Southeast Asian countries, the European Union, New Zealand and Australia. That is why we want to sign an ECFA with the mainland,” he said.

He nevertheless said he was uncertain whether other countries would sign FTAs with Taiwan after it clinched an ECFA with China.

“It will reduce the chance of seeing Taiwan marginalized if we sign an ECFA with the mainland,” he said. “I cannot guarantee that other countries will want to sing FTAs with us if we sign an ECFA with Beijing, but I believe we will see the abatement of obstructions and a boost to the chances of peace.”

The more business Taiwan does with China, Ma said, the more secure cross-strait peace becomes, he said.

Ma said that as bilateral trade with China amounted to US$130 billion before he took office in May last year, it was bound to put Taiwan in an adverse position if there were no framework in place to make bilateral trade and investment more efficient and fair.

As the ASEAN-plus-One is set to take effect in January, Ma said there will be an ASEAN-plus-Three, an ASEAN-plus-Five or even an ASEAN-plus-Six in the future.

“If we don’t sign the ECFA with China, we have to pay higher taxes for everything we export to China and it will deal a significant blow to our businesses,” he said. “It is for the good of Taiwan’s future development.”

Ma said his administration was not especially friendly to China.

“Even if we are not, we still need to do business with them. It is that simple,” he said.

Ma said there were advantages and disadvantages in signing the planned pact, but added that his administration “will only do it when the advantages outweigh the disadvantages.”

The president promised that the government would map out measures to take care of industries adversely affected by any deal, while including the “early harvest” article in the proposed pact to benefit certain businesses.

Ma said the ECFA would be completed in a piecemeal manner, similar to the FTA signed between China and ASEAN countries, which was signed in 2002 but did not go into effect until the following year.

As Premier Wu Den-yih (吳敦義) has said, the government will only push an ECFA in line with the principle that “the country needs it, the public supports it and the legislature supervises it,” Ma said he would honor Wu’s promise.

He added that the government would make public its content “at an appropriate time, brief the legislature and let the lawmaking body review it.”

“If it doesn’t pass the legislature, it will not be implemented,” he said. “We will do our best to be as transparent as possible. Please rest assured that we will take a Taiwan-centered approach while furthering the public’s interests.”

Ma administration rolls over again

Friday, Nov 20, 2009, Page 8

This government’s ability to capitulate at the drop of a hat when dealing with China never ceases to amaze.

The latest example came on Friday last week when Financial Supervisory Commission (FSC) Chairman Sean Chen (陳冲) told legislators that he would not sign the cross-strait financial memorandum of understanding (MOU) if China failed to respect Taiwan’s request that his full official title appear on the document. He added that he would rather not sign at all if doing so would put “national sovereignty on the line.”

Yet, just three days later, Chen went ahead and signed despite the absence of his title — the MOU reduced to a deal between two financial regulators rather than two governments.

The last 18 months has shown President Ma Ying-jeou (馬英九) and his administration’s definition of “defending sovereignty” appears to be vastly different from that of most ordinary Taiwanese, or anyone else for that matter.

From the signing of the numerous cross-strait agreements to the treatment of flag-waving Republic of China protesters during Chinese negotiator Chen Yunlin’s (陳雲林) visit last year, time and again the Ma administration has rolled over like a puppy having its belly scratched when faced with Chinese demands.

Dissenting voices are always met with the mantra that we should “put aside our differences” on economic matters that will benefit the country as well as references to the numerous “achievements” the Ma administration has made.

The problem is that — apart from a few industrialists and tour operators — who can honestly say they have profited from Ma’s policy of cross-strait capitulation?

Another problem is that it is very obvious that China does not view these deals in the same manner, with Beijing’s officials under no illusions as to where things are heading. Who can forget, for instance, Chinese Consul-General to Fukuoka Wu Shumin (武樹民) saying to Democratic Progressive Party Legislator Hsiao Bi-khim (蕭美琴) in Japan in May: “What international space? Ma Ying-jeou accepts the ‘one China’ principle, so we give him international space.”

Even US academics appear to be more aware than Ma, with US economist Daniel Rosen telling a conference in Washington on Tuesday that China is not interested in the economic gains from an ECFA; instead, Chinese officials view it merely as “lay[ing] the groundwork for a ‘happy ending.’”

This conclusion was backed by US-Taiwan Business Council president Rupert Hammond Chambers, who said China’s overarching goal was unification and that all its policies, including an ECFA, were channeled in that direction.

In the end it comes down to the question of who is fooling who?

Is China fooling the Chinese Nationalist Party (KMT) or does the KMT believe it is fooling China? The latter is harder to believe, given the KMT’s poor record in dealing with the Chinese Communist Party.

The other option could be that Ma and his administration are fully aware of what is going on and are engaged in an intricate game to see how far they can push Taiwan toward unification without provoking the electorate — the vast majority of whom are against such an outcome.

This would certainly be in line with Ma’s oft-stated preference for eventual unification and his position as chairman of a party that is colluding with Beijing to stifle any other option.

This would also explain the capitulations.

ECFA might make the rich richer
　

By Wu Hui-lin 吳惠林
Friday, Nov 20, 2009, Page 8

Since the 1997 return of Hong Kong to China, the population of the territory, with its already high population density, had grown to 7 million last year because of immigration from China, a recent media report said. In 2003, Hong Kong and China signed a Closer Economic Partnership Arrangement (CEPA) linking their economies more closely to each other. In its wake the gap between rich and poor widened and social problems increased in Hong Kong.

At the end of last month, the US magazine Business Week cited the latest report from the UN Development Program, which showed that Hong Kong had the largest wealth gap of all advanced economies. The report compared the difference between rich and poor around the world using the Gini coefficient. Hong Kong has passed 0.4, a level that is generally seen as a warning sign.

The report said that while Hong Kong has a large number of wealthy people, it also has one of the largest public housing sectors in the world, and, except in the case of foreign maids, there is no minimum wage.

The number of people living in poverty has increased to 500,000 in the 10 years since Hong Kong was returned to China, figures from Hong Kong’s Society for Community Organization show. This indicates that the government’s theory that wealth would trickle down to poorer people has failed and that the income of the wealthy does not benefit the poorer levels of society. Instead, the rich are getting richer while the poor are getting poorer.

Why does Hong Kong face these issues? It is closely related to ample capital and speculation in the housing market. The best-selling houses in Hong Kong these days are those priced at around HK$6 million (US$774,000), the threshold for Hong Kong’s Capital Investment Entrant Scheme. Owing to the UK’s past rule in the city, areas such as the education system and social welfare are still much better than in China. Coupled with a passport from the Hong Kong Special Administrative Region not being subject to as many restrictions around the world as a Chinese passport, many senior officials and businesspeople from China have invested the required HK$6 million to gain Hong Kong residency. Many Chinese have bought houses there and then hired immigration consultants to help them immigrate to Hong Kong.

Because many areas of Hong Kong have been opened up to China as a result of the CEPA, corrupt Chinese officials have injected large amounts of dubious cash into Hong Kong. So long as they can launder their money, they do not care whether the cost of housing is reasonable. Once they have laundered their money, it is sent back into China. All this dirty money means that Hong Kong has not benefited from the influx of cash, and it also means many young people will never be able to afford a house.

Taiwanese should pay close attention to Hong Kong’s experience because the administration of President Ma Ying-jeou (馬英九) is in the process of bringing in Chinese investment and signing an economic cooperation framework agreement (ECFA) with China.

Economic benchmarks are indicating that the economic freefall has come to an end, but this is no more than a reflection of the financial situation. Large amounts of capital are leading to stock market and housing speculation, while income distribution over the past 10 years has been highly imbalanced.

Taiwan’s richest 20 percent continues to be more than six times richer than the poorest 20 percent. The Gini coefficient hovers between 0.34 and 0.35, unemployment has broken through 6 percent and salary increases in the industrial and service sectors since 1991 has lagged significantly behind economic growth figures. Since 2000, salary growth has slowed further and even began to drop. In addition, housing prices have been increasing recently.

In addition to idle private capital and a great influx of foreign hot money, the main reason for these increases is the return of the capital of Taiwanese businesspeople. This raises the question of what would happen if astronomical sums of Chinese capital investment were to also flow into Taiwan.

The Council for Economic Planning and Development, which has realized the seriousness of the situation, called a symposium to discuss falling salaries, rising housing costs and deteriorating income distribution. A worried attendant said that if even Hong Kong with its sound legal system could be turned upside down by dirty money from China, then if Taiwan were to sign an ECFA with China without knowing what it is doing, wouldn’t those developers laugh all the way to the bank as speculation drives prices for their development plans in Taipei, Kaohsiung and Taoyuan sky-high, while Taiwan’s young people continue to suffer from the economic crisis and might never be able to afford their own house. Urban residents are certain to be the hardest hit.

So, will an ECFA be a CEPA? Will Taiwan rapidly turn into a second Hong Kong? These are issues that Taiwanese should pay close attention to.

Wu Hui-lin is a researcher at the Chung-Hua Institution for Economic Research.

SEF-ARATS talks subvert Taiwanese sovereignty
　

By Lai I-chung 賴怡忠
Friday, Nov 20, 2009, Page 8

The resumption of talks between the Straits Exchange Foundation (SEF) and China’s Association for Relations Across the Taiwan Strait (ARATS) has been flaunted by President Ma Ying-jeou (馬英九) as one of his major political achievements. With the fourth round of talks between SEF Chairman Chiang Pin-kung (江丙坤) and ARATS Chairman Chen Yunlin (陳雲林) scheduled for next month, how should we assess these high-level talks?

The agreements signed during the previous three rounds of SEF-ARATS talks were all limited to economic issues, ranging from cross-strait postal services and regular flights to Chinese tourists and investment coming to Taiwan. However, now there are reports that the regular flight services may be reduced. Not only is the inflow of Chinese tourists to Taiwan unsteady, but China’s political maneuvers include its tourist boycott of Kaohsiung following the screening of a documentary on World Uyghur Congress president Rebiya Kadeer at the Kaohsiung Film Festival earlier this year. The contaminated Chinese milk powder scandal also remains to be settled.

All this suggests that these economic agreements with China did not benefit the Taiwanese economy, but instead have begun edging out existing foreign economic and trade cooperation.

Furthermore, the SEF-ARATS talks have thrown light on problems facing Taiwanese democracy. Since the four agreements reached during the second round of talks circumvented legislative review through technical measures, future cross-strait agreements will probably be treated in the same way. Referendum proposals on legislative oversight initiated by civic groups are blocked by the administration.

This practice of dodging legislative supervision has not only led to a confidence crisis for the Ma government, but people have also started to question the democratic system’s ability to defend their right to self-­determination — another root cause of the problems surrounding the government’s plan to relax restrictions on US beef imports.

The previous SEF-ARATS talks have systematically sabotaged Taiwan’s sovereignty. To pave the way for Chen’s visit to Taipei last year, Ma told the international media that Taiwan was not a country, and, worse yet, agreed that Chen would not have to address him as “president” in front of international media outlets.

Ma denied the nation’s status during the second round of SEF-ARATS talks, and now has apparently begun to accept Beijing’s “one China” principle in the run-up to the fourth round of talks. This is contradictory to the position he held during his term as Mainland Affairs Council vice chairman that the Republic of China is a sovereign, independent nation that is not subordinate to the People’s Republic of China (PRC).

Although only economic issues will be discussed at the coming round of talks, the political significance has been emphasized since Chinese President Hu Jintao (胡錦濤) pledged to complete unification with Taiwan in his address on the 60th anniversary of the PRC.

The meeting between then-SEF chairman Koo Chen-fu (辜振甫) and then-ARATS chairman Wang Daohan (汪道涵) in the 1990s highlighted the equal status of China and Taiwan as well as Taiwanese democracy, whereas the recent SEF-ARATS talks have witnessed Taiwan denying its own sovereignty and being marginalized.

In the face of this great crisis, let us support the People’s Sovereignty Movement and their attempt to prevent the SEF-ARATS talks from harming Taiwan even further.

Lai I-chung is director of foreign policy studies at the Taiwan Thinktank.