20131218 Promotion of Taiwan to US needs rethinking
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Promotion of Taiwan to US needs rethinking

By James Wang 王景弘

Former vice president Vincent Siew (蕭萬長), whose idea of a “single Chinese market” is much to President Ma Ying-jeou’s (馬英九) liking, led a Taiwanese business delegation to the US last month. In a speech he made at a seminar in Washington, Siew replayed an old and highly unconvincing tune, saying that US businesses could gain access to the Chinese market by way of Taiwan, using the nation as a “springboard.”

Siew’s “springboard” theory is unlikely to be met with anything but derision. If the investment climate is really that good, why do businesses keep moving to China? If Taiwanese entrepreneurs can go straight to China, what is to stop US businesses doing the same thing? Why would they want to go there by way of Taiwan?

Maybe Siew’s “springboard” theory is about the convenience that a shared language offers to Taiwanese entrepreneurs in China, and the “special relationship” that exists between the two sides of the Taiwan Strait — things that he thinks might be helpful to US companies seeking a foothold in China. However, speaking the same language has only lulled Taiwanese investors in China into being passive partners, rather than being a real advantage. There are a lot of people in China whose command of English is much better than what Taiwanese businesspeople can muster, and US companies have employees who speak better Beijing-style Mandarin than Taiwanese businesspeople do.

And the “special relationship” has lulled Taiwanese investors in China into a state in which they are incapable of running a business except by pulling strings. Any privileges they may gain through bribery and playing along with China’s united-front strategy are limited and fragile.

US businesses have more sophisticated ways than their Taiwanese counterparts of currying favor with the rich and powerful in China. There are as many people in China as there are fish in the sea who have the ear of those at the top and are willing to pimp for US companies. A lot of high-up Chinese officials have children who study in the US, where companies recruit them on generous salaries because of their parents’ status. These “princelings” can help their employers by knocking on all the right doors in China, so why would US companies bother with Taiwanese businesspeople’s third-rate connections?

That was not the only unrealistic thing about Siew’s speech. The Chinese business environment is not what it used to be. Rising production costs and bureaucratic corruption are persuading many US businesses to pull out of China and return home, and US President Barack Obama’s administration is encouraging that trend.

Japanese businesses were the first overseas investors to enter the Chinese market, but the “go West” vogue that lasted for more than two decades has turned southward these days. The Japan Bank for International Cooperation publishes annual surveys on Japanese manufacturers’ overseas investment intentions for the next three years. China, which had been the No. 1 investment destination for 20 years in a row, has dropped to fourth place in this year’s survey with only 24.8 percent of planned overseas investment. India, Indonesia and Thailand take the top three places and ASEAN countries account for nine of the top 20 investment targets.

The “go South” policy that former president Lee Teng-hui (李登輝) advocated never really got off the ground. Instead, it is now Japan that is doing what he suggested. While the Japanese government and businesses have woken up, the Ma government still dreams about Taiwan being a “springboard.” It is thanks to useless leaders like these that the nation is going to rack and ruin.

James Wang is a political commentator.

Translated by Julian Clegg

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