Thursday, March 15, 2007

The Land of the Slow Boiling Frog

The Economist offered a column the other day that compared Taiwan to a frog that is slowly boiling.

One former prime minister of Taiwan gives his island 15-20 years before it is part of China again. Another former minister says Taiwan feels like a frog placed on top of the stove in a pan of cold water. The beauty of this cooking method is held to be that, if the water is heated gently enough, the frog does not think to jump out.

We are not told what political party "the former prime minister of Taiwan" belongs to, so such information cannot be placed in any context. Omissions of context are par for the course in the international media when it writes about Taiwan. Of course, here in Taiwan, almost everyone is a former prime minister...

The magazine also offers this observation:
Taiwanese businessmen love China. The mainland’s charm offensive has at times been subtle. For instance, by offering to open its markets to Taiwanese farm goods, the mainland has undermined traditional DPP support among the island’s southern fruit-growers.
Have fruit exports to China really had such an effect? Fruit exports amount to just 5% of the island's fruit production and more than a third go to Japan, with 12% to Hong Kong. The China market is comparatively minuscule. The real goal of the opening is identified in a Taiwan Review piece from last year:

China appears to be a promising market and currently Taiwan's government imposes no restrictions on the export of agricultural products across the Taiwan Strait. However, Chinese demand for Taiwan's high-priced fruit is extremely limited, and the lack of direct transportation links also hinders developing a market there. China has, according to some reports, been suggesting to Taiwanese fruit growers that they set up in China itself. The government, however, is opposed to this because of the risk of intellectual property theft. Large quantities of both money and effort have been expended on improving both plant stock and growing techniques, and these superior materials could easily be stolen and techniques copied in China, with the possible result that China-grown fruit of Taiwanese varieties could end up replacing Taiwan's own produce in international markets. In 2005 China (not including Hong Kong) accounted for 3 percent of the total value of Taiwan's fruit exports, according to COA statistics.
I'm sure that farmers were switching the KMT left and right, thanks to the impact of that 3% of the 5% of the fruit market. The Mainland Affairs Council noted last October that:

"...Taiwan’s fruit exports to China amounted to only US$2.49 million in the first eight months of 2006, representing just 3.4 percent of total fruit exports. If fruit exports to Hong Kong are also included, the total is US$8.8 million, representing a slight increase of 13.3 percent as compared to the same period in 2005."

Just to put that in perspective, iceberg lettuce sales to Japan last year were worth US$1.2 million. I think our friend the Economist columnist has spent too much time listening to mainland triumphalists, and not enough poring over the numbers.

The article also demonstrates other misunderstandings of Taiwan, including the pro forma nod to Ma Ying-jeou as the favorite for the 2008 race:

Ma Ying-jeou of the opposition Kuomintang (KMT), and the presumed favourite for the presidency next spring despite also facing corruption charges (it seems to come with the territory), says he favours seeking an “economic partnership agreement” with China.

Hmmm...and once again, a foreign media outlet fails to call the KMT by its formal English name, the Chinese Nationalist Party. On the whole it is partial to Beijing, and advances a common view, namely that economic closeness must mean political integration:

Taiwan’s economic role ought to be clear. Instead of fretting about the loss of manufacturing to China, the island should be fostering competition in services—design, logistics, finance and so on.

As with Hong Kong, that can be Taiwan’s path to greater prosperity. But also as with Hong Kong, it means being joined ever closer to China, and that process may prove both irreversible and unstoppable.

"Inevitability" is a common pro-Beijing theme -- one that abjures the victim to "Lie down and stop struggling!". History teaches that nations with close linguistic and cultural ties need not become one no matter what the level of economic integration (see history of US and Canada) and will actively resist even if annexed (see history of Ukraine and Russia, Poland and Russia...). The fact is that annexation to China is neither necessary for enjoyment of the economic benefits of close integration, nor inevitable.

It is sad when columnists from democratic states, instead of engaging in a robust, thoughtful, and historically-informed discourse about the island's fate, simply repeat Beijing's claims as if they constituted some repository of wisdom and insight. If Taiwan boils slowly, it is because the international media keep helping Beijing schlep logs for the fire.


TC said...

On the KMT website it refers to itself as "The Kuomintang," so I would assume that is its formal English name, no?

Michael Turton said...

You're right. I'll have to rephrase that objection.


Anonymous said...

Economists are forward looking, I think the article simply are pointing out that the potential of the Chinese market. For example, stock price is all forward looking price based on expected earning. That's why google's p/e ratio is so high due to its potential for growth. I think you will agree that Japanese market is matured and growth is limited.

I think Taiwan should worry more about the US foods sell to China (or other imports and exports). Since majority of pro-taiwan independence senators and congress men are from south and mid-west where large amounts of soy beans and corns are produced for China. USDA has data for 2004 and US total horticulture export to China grow by 73% overtaking Taiwan from 2002 to 2003. An based on Southwest farm press, China this year is going to be forth mainly due to its large import of soybeans, 8.5 billions, just below Canada, Mexico, and Japan.

Also, remeber the McDonald rule, US has never gone to war with a country with McDonalds. And I don't think the article is biased, consider it post a very bad picture of Li Zhaoxing.

Anonymous said...

The website, like most websites in Taiwan, does not represent officialness. It doesn't have an official English name that I know of (you'd have to ask them to dig through their records). The Chinese KMT talked about changing its name to Taiwan KMT so the way they see themselves is also as the Chinese KMT.

Anonymous said...

According to the KMT website (English version), when founded in 1894 the KMT was originally called, the "Revive China Society". And, quoting from the website,

"In order to maintain long-term competitiveness over the passage of time, the party has had to continuously reorganize itself. In 1905, the Revive China Society joined forces with the revolutionary groups the ‘Society for China’s Revival’ and the ‘Restoration Society’ to form the Revolutionary Alliance in Tokyo, which itself merged with several other political parties to form the KMT in August 1912 in Peking. In July 1914 the KMT reorganized itself into the Chinese Revolutionary Party, and later in 1919 changed its name to the Kuomintang of China. It was in January 1924, during the first National Congress, that the party’s process of reorganization into the Kuomintang of China was formally completed."

So, it appears to me that the KMT goes by "The Kuomintang" for short and the full name is "The Kuomintang of China".

Michael Turton said...

Maybe, but they do that so that they don't have to call themselves what they are, Chinese Nationalists.


Anonymous said...

The fact is that annexation to China is neither necessary for enjoyment of the economic benefits of close integration, nor inevitable.
True, but the reality is annexation is necessary from China's perspective, and it takes two to produce those benefits.

Michael Turton said...

True, but the reality is annexation is necessary from China's perspective, and it takes two to produce those benefits.

It does take two to trade. Yet, the two have been two nations for the whole period of boom trading since 1990.

You could make the same argument for Korea. Or India.