Pictures and Text

Saw some new posters out there on the way to the train station today, though the DPP has too many of the old posters up. Need some new styles! In Taichung Ma Ying-jeou has some nice new posters that are very localized. Also making an appearance are some ominous black ones that call on readers to Oppose The One China market, the KMT's suggestion that somehow China and Taiwan form a commonwealth market, or a One China market. Last week the DPP revived charges against Ma that he will recognize Chinese professional credentials, something local professional associations adamantly oppose. Even though Ma backed away from that, it remains a logical outcome of closer market relations between the two countries. This issue may make a nice club to beat Ma with.

Tomorrow look for a new Zogby poll on Taiwan independence, out just in time for the election.

The Taipei Times reported the other day on the House resolution in support of Taiwan's democracy, a welcome reminder of how Taiwan remains a bipartisan issue in Congress. Unfortunately, a clause from the original text stating that Taiwan "faces threat and intimidation from neighboring China" was deleted at the insistence of the chair of the subcommittee for Asia & Pacific, Rep. Faleomavaega. Gerrit over at FAPA passed along this short response from Gary Schmitt of the American Enterprise Institute attacking Faleomavaega's support of Beijing:

In a crass suck-up to the Communist leadership in Beijing, the Bush administration has spent the last several months complaining about the decision of the Taiwanese government to hold a referendum on joining the U.N. under the name of "Taiwan." (THE SCRAPBOOK wonders why anyone would want to join the U.N. under any name, but that's for another day.) What's been lost sight of in the midst of this ridiculous posturing by the administration is the fact that, on March 22, Taiwan will be holding its fourth free and competitive presidential election. No small feat for a little country sitting in the shadow of a huge neighbor that openly and daily threatens it with an arsenal of more than a thousand missiles pointed its way.

To its credit, the House of Representatives on March 5 passed a resolution praising both Taiwan's democratic achievement and the upcoming vote by the overwhelming margin of 409-1. The only odd note--other than the lone dissenting vote from our libertarian friend Ron Paul, who apparently doesn't care about liberty other than his own--was the deletion from the original resolution of a clause accurately noting that Taiwan "faces threat and intimidation from neighboring China." The deletion came at the insistence of the chairman of the House Asia and Pacific subcommittee, delegate Eni Faleomavaega from American Samoa. Yes, you read that right .  .  . American Samoa. Despite the fact that Mr. Faleomavaega is a nonvoting "member," it appears he gets to throw his considerable Samoan weight around when it comes to American foreign policy. What's next? D.C. delegate Eleanor Holmes Norton running the Armed Services Committee?

Schmitt's hyperbole aside, Faleomavaega has a history of klutziness on Taiwan issues. I've blogged on Faleomavaega's service to Beijing previously in a post on this Nelson Report that includes a very uninformed letter from him on the Taiwan-China issue. It's a shame that a person in an important policymaking position has picked the wrong side in the struggle for democracy. Also sad -- where is the response to this from the other end of the political spectrum?

Finally, Jonathon Adams in FEER takes a long look at the rising costs faced by Taiwanese makers in China, thanks to the new labor laws and the appreciation of the Yuan. It seems the era of cheap labor may be coming to a close...

The effect was a hollowing out of the island’s manufacturing sector. Annual employment in Taiwan’s fabled export processing zones dipped sharply to 50,000 in 1994 from 90,000 in 1987. Politicians bemoaned the flight of Taiwanese industry to the mainland, and warned it was making the island too economically dependent on its bitter political rival across the Strait.

Now, economic forces and policy choices in the mainland have begun to blunt that political threat. “There’s no need for the government to have a policy of stopping Taiwan businesses from going to China, because industrial policy is changing there,” says Gordon Sun of the Taiwan Institute of Economic Research in an interview last year. “Labor and land costs are bigger, so naturally [Taiwan businesses] will go somewhere else. Dependency won’t be an issue because now China is changing.”

Many Taiwan firms are seeking greener pastures, moving production to places like Vietnam, the new low-cost platform of choice. They’re also eyeing western China, where Beijing has left some incentives in place to lure foreign money to the poorer hinterland. A Chinese Commerce Ministry official recently announced that China would help Taiwanese firms struggling with higher costs by offering loans and other incentives if they expand inland.

Some have already done so: Contract electronics giant Hon Hai, for example, has opened two “mega sites” for production in inland areas in the past three months. And inland industrial hubs like Chongqing have already attracted investment from Taiwanese firms like chemicals giant Formosa Plastics and memory chip maker Promos.

Meanwhile, the Taiwan government has actively touted alternatives to China. The latest candidate: India. The economics ministry recently announced a public-private partnership to develop a 1,200-hectare industrial zone in Andhra Pradesh state. They are specifically targeting investment from Taiwan firms hit by rising costs in China.

Is India in our future? I hope so. We need more South Indian restuarants.....

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