Thursday, February 04, 2016

Blog Breakin'

I am on vacation for the next couple of weeks, so I won't be posting here unless something super-major happens. Enjoy the many great websites and blogs about Taiwan like Letters from Taiwan,, Thinking Taiwan, Frozen Garlic, Taiwan in Cycles, and the Facebook Taiwan News in English Group.
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Wednesday, February 03, 2016

Paper on Parade: Political Economy of Cross-Strait Relations: is Beijing’s patronage policy on Taiwanese business sustainable?

A farm above Namaxia.

Bloomberg ran a story this week on Taiwanese businessmen who had been speculating in Yuan derivatives and got burned when the Chinese economy slumped. So many years of articles explaining that derivatives are a bad idea, and people are still buying them. But the loss was like a metaphor for dealing with China: initial gains, followed by steep costs...

Time again for this blog's regularly irregular feature, Paper on Parade. A friend flipped me this article on Taiwanese businessmen in China: Yi-Wen Yu, Ko-Chia Yu and Tse-Chun Lin (2016): Political Economy of Cross Strait Relations: is Beijing’s patronage policy on Taiwanese business sustainable?, Journal of Contemporary China, Feb 2016. It discusses the failure of Beijing's policies for Taiwanese business and to use business as a pathway to annexing Taiwan, a failure thrown into stark relief by the refusal of Taiwanese businessmen in China to come home to vote for the pro-China party. The authors write:
Via quantitative analysis and interviews, this article has found that things have been moving in a different direction: the rise of economic nationalism and local protectionism is undermining and constraining the credibility and sustainability of Beijing’s patronage policy. The new story is that with the growth of Chinese state-owned enterprises (SOE) and local private firms, Taiwanese businesses are being crowded out of China’s market. As a result, cross-Strait economic integration seems to have entered a period of stasis with regard to both direct investment and trade. Meanwhile, with the growth of nationalism, opposition to the patronage policy from China’s hawks and society has been emerging. Lastly, Taiwanese business, as a strategic linkage community targeted by Beijing, is losing its clout on both sides of the Strait, as well as its role as leverage in cross-Strait relations.
The article reviews two basic models of the Cross-Strait dynamic, and shows that both assume that Beijing has absolute control over its own domestic actions. They then point out three assumptions that many of us have attempted to refute over the years, especially the inevitability thesis:
In summary, most of the existing literature is based on three assumptions: firstly, domestic constraint on Beijing’s Taiwan policy is limited or meaningless; secondly, the growing economic integration is inevitable; and thirdly, Taiwanese business groups could be a leverage in cross-Strait relations.
What are the domestic constraints?
since the rise of economic nationalism and local protectionism in mainland China, local governments and economic departments have selectively ignored Beijing’s political patronage policy towards Taiwanese business and turned to favor SOEs and local firms. As a result, Taiwanese business has been crowded out of the Chinese market.
The article points out that economic nationalism in China has made it difficult to sell the idea of economic privileges for Taiwanese to Chinese actors. The authors also observe that the same process is happening in Taiwan -- the cooperation between Taiwanese big business and the CCP has been met with economic nationalist resistance in Taiwan, and Big Businessmen were unable to create a victory for the KMT in 2014 (and as we have seen, in 2016). Parallel domestic constraints affect both Chinese expansionist parties in their respective domains.

This same protectionism is occurring at the local level in China. In the 1990s Taiwanese businessmen were courted and could get tax breaks, land, and favors from local governments. But that "golden age" is long gone. Local governments now favor local state owned enterprises and local businesses over Taiwanese.

This development is important, because it swamped the effects of Ma Ying-jeou's alliance with the CCP after 2008. The authors note:
Yet, an interesting finding is that prior to the enforcement of the New Corporate Income Tax Law to all companies in 2008, Taiwan businesses’ tax payments had already been going up since 2005.14

This finding coincides with the story that the authors learned from respondents: the golden age of Taiwanese businesses in mainland China began to fade at the very beginning of this century because of China’s industry policy (腾笼换鸟政策) and local protectionist sentiment.
The authors compare Chinese firms, SOEs, and Taiwanese firms by subsidies, taxes, and performance, and the same trends are evident across all data sets: until 2002, Taiwan firms outperformed local firms and SOEs. By 2007, Taiwan firms were only outperforming SOEs. The article collects data from several sources, and summarizes:
Due to limits of the database, this article only can do panel data analysis until 2009. To trace TDI’s performance in the following years, this article employs China Credit Information Service, Ltd’s ‘Annual Report of Taiwan Business 2012, 2013 and 2014’.18 The reports indicate that the performance of Taiwanese businesses in mainland China has been going down, consistent with the trend presented in the panel data analysis above. They reveal that 649 Taiwanese listed companies (their investment in China) saw their profits plunge by 22.72% in 2012 compared to 2011. Moreover, 40.5% of non-listed companies were running a deficit on their investment in the mainland. In the 2013 report, the editor uses ‘The collapse of Taiwanese business in China’ to describe the tough situation: 55% of Taiwanese listed companies in mainland China had a deficit; over 70% of small–medium size Taiwanese companies in the mainland had losses. In 2014, over 60% of listed companies had losses in the Chinese market. Such lasting deficits in the Chinese market have led many Taiwanese businesses to shut down, shrink or relocate their investment to other countries. According to a report by the Chung-Hua Institution for Economic Research,19 over 60% of Taiwanese businesses had no plans to inject new investment into mainland China during 2011–2015 (the duration of China’s 12th Five-Year Plan).
The rise of Chinese business has meant that the old pattern of Taiwanese firms importing intermediate goods into China for final assembly is dead: the business model has shifted from vertical integration of Chinese firms in Taiwanese supply chains to direct competition, because China has introduced policies to cause this shift, and its SOEs have been reformed. The authors write:
Meanwhile, the growth of cross-Strait trade also has been slowing down. Figure 6 shows that the contribution rate (to Taiwan’s GDP) of exports to China has seen a dramatic drop during 2011–2013 compared to 2003–2007.
Yes, that's right -- after ECFA, exports to China had dramatically less effect on Taiwan's GDP even as cross-strait trade allegedly increased. And if your businesses are contributing less to GDP, you have less political clout. It's no wonder most Taiwanese businessmen in China stayed there this election.

In China the Taiwan Affairs Office (TAO) coordinates the policies under which Taiwanese businessmen are supposed to get patronage, but in reality its power is weak and it can do little against regional and local government preferences for new investors, local businesses, and local SOEs. Taiwanese businessmen can do little to compete with these alliances. The authors review local discussion forums and collect remarks on the patronage policy towards Taiwan businesses. They are critical and negative for the most part, and the policies are not popular.

The paper then turns to discussing what many of us have observed over the years: big businesses invested in China helped the KMT in the 2008-2012 election cycle, but since then the public has turned against these economic arrangements, seeing the KMT's China policy as a sellout of the island that helps only big business. As a result, "Beijing is now reviewing its patronage policy and alliance with Taiwanese business, as one respondent, a Chinese expert in Taiwan affairs, said."

In addition to competition and favoritism, Taiwanese businesses are finding it difficult to operate for other reasons:
‘The Observation of Taiwanese Business’s Human Rights in China’ indicates that in most cases of conflicts between Taiwan businesses and local firms, Chinese local governments and judiciary favor local firms significantly. Even worse, local governments have begun infringing on Taiwanese business’s property. As Taiwan businesses entered the mainland at a very early stage, with this advantage they were able to locate their factories in prime real estate areas within cities at that time. With rising land prices, in order to gain profit from reselling the land, local governments frequently force the relocation of Taiwanese businesses occupying these prime locations without reasonable compensation.
The TAO can do little, of course.

The authors conclude with a series of questions that boil down to: what will the future bring? As the 2016 elections show, Taiwanese reject annexation to China and reject economic integration, which is not, in any case, under favorable terms. The Taiwanese have always seen economic engagement with China as a straightforward exchange to receive economic benefits, to be terminated when benefits no longer flowed. Now they are finished flowing.

How will Beijing respond?

The CCP is not the only Chinese political party that this changing economic situation has impacted. This article confirms that the KMT's policy of selling Taiwan to China via economic integration has no political future. Without this economic foundation, the KMT's entire China policy has become, like the ROC itself, a zombie waiting for a bullet to the head.

What will the KMT do?
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1985 Diane Sawyer on the Henry Liu killing

This segment discusses the killing of a writer and critic of the Nationalist regime on Taiwan in California in 1984. The incident affected US relations with the KMT, and helped inspire the recent movie Formosa Betrayed. h/t to KL.
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Tuesday, February 02, 2016

Trippin' to Namaxia

Used the two days of good weather to steal a ride in the south to Namaxia. Gorgeous weather, grand scenery, and great conversation made for a perfect two-day ride in the mountains of Tainan, Kaohsiung, and Chiayi. It was my first ride in a long time, with my hip finally feeling better. So happy... Props to Drew, who planned this wonderful ride. Click on READ MORE to join us on this great ride.

Friday, January 29, 2016

DPP News = Good news

The mysterious east.

Solidarity has the details, but the DPP has wisely picked Su Chia-chyuan, the sensible, competent, and solid politician who ran for Veep with Tsai in 2012 as its Speaker of the Legislature. A county chief in Pingtung, Su came up to the center for the 2010 mayoral election in Taichung, barely losing it. He is close to Tsai, who apparently backed him strongly.

This is a victory for the DPP's potential governance. Many of us had been fearing that the job would fall to longtime majority whip Ker Chien-ming, who was buddy to former KMT Speaker Wang Jin-pyng. That would represent politics as usual. This doesn't.

I looked under the Entertainment and Sports category at FocusTaiwan, but couldn't find anything on the KMT Chairmanship election. Fortunately the Taipei Times had another hard-hitting editorial on it:
Under the KMT’s regulations, only party members who have served on the KMT Central Committee or Central Advisory Committee are eligible to seek election.

The Central Committee has 210 members, who are elected at the party’s national congress from a pool of no more than 420 candidates, half of whom must be nominated by the KMT chairperson and the other half by about 1,600 party delegates.

As for the Central Advisory Committee, its members are appointed by the KMT chairperson, but must be approved by the congress delegates.

Candidates are required to pay a hefty, nonrefundable “handling fee” of NT$1.6 million (US$47,417) and collect the signatures of at least 3 percent of total KMT members, of which there are about 320,000.

The handling fee seems to be another deliberate attempt by the party’s leadership to prevent younger or less well-off members from contending for the post.

The party’s 3 percent endorsement threshold also poses a challenge to aspirants who are not among the top echelon or who are not a member of any of the longstanding factions.
No wonder the KMT keeps getting the same people at the top... earlier this week Hau Lung-bin surprised everyone by withdrawing from the race for the Chairmanship, probably after sensing a lack of support. The race is now pretty much between current vice chair Huang Min-hui, a faction politician from Chiayi backed by the party establishment, and Hung Hsiu-chu, the former presidential candidate, who is the hero of the bitter enders and the Old Soldiers. This looks like a replay of the Chairmanship election in 2005, also about reform, when Ma Ying-jeou ran as the ideological darling of the conservatives, and Taiwanese Wang Jin-pyng, supported by party elites. Ma won that one with the strong support of the Old Soldiers.

Whatever happens, the elites will likely continue to head off genuine Taiwan centered reform, struggling to preserve the KMT as is. Whatever happens, there will be another election next year, so the internecine struggle will continue behind the scenes...
Daily Links:
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Thursday, January 28, 2016

Rainy Thurs Links

A very traditional half-moon shaped pond near Dongshih.

A few good links:
Daily Links:
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Ma Raises Tensions: Just ask the State Dept!

East coast

From the Daily Press Briefing of the State Department:

QUESTION: Yeah. The president of Taiwan, the President Ma, is going to travel to Taiping Island. And what’s the U.S. comment on it?

MR TONER: Sure. Hold on one second, please.


MR TONER: You’re talking about – yeah, President Ma Ying-jeou’s plans to travel to Taiping Island, I think. Frankly, we’re disappointed. We view such an action as unhelpful, and it does not contribute to the peaceful resolution of disputes in the South China Sea. We urge Taiwan and all claimants to lower tensions and de-escalate tensions rather than taking actions that could possibly raise them.

QUESTION: Follow-up.

QUESTION: But even during the China build the rock, the U.S. don’t even use the wording like “disappointed” and “unhelpful.” Why this time the U.S. pick up these two wording on Taiwan? Is it fair enough for all the claimant? [MT: Love this reporter. May he have a long life with no back pain]

MR TONER: Well, look. I’m not going to – we’ve been very clear that we disagree with China’s actions in terms of manmade structures on the islands. We view them also as unhelpful and that they don’t lead to a peaceful resolution of the disputes over the South China Sea. We want to see a halt among all claimants to further land reclamation, construction of new facilities, militarization of outposts. All of that would help lower tensions and create space for a peaceful resolution.

QUESTION: (Inaudible.)

QUESTION: Will it further U.S.-Taiwan’s relation?

MR TONER: I’m not aware that we had a conversation with them. I just don’t know.

QUESTION: Will it affect the U.S. and Taiwan’s relation?

MR TONER: Will affect our --

QUESTION: Yeah. How will it affect --

QUESTION: We have very strong relations with Taiwan. Sometimes we disagree on their actions. We’re committed to a “one China” policy. [MT: recall this does not include Taiwan. Note use of "a" not "the" ] We look forward to the incoming president and building stronger relations with Taiwan. But we disagree on this particular act.


QUESTION: Yeah, Mark, the – you used some of the harsh words on President Ma’s trip to the Taiping Island. But Taiping is the largest natural island in the South China Sea the Republican of China has claimed since 1946 and has occupied since 1956. Why can’t he do that? Taiwan is probably the last party to want to raise tension in the South China Sea. But it has a voice that it wants the international community to hear. When you have – when you consult on the South China Sea, when you discuss the disputes in the South China Sea, Taiwan is never a party to be invited to the table. For instance, Secretary Kerry talked about a diplomatic approach to the disputes in the South China Sea in Beijing today. Would the United States make sure that Taiwan would be invited to the table as a party to the diplomatic approach? Thank you.

MR TONER: So – sure. I can’t speak to whether we would invite Taiwan to take part in any diplomatic conversations, except to say that – and to address your first part of your question, which is why not have its voice be heard by traveling to Taiping Island. Taiwan is – or rather, President Ma Ying-jeou has every right to make his position clear on the South China Sea. We just disagree with this particular action. We view it as – frankly, as raising tensions rather than what we want to see, which is de-escalation. We do want to see dialogue. We welcome all voices in the region weighing in in that dialogue. And it’s only through, as we’ve said many times, a diplomatic mechanism that we can successfully resolve the South China Sea.

Taiwan is a valued partner. We do have a strong dialogue with them and we’re going to continue to listen to their concerns and reflect their concerns in the various fora that address this issue.

QUESTION: Follow-up?

MR TONER: Please, follow up. Let’s finish this and then --

QUESTION: Last one.

MR TONER: Are you on this too?

QUESTION: In the region.

MR TONER: Okay. Cool.

QUESTION: Thanks. I mean, the point is Taiwan has long been excluded from the dialogue among the claimant of the South China Sea, and since the United States discourage President Ma from visiting the island, what would you encourage the Government of Taiwan to do as a claimant of the South China Sea?

MR TONER: Well again, I mean, I’m not going to list the steps that Taiwan or the Taiwanese Government should take and dictate to it in any way, shape, or form. I’m just saying that this particular action, we view as unhelpful.

Obviously it was wise of the DPP not to participate in this mission of Ma's, which he has been nagging about for months now.

I'll be commenting elsewhere tomorrow... look for it.
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Wednesday, January 27, 2016

Ketagalan Travel and the Taiwanese Identity

I am in Ketagalan Media today:
The international media, always fifteen years behind events, has discovered the rising Taiwanese identity among the young. Commentators variously attribute it to the rise of democracy, the Chen Shui-bian era reforms to education, student activism, and other causes. But there is one element they miss: travel...
Go to Travel, and the Taiwanese Identity to see the rest....
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Tuesday, January 26, 2016

KMT Chairmanship Election Blues

The east coast = beautiful

The pro-KMT China Post discusses the jockeying for Mar 26 election for the Chairmanship of the KMT:
With Chen, the field now includes former Deputy Speaker Hung Hsiu-chu (洪秀柱), former Taipei City Mayor Hau Lung-bin (郝龍斌), and Taipei City Councilor Chung Hsiao-ping (鍾小平). Vice President Wu Den-yih (吳敦義) has not ruled out a run, stating last week that he felt “duty-bound” if the party needed him.
Chairman Yok Mu-ming of the more-KMT-than-the-KMT New Party said he would run, but he had the annoying impediment of not being a KMT member, and so became ineligible. At present it looks like a 2 person race between reactionary Hung, the presidential candidate whom Eric Chu displaced, and Hau, son of reactionary Hau Pei-tsun. They both have excellent reactionary credentials with the Old Soldiers. Veep Wu Den-yih, who is likely Ma's man, is Taiwanese and will probably not be acceptable to the old soldiers, whom media reports say will constitute possibly half of the voters. He is still exploring a run. Former Taichung Mayor Jason Hu who had expressed interest, has already ducked out.

Because the voter base lives in the same ideological bubble as Hung, I'm hoping she'll have a shot at it. Recall that ideologue Ma was elected in 2005 over Taiwanese Wang Jin-pyng, even though party elites all wanted Wang, because the base wanted fellow mainlander ideologue Ma... E-Taiwan news reported back in 2005:
It is fair to attribute Ma's victory to his personal image and promise for a younger and cleaner leadership and, even more weighty, the overwhelming endorsement for the Hong Kong-born politician from the hard-core mainlander community, especially the massive Huang Fu-hsing party branch for retired soldiers.
Clearly whoever wins that base will win the election. Hau is not a firebrand who gabbles in KMT insider codespeak like the loquacious Hung. Perhaps the stars will align and I'll have another year of blogging Hung's wit and wisdom.

The wise choice, former Legislative Speaker Wang Jin-pyng, unofficial head of the Taiwanese KMT, is not even in the race, and has said he does not want to be the minority whip, either. In any case, if Wang is not leading the KMT on the floor, that will reduce the KMT's links to the DPP in the legislature.

Some of the Taiwanese legislators are complaining that they will leave the KMT if the ultra-KMT Hung is elected, but that's probably just noise. Recall that there will be another election in 2017 for a new Chairman. They will simply take the long view and wait 16 months for that election. Party insiders may likely accept Hung because they will view her as temporary and a useful patsy for the coming DPP moves against the KMT, keeping some future presidential candidate clean of that charge.

Gonna be fun, the next two months...
Daily Links
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Sunday, January 24, 2016

Legendary cold

So cold I am wearing gloves inside.

It fell to 1C today in Taichung, the coldest I've ever experienced here in Taichung, so cold I am wearing cheap work gloves inside my house. Up at my university in Linkou at about 200 meters of altitude, it snowed. It snowed also in Yilan and several deaths of old people in northern Taiwan were reported. Because houses are not heated or even insulated, a legacy of our construction-industrial state's premium on speed of (shoddy) construction, it wants to be as cold inside as it is outside. Concrete houses are refrigerators... yet the worse thing is the wind, that brutal north wind that makes the outside uncomfortable even when it is deceptively sunny.

Chen Chen-hsiang's old Geo-Essays on Taiwan, first published in 1982 as a collection of still older essays, observes...
With the arrival of the cool season, the variation of temperature between south and north becomes more apparent. In February, the coldest month for a large part of Taiwan, the mean monthly temperature at Hengchun is 20.5C, and at Taipei, 14.8C, showing a difference of 5.7C. On the average, for every 55 kilometers one moves northward the mean temperature of the coldest month falls by 1C.

Cold weather occurs only in the north, when that part is subject to persistent rain or when it is influenced by a cold wave flowing southward from the mainland. The extreme is -1C. Frost is occasionally seen on the ground in the northern part of the island. In the 50 years 1897-1946 Taipei had 34 frosts, Taichung 31 and Tainan only four. This possibility of frost is one of the reasons why sugar cane, banana and pineapple plantations are limited to the south and centre of the island.(p12)
As humans heat the earth, these weather patterns have changed, and frosts have become rarer. A recent paper on frost in the Fushan forest in northeastern Taiwan at 700 meters notes:
The extreme cold temperature (1.3 °C) recorded in March 2005 was a rare event at Fushan and was very unusual in its timing: this freezing temperature only occurred once in March for the past 24 years from 1991 to 2014 (Lu et al. 2000; Lu, Hwang & Huang 2009). This frost event appeared to have a long-lasting effect on plant reproduction of several species at Fushan, especially to those species with new leaves or flowers during the frost. For example, many Lauraceae species that produced new leaves and flowers in early March were greatly impacted by this event. In consequence, these species did not produce seeds in the following fall. The disastrous loss of flowers and seeds not only reduced recruitment in these plant populations but also initiated trophic cascades (Inouye 2000). For instance, Formosan rock macaques (Macaca cyclopis) that rely heavily on fruits as their main diet suffered from extremely high mortality in 2005 and low birth rates in 2006 at Fushan (Su, Teng & Lai 2010).
Cold is not good if plants and animals are not adapted to it.

ADDED: Snowing in the Taipei Basin in the afternoon today... and snow in Dakeng right above my house.
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Saturday, January 23, 2016

Rainy Day Short Shorts

At Hung Tz-yung's HQ on Saturday night
The all-too-familiar sight of party strongmen vying for positions under the table does not bode well for the self-proclaimed reform-minded KMT. Instead of wasting its time in court politics, the party should realize the existential crisis it is in. April 2015
It's KMT Chairmanship election time, and for the next three months the KMT is going to be preoccupied with its internal conflicts, doing less damage to Taiwan in the Ma-Tsai interregnum than it otherwise might have. KMT chairmanship election fun...
The alliance said a number of KMT members have announced that they would run for party chairmanship, including Deputy Legislative Speaker Hung Hsiu-chu (洪秀柱), former KMT vice chairman Hau Lung-bin (郝龍斌) and Taipei City councilors Lee Hsin (李新) and Chung Hsiao-ping (鍾小平).
Former Taichung mayor Jason Hu is also said to be thinking about a run for party Chairman, but has decided not to as of this writing. Of this lot Hu is the only one with real political skills, old time skills in balancing local factions and doling out largesse. He is often identified as a rival of Ma Ying-jeou, who will be a strong player in the Chairmanship election. Hu called for the party to lower the fees for party membership for the young. Hung and Hau are both over 60.

The KMT chairmanship election will be March 26 and the term will end in August of 2017 -- a few months before the 2018 elections for the county chiefs and city mayors. That means the KMT will be facing another bruising internal struggle with an election looming.

The Executive Yuan resigned en masse -- 44 agency heads and the like -- following the election, a decision in the works for months, since my friends in US universities told me cabinet officials in the Ma government have been applying for positions there since the beginning of 2015. Sending out KMT retreads to foreign universities is one of the most important ways the KMT continues to negatively impact the academic discourse on Taiwan. Solidarity observes:
The most important resignation from a governmental standpoint would have to be that of Premier Mao Chi-kuo (毛治國) and his entire Cabinet this afternoon (link). This appears to be part of a futile attempt by Ma into goading Tsai to form a joint Cabinet with him the next four months, a diminution of presidential sovereignty that could come in handy at the end of Tsai’s term. Ma and Mao have been talking about the legislative majority being DPP (the new Legislature takes office in just a couple weeks) creating a mandate for a joint Cabinet, another diminution of the president that could also come in handy if the KMT can retake at least the Legislature at some point in the future. Tsai won’t go for any of this and questions the constitutionality of the plan. She wants Ma and his team to sit and wait for May. Complicating things is Mao seeming to insist he wants to leave when Ma is now open to keeping him (link) and media reports Ma’s been unable to contact Mao and Mao’s wife left Ma standing out in the cold when he visited the Mao home recently (link). Anyway, it seems Simon Chang (張善政) (whose Chinese first name literally means “good government”) will be the acting premier until this drama is settled by Ma deciding definitively whose resignations to accept or reject.
Lots of people not really getting why the Tsai camp won't accept the idea of selecting the government from the party with the majority in the legislature. If Tsai accepts that, and the KMT wins back the legislature in the next election, then the KMT gets to appoint the government, making the presidency superfluous. It's one of several faux "reform" ideas the KMT has been floating in the last year to reduce the power of the presidency in the hope of regaining the legislature and eviscerating the DPP president's powers, similar to this one. Fortunately the Tsai camp laughed at it. It's no way to run a government, and does not reflect well on the KMT.

Yesterday a TV commentator pointed out that the KMT has never had a legislator who started out as a legislative assistant -- it's all nepotism. By contrast, the DPP has system for bringing people up. There's also another of the periodic calls for the KMT to drop "Chinese" from its name. Nothing will come of that.

The Great Firewall was opened on Wednesday and thousands of Chinese trolls attacked Tsai Ing-wen's Facebook, What this event really shows is how lucky the world is that the Great Firewall exists. Without that, Wikipedia would quickly become useless, overrun with Chinese trolls flooding it with bad grammar and worse history, and groups interested in China-related issues would become filled with idiots. The Great Firewall is saving the global internet.

It is widely reported, though nothing definitive is out there, that China is going to cut tourists 30-50% in March. Locals will love that; Chinese tourists are widely detested and a net loss for Taiwan in several ways. Recent media reports have tourism profits going to Chinese firms connected to China's Taiwan Affairs Office (TAO), and an old AP report had the profits going to Hong Kong-based firms (here). Moreover, reports from a couple of years ago said that Chinese firms were dilatory or negligent in paying their debts to Taiwan tourism firms, further reducing local benefits. However, because all those tourists purchase NT dollars when they come in, they push the value of the NT up slightly. Thus, a drop in tourists is going to mean a slight weakening of the NT dollar. This may be welcome by exporters, if the central bank permits the NT to continue to weaken.

Even better, Solidarity tweeted that UDN reported 40 hotel projects opening in next few years, and Gwen Wang, who writes for Ketagalan from time to time, observed that they are all owned by Chinese investors from Hong Kong and China. The CCP betraying its own supporters? Who could have predicted that? But it may be that the CCP is floating this as a trial balloon to see what its people say. If Chinese tourists fall, Korean and Japanese tourists who spend much more will return, and no one on the island will suffer. Good riddance. Now we just need to get our factories out of China...

WaPo says China could learn from Taiwan's election. Yes, they are learning that if China democratizes, its empire will lose several regions and the CCP will eventually be swept from power. I think they will learn they have to crack down even more.

O hell yeah: the positive media coverage for Tsai's election is a big plus for Taiwan and the DPP, and signals a shift in the Establishment position on Taiwan, since the international media faithfully reflect Establishment values. Maybe we'll someday be treated like a plucky Eastern European state resisting Russian expansion....
Daily Links:
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Thursday, January 21, 2016

Yes, Larry Diamond, the KMT is doomed

Hillside in Taichung.
On behalf of the party headquarters, Huang said he respected the Taiwanese people's decision and attributed the loss to a split KMT, adding that the party will speed up its pace of reform to win back the people's hearts. March 19, 2000
At the conference on Sunday longtime East Asian political economy and democracy scholar Larry Diamond asked whether the KMT was going to collapse. I've answered his question below using many points I've made in disparate posts; the most important point is the last... it's a long post, so you'll have to click on READ MORE...

Wednesday, January 20, 2016

Post Election Commentary Linkfest Madness

Election night at Hung Tz-yung's HQ in Daya. What a wonderful moment.



KMT Problems
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Nelson Report Compilation

A reporter readies at NPP party HQ in Daya, Taichung on election night

Stored below the READ MORE link... starts with Tsai's speech on election night in English and Chinese

Tuesday, January 19, 2016

Well Well

The Yilan plain, now under local administration

Long time waiting for that election. And very happy to see it. The easy part was beating the imploding KMT, which, like a star becoming a black hole, will continue to exert a powerful negative gravity on local space. The hard part is coming up -- decolonizing Taiwan, governing our fractious nation, reforming the government reshaping it into an actual government and not the candy coating over a one-party state, keeping the DPP from falling apart, fending off the coming challenges of the minor parties, which have to differentiate themselves from the DPP or be seen as its errand boys, and preparing the ground for 2020.

I've been deeply concerned about some events in my private life, and so I have not been blogging. But I'll be catching up over the next couple of days.

Ting, I owe you one. Tomorrow for sure.
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