Saturday, May 31, 2008

DPP Statement on Wu-Hu Lovefest

Xuenfang Battery in Tainan, on Guanghua Street, now enclosed in the grounds of a Buddhist nunnery.

The DPP came out with a statement on Saturday morning saying that the Wu-Hu talks had inflicted "five major wounds" on Taiwan:

  • Harming Taiwan's democracy by regressing the pattern of cross-strait negotiations back before even the October 1992 semi-public SEF-ARATS talks to the party to party talks called for in the "Nine Points" issued in 1981 by Ye Jianying and by returning to an era of "the party leads the government." The negotiations are "private negotiations" and the KMT neither has to report to the Legislative Yuan nor be subject to any monitoring.

  • Harming Taiwan's sovereignty as Wu did not even dare to mention "one China, separate expressions," turning Taiwan`s President Ma into Taipei's Mister Ma. Thus did not just set aside disputes, it set aside Taiwan's sovereignty. Wu`s request for Beijing's help in arranging Taiwan`s international space also reduced Taiwan`s sovereignty into a bargaining chip with China so that even before negotiations have begun, Taiwan has already made a serious concession by Wu`s agreement to "hollow out" Taiwan`s sovereignty.

  • Harming Taiwan's negotiation process by placing the KMT-CCP platform ahead of the SEF - ARATS channel and even implying with the timing that only because of the party-to-party talks and has allowed China to portray the June 11-14 talks as the product of party-to-party negotiations and has thus created confusion between the KMT-CCP "Track Two" and the SEF-ARATS "Track One."

  • Harming Taiwan's security as, while proclaiming that the people on both sides of the strait belonged to the same Chinese nation had shared the love of compatriots, Hu has not done anything to eliminate the threat to the 23 million Taiwan people by 1,400 missiles aimed at Taiwan or to cease oppressing Taiwan`s international space or blocking Taiwan's entry into the
    WHO. The only result of the Wu-Hu talks has been the depreciation of Taiwan's sovereignty.

  • Harming Taiwan's economic interests by focusing solely on the opening of the Taiwan market to Chinese tourists and the initiation of direct weekend passenger charter flights, both of which are more favorable to the PRC`s interests, and failing to discuss the question of direct charter cargo flights, which is more in Taiwan's interest and would facilitate the retention of R&D and precision component production in Taiwan and locating assembly operations in China.

  • The DPP statement said it did not oppose contact between political parties in the PRC and Taiwan on the basis of upholding Taiwan`s national interests, promoting cross-strait peace, publicizing Taiwan`s democracy and assisting China`s democratization.

    However, the DPP maintained that such interaction should not involve matters of public authority or national interest and noted that if such contacts did do so, they would be violating the statute on cross-strait relations, which specifically bans any individuals or organizations from engaging in negotiations with mainland organizations or government on matters that involve public authority or interest.

    Some incisive commentary from the DPP. Wu has granted the PRC everything it wants and gotten nothing from the PRC. As a perceptive commentator pointed out to me, it looks like the public elected the KMT to fix the economy by moving closer to China, but the KMT is moving closer to China regardless, and the economy is just an excuse. In a society with a robust and fair-minded media, the disjunct between the goals of the KMT and the people might cause serious problems, but with the way the media serves the Blues....

    How the Blue Media Works

    A friend of mine flipped me this photo above of a Little Blue Truck taking on gas at a gas station. Except that the gas isn't going into a truck, but into this gigantic plastic tank. No safety issues here with our gigantic Molotov cocktail!

    Speaking of gasoline, Maddog at Taiwan Matters! picked up this fantastic post from Social Force on how Chinese-owned TVBS station here in Taiwan shamelessly roots for the KMT. It's so revealing, I thought I'd put it here. The key excerpt, translations by Maddog:

    A post on the forum brings us the links, quotes, and commentary. I've [maddog] merely provided the translations:

    (->) 政院擬降稅 汽油可能只漲4.5元 2008年5月27日 [TVBS article, via Yahoo News]

    Executive Yuan to incrementally raise gas prices, price might only go up NT$4.5 -- May 27, 2008


    Let's look at some older news:

    (->) 超貴!油價漲2元 最快今公佈 2006年4月18日 [TVBS article]

    Super expensive! Gas prices to go up NT$2, today at the earliest -- April 18, 2006

    [Excerpt:] 一大早加油站就湧進大批人潮,因為油價這回不但要漲,

    The large early-morning crowd at gas stations was not only because of the price increases, but possibly also because this is a record high.
    [Excerpt:] 假設以每公升調漲2元來計算,民眾平均每次加油40到50公升,

    Assuming a NT$2 price increase times 40 to 50 liters per tank will add close to NT$100 to the average person's fill-up, adding up to a considerable amount over time.

    (->) 油價狂漲! 馬痛批:扁政府做太差 2007年10月30日 [TVBS article]

    Insane gasoline price hike! Ma complains: Chen government is doing a terrible job -- October 30, 2007

    [Commentary:] 漲了4.5元叫"只漲",漲了2元叫"超貴,歷史新高",
    3.9*50=195 快200元耶

    An increase of NT$4.5 is called "only," whereas an increase of NT$2 is "super expensive, a historic high."
    Is 2 greater than 4.5?
    The reporter's logic is puzzling.
    Isn't it strange that today's reporters can't help people calculate what the additional costs of filling up will be?
    NT$3.9 times 50 [liters per tank] equals 195 -- almost NT$200!
    Regular people can't survive, la~!

    [Sarcastic commentary:] 扁政府真是做太差了,沒能力讓大家看到這種排隊加油沒有盡頭的奇蹟,

    The Chen Shui-bian government did such a poor job, not being able to let everyone experience the wonder of neverending gas lines. Mr. Ma is great!

    Ming Vases and Media Places

    Chris Patten, the last British governor of Hong Kong, abusing westerners for their propensity to take China's feelings seriously, once observed that China was different: it had to be treated like a Ming vase. No better example can be found than the Bush Adminstration's treatment of China:

    The U.S. ambassador to China, Clark T. "Sandy" Randt, opposes Bush administration plans to sell advanced F-16 jets to Taiwan because of concerns that Beijing has grown "angry" over protests and harsh reaction around the world to China's Olympic torch relay.

    Mr. Randt, according to administration officials, informed President Bush recently that he opposes approval of the sale of F-16 C/D models to Taiwan because "China is now vulnerable and angry" because of the protests surrounding the Olympic torch relay in Europe and Asia.

    Mr. Randt has told the president that nothing should be done to hurt China's feelings before the Olympics, set to begin Aug. 8, and wants to wait until well after the Games, perhaps into the next administration before approving the warplane sale.

    The ambassador has served in Beijing since 2001. Mr. Randt was behind State Department pressure on Japan's government to block a pre-inaugural visit to Tokyo by Taiwan's new president, Ma Ying-jeou.

    The tale that Randt put pressure on Japan's government (and apparently the US as well) to block Ma Ying-jeou visits to the US and Japan prior to his swearing-in has been running around on the internet for a couple of weeks at least, but this is the first I've seen it in print.

    Thanks to secret informants, The View from Taiwan has obtained transcripts of Ambassador Randt's most recent state dinner:

    RANDT: My, that was delicious.
    CHINESE WAITER: I'm sorry, sir, but you're not finished.
    RANDT: What? I'm stuffed.
    WAITER: You'll have to eat all your rice, sir. Otherwise you'll hurt the feelings of the great Chinese people.
    RANDT: Oh. Well, then, I'll get right on it.
    WAITER: Isn't that bottled water from France? You've hurt...!
    RANDT: [hastily] Oh, right! Someone else put that there. I wasn't going to touch it.
    DINER: I should hope not! And say, wasn't that watch made in Switzerland? China makes perfectly good watches!
    WAITER: Sir! I protest! You've hurt the feelings of the great Chinese people!
    RANDT: I'm sorry! I'm sorry! [offers watch] Here, you take it.
    WAITER: Bribing me to silence! This is an outrage!
    SECOND DINER: An outrage against the feelings of the Chinese people!
    RANDT: Please, accept my apologies on behalf of all the people of the United States. What can I do to make it up to you?
    WAITER: Finish your rice. Oh, and about those F-16s for Taiwan...

    China is "vulnerable and angry." Poor China, perhaps it ought to be in therapy for its aggressive anti-social behavior and insecurities. There's an object lesson in the current treatment of France, folks. The Taipei Times noted today that French travel agents fear a Chinese boycott:

    French tour operators fear a “catastrophic” plunge in business after an order was apparently given to Chinese travel agents to stop selling trips to the country.

    France is the most popular European holiday destination for Chinese tourists and some 700,000 flocked to the country last year, with Paris, the Cote d’Azur and the Loire chateau region the most popular destinations.

    But many canceled their trips after demonstrators disrupted the Olympic flame’s passage through Paris last month, and travel agents in Beijing said they had now been advised to remove France from their destinations from this week.

    “It is a catastrophic year for Chinese tourism in France,” Philippe Yao, director of the China Comfort Travel agency in France, said on Thursday.

    One could hardly name a nation that has supported China more strongly, calling repeatedly for an end to the weapons embargo imposed after Tiananmen and touting its special relationship with China. It was French recognition of the PRC in 1964 that triggered the avalanche of recognition culminating in Nixon's visit and UN entry. And what does France get for its service to the Dragon Throne? A couple of protests and BAM! you have hurt the feelings of the Chinese people! Maybe the US ought to try this approach next time some Parisian criticizes McDonalds, instead of treating France like a friend and ally with whom we sometimes have differences.

    Some of you might think: See? If we be nice to China, we won't be boycotted. But that is exactly the kind of blackmail that China wants westerners to submit to: the cringing submission of the abused wife who hopes that if she is just works harder to make her husband happy, he won't smack her around, whereas the reality is that he smacks her because she abases herself before him. Shameful that Ambassador Randt has argued that the US ought to make submission to this kind of emotional blackmail US policy. There may be reasonable positions to take against selling F-16s to the US, but "the feelings of the Chinese people" are not among them.

    In the Wall Street Journal McCain and Joe Lieberman published a piece calling for new US Asian policy. Given Bush Administration neglect of Asia, except for a few high profile diplomatic initiatives, like North Korea, such attention to the 21st century is heartwarming. Unfortunately McCain and Lieberman do not mention The Beautiful Isle. By contrast Obama wrote a letter congratulating Taiwan a while back, a letter I've heard was written by former AIT head and current Brookings fellow Richard Bush, a longtime US government Taiwan specialist. McCain and Taiwan were mentioned together in that issue of WSJ, but in an article on his ties to a lobbyist whose Orion Strategies company has lobbied for Taiwan, Randy Scheunemann, a prominent Neocon who was one of the driving minds behind our criminal war in Iraq. Just another example of how Taiwan has become a neocon project while progressives continue to perceive Taiwan through Cold War lenses. Wake up, lefties!

    Speaking of neocons who drove the Iraq war and Taiwan, Michael Ledeen, a name anyone familiar with the Iraq mess will recognize, published a piece in the Far Eastern Economic Review (FEER) arguing that Beijing was embracing classical fascism. They may be moving through a classically Fascist phase in which the State proffers an authoritarian ideology, allies itself with big industry, suppresses the peasantry and workers through carrot and stick programs, locks up dissenters, and pursues an aggressive foreign policy, but I suspect that in the end Beijing will try rig a "soft landing" to a political system like Singapore or what the KMT appears to be aiming for in Taiwan. In any case it is difficult to disagree with what Ledeen is saying even if it is Ledeen saying it. This is a comment I have heard progressives make many times as well. Ledeen could have added that also like the Fascist and Communist states of the between-wars periods, China has generated a whole class of western apologists who should probably know better.

    Feel like punishing yourself? Try former US ambassador Charles Freeman's speech in the NCUSCR that is pure Establishment in its approach to China and Taiwan (scroll down to see, but at least short book reviews of Susan Shirk's new book and Alan Wachman's Why Taiwan are at the bottom).

    Friday, May 30, 2008

    Taiwan News: Wu gives away Taiwan

    Taiwan News has another hard hitting editorial, this time on how KMT Chairman Wu Po-hsiung has sold out the island and its vision of pluralistic democracy:

    In the midst of the storm over Tuesday's lightening hike in petroleum prices by the new Kuomintang government, virtually all of our citizens have failed to notice that the title deed to Taiwan's hard-won democracy and substantive independence were literally being given away to the People's Republic of China by the chairman of the self-same ruling KMT.

    The transaction took place during the meeting in Beijing Wednesday between KMT Chairman Wu Po-hsiung and PRC State Chairman Hu Jintao, who was wearing his more important hat of general secretary of the ruling Chinese Communist Party.

    The results of the Hu - Wu tete-a-tete have already been lauded as a "breakthrough" for "peace between Taiwan and China" by international media and most of the local press, which dutifully reported Beijing's instructions for the resumption of consultations between the Taiwan's semi-official Strait Exchange Foundation and Beijing's counterpart Association for Relations Across the Taiwan Strait next month in Beijing. Nevertheless, odes of joy that "peace in our time" has been realized would be premature before a close examination of the bill for this "ice-breaking."

    A close perusal of the charges show that all of the alleged gains of Hu's apparent "concessions" overwhelmed by the cost to our freedom and future prosperity of the consensus reached by the two ruling parties on the overarching political framework for future cross-strait relations.

    As warned in previous editorials, the signal for the KMT's sell-out of Taiwan was conveyed by their repeated use of the term "Chinese nation" (zhonghua minzu) during their talks.

    The decisive point, as the official Kuomintang News Network highlighted yesterday is that both Hu and Wu "used 'Chinese nation' to replace 'one China."'

    This political parlor trick did not simply "set aside the dispute over sovereignty," as claimed by Wu, but instead elevated a racialist (and unhistorical) concept of the "Chinese nation" (invented by Qing Dynasty writer Liang Qichao in the early 1900s) based on "common blood ancestry" above both the PRC and the ROC constitutions and committed both ruling parties, in their status as the self-anointed representatives of the "great Chinese nation," to the imposition of this "final solution" to the cross-strait dispute.

    Not coincidentally, the substitution also superseded Ma's claim that the so-called"Consensus of 1992" allowed for "separate verbal expressions" of "one China" and Wu's references to our president as "Mr Ma" confirmed this marginalization.

    Since the PRC is a one - party dictatorship, no one will be able to object to Hu's action, but the action of Wu and the KMT have illegitimately subordinated the democratic rights of the 23 million Taiwan people and the legal authority of newly inaugurated government of President Ma Ying-jeou to the arbitrary agenda of the "KMT-CCP platform."

    Moreover, the KMT and CCP clearly intend to use the "iron cage" of the "great Chinese nation" to imprison Taiwan's citizen - based and democratic constitutional system and deny any option for the Taiwan people besides affiliation with the "great Chinese nation."

    The KMT - CCP consensus to enshrine the "Chinese nation" as the "final solution" has already surrendered Taiwan's sovereignty in principle to the CCP; the role now earmarked for Taiwan's democratically elected government and its "authorized" SEF is to negotiate the concrete terms of surrender, including the provision of face-saving "carrots," with the ARATS.

    The protest by Mainland Affairs Council Chairwoman Lai Shin-yuan yesterday that the "track two" KMT-CCP platform "cannot override" the government authorized SEF-ARARTS channel is doomed to futility because the PRC, which is obviously the dominant partner in this asymmetrical political dance, has placed primacy on "party - to - party" negotiations and uses ARATS only as its tool.

    Although the 23 million Taiwan people are the primary victims, President Ma himself has clearly been outflanked and outfoxed by the KMT old guard headed by his rivals such as KMT "honorary chairman" Lien Chan and Wu himself.

    Besides negating the liberal and pluralist citizen nationalism of the Democratic Progressive Party and the Taiwan democratic movement, the KMT-CCP reification of an overarching racial concept of a "Chinese nation" also contravenes the ROC Constitution, a framework which Ma swore to defend and implement, which is itself founded on the spirit of civic nationalism and "people's sovereignty."

    Article Two of the ROC Constitution, promulgated in December 1947, declares that the "sovereignty of the ROC resides in the whole body of citizens" while Article Three specifies that "people who possess the nationality of the ROC are ROC citizens."

    These two critical declarations show that the ROC's republican foundation is not primarily based on its territory but upon "citizen nationalism" (kuominzhuyi) and not "racial nationalism" (minzuzhuyi).

    President Ma has been effectively given the choice to either acquiesce in this sleazy transfer of "ownership" to the "great Chinese nation" and the disembowelment of our hard-won democracy or to join with democratic and Taiwan-centric forces to reject the right of the KMT and CCP to unilaterally impose their "final solution" and deny the autonomy, democracy and dignity of the 23 million Taiwan people.
    I was discussing this editorial with a knowledgeable observer of Taiwan affairs, who pointed out that the emphasis on the chunghwa minzu as the basis for the "Chinese state" is a way to suppress 'citizen nationalism' and prevent it from spreading into the PRC. As the editorial points out, the PRC wants desperately to suppress Taiwan's democracy, and the KMT has a similar interest -- the locals once voted a non-KMT party into office. Note also that MAC headed by TSU politico Lai Shin-yuan has been totally bypassed in these negotiations.

    Didn't take long, did it?

    Thursday, May 29, 2008

    Infrastructure Dust Up

    A struggle is brewing over regional disparities in funding. It seems that the central government's plan is to "stress the north, ignore the south" and southern politicians are deeply unhappy:

    Kaohsiung County Magistrate Yang Chiu-hsing proposed the central government Tuesday take into account each administrative district's size, in addition to their population, when allocating state funds for boosting the local economy and for promoting public construction projects.

    Yang made the suggestion in a meeting with ranking county government officials after the Cabinet-level Council for Economic Planning and Development (CEPD) made public last Friday a list of the amounts that local governments will receive under the plan.

    Taipei County in northern Taiwan would receive the largest share -- NT$9.6 billion from the NT$114.4 billion (US$3.74 billion) in state funds earmarked by the Executive Yuan.

    Neighboring Taipei City would receive the second highest sum of NT$6.6 billion, followed by Taoyuan County at NT$4.9 billion. Taipei City and Taoyuan County are also in northern Taiwan.
    The total spending plan is worth US$3.7 billion. It is true that the areas receiving the most cash for public infrastructure projects are all in the north, and all predominantly Blue. Indeed, as A-gu reported the other day, the KMT briefed its own magistrates on the spending plans as early as February, while giving DPP magistrates just a day to prepare theirs once the KMT got into office. The message to the DPP-held areas is clear. But at the same time the idea of spending where the people are is not exactly irrational. Another issue is that Taoyuan is the fastest growing county in Taiwan, and high growth naturally demands more infrastructure spending.

    One of Taiwan's most pervasive problems is the disparity between the north and the south, something that the DPP tried to ameliorate. Consequently, Kaohsiung mayor Chen Chu has organized a group of six southern city and county heads to oppose the new plan. Meanwhile out in the Penghu, officials are demanding that the government keep its promises to put in casinos.

    Public infrastructure spending is supposed to save the construction firms with whom the local officials have such intimate political patronage connections. These are limping along, and many in the local construction industry are now asking whether China can save Taiwan's real estate industry. As the Taipei Times reports, construction isn't doing so well.

    A report by Collier International, however, said office building prices had gone up so much that it had scared away potential buyers or office tenants, the Chinese-language Economic Daily News reported yesterday.

    The report forecast the vacancy rate for the office building market could climb back up to exceed 10 percent this year from last year’s 9.47 percent, the paper said.

    Meanwhile, statistics released by the central bank yesterday showed that the property market may be showing signs of weakening. Loans for construction have dropped for a second straight month to NT$1.018 trillion last month, tallies showed.

    The NT$8.65 billion, or 0.85 percent, decline in such loans — which mostly include loans to construction companies for housing projects and land development — in April from the previous month has accelerated from a monthly decline of NT$2.07 billion, or 0.21 percent, in March, data showed.

    The central bank’s latest data also indicated weakening consumer loans in other categories. Car loans presented a continual decline since July 2006 and fell to NT$81.21 billion last month, a reduction of NT$1.8 billion, or 2.18 percent, from the previous month.

    The Taiwan Institution for Economic Research (TIER) observed that any boost from infrastructure spending this year will probably be offset by rising gas and food prices. Perhaps effects will show up next year, it said.

    SCMP Commentary on Ma

    And now for something completely different: I got flipped a version of Michael Fahey's commentary in the South China Morning Post, and a version of that now appears here. Compare this to the two pieces in the post below this one:


    Taiwan’s conservative new president Ma Ying-jeou began his term with burst of symbolic activity and bland rhetoric intended to move Taiwan, 20 years after the fall of the Berlin Wall, out of the cold war.

    Minutes after being sworn into office at the colonial-era Presidential Office on a muggy May morning in Taipei’s decrepit west side, Ma sped across town where an arena full of supporters waited for his inaugural address in air-conditioned comfort. Later in the day, president Ma and his guests sped at 275 kilometers per hour down to Kaohsiung in Taiwan’s deep south for a banquet and fireworks to celebrate inauguration of Taiwan’s third democratically elected president. As a successful ad had promised during the campaign, Mr. Ma was ready to take office.

    While Mr. Ma dazzled Taiwan with his speed, his rhetoric plodded. But this was intentional and minded to persuade its distance audience in Beijing. Unlike his predecessors, Mr. Ma failed to affirm Taiwan’s sovereignty explicitly. Nor did he reaffirm his striking commitment late in the presidential campaign to the principle that Taiwan’s future must be decided by its 23 million people.

    Instead, Mr. Ma argued that Taiwan and China’s differences are not over issues of sovereignty but rather core values and way of life. For Mr. Ma, Taiwan’s core values are the Confucian values of benevolence, righteousness, diligence, honesty, generosity and industriousness. Its way of life is what Mr. Ma earnestly hopes China will soon achieve: freedom, democracy, and prosperity

    In other words, Taiwan and China share a common Chinese heritage and one day may share a common political future. In the meantime, Mr. Ma, who promises maintaining a Taoist status quo of no independence and no unification, agrees with president Hu Jintao of China that the two sides can set aside their differences on sovereignty and negotiate on the basis of the 1992 Hong Kong consensus—a much-debated and probably fictitious agreement to disagree invented by the head of Ma’s national security council.

    As intended, China found these sentiments comforting, and replied late last week by echoing Ma’s appeal to the common interests of the Chinese people. While both sides continue to sound discordant notes—China’s references to the touchy subject of unification and Ma’s emphasis on the legitimacy of the Republic of China—these are messages intended for internal consumption. More importantly, both sides are building a common rhetorical framework based on the 1992 Consensus and an inclusive conception of a Chinese heritage that can encompass the polities of both China and Taiwan under one Heaven.

    Beijing was probably also reassured by Ma’s coded comments on the crucial issue of US weapon sales to Taiwan. While the large visiting US delegation may have heard a commitment to purchase arms, Ma in fact imposed three conditions on weapons sales—they must be reasonable, necessary, and defensive. These conditions echo the key vocabulary that Ma’s KMT mobilized over the last eight years to justify using its legislative majority to block budgets for arms purchases dozens of times. If Mr. Ma fails to upgrade Taiwan’s defense, Taiwan’s opening to China will become a tilt toward China.

    While prospects for ending the anachronistic cold war across the Taiwan Strait are now realistic for the first time in 60 years, Mr. Ma’s presidency faces two major challenges. The first is obvious—Mr. Ma has staked his presidency on China’s willingness accommodate Taiwan with a less hostile foreign policy and normalized economic relations. Given China’s vastly improved understanding of Taiwan’s internal politics and sensibilities evidenced in a remarkable statement by the Taiwan Affairs Office recognizing the desire of the Taiwanese to be “masters of their own house” (dangjia zuozhu), Mr. Ma may well win this bet.

    Mr. Ma’s second challenge is perhaps less obvious. While the world is watching his opening to China, Taiwan elected Mr. Ma to fix Taiwan’s economy. This will not be an easy task. Taiwan’s economy is undergoing a wrenching shift from isolated, export-oriented manufacturing powerhouse with a protected, largely socialist domestic economy to a knowledge and service-based part of the global economy.

    As in other economies, that shift has caused profound dislocations in Taiwan’s internal economy that Mr. Ma and his allies in Taiwan’s media has successfully portrayed domestically and abroad as being the result of his predecessor’s incompetence and obstinate refusal to open up to China.

    Mr. Ma’s domestic policies—centered on old-fashioned gigantic infrastructure projects—will be executed by a team of brainy technocrats from Taiwan’s top universities, many of whom served in past KMT administrations. As in other Chinese societies, Mr. Ma and his team axiomatically believe that enlightened rulers with the right moral stuff can direct and control the economy. This view of government worked fairly well under Mr. Ma’s mentor Chiang Ching-kuo during the 1970s and 1980s when Taiwan, sealed off from outside world and under martial law, pumped out cheap manufactured goods to the US. But if Mr. Ma’s brain trust cannot guide Taiwan’s economy through this painful period of transition, or if his advisers’ technocratic instincts are not sensitive enough to the electorate’s deep unhappiness over rising prices and stagnant salaries, Mr. Ma’s biggest challenge will not be China, but Taiwan’s internal discontents.


    Some excellent observations in there from a very smart watcher of Taiwan affairs.

    Two Views of Ma

    I believe in equality for everyone, except reporters and photographers. -- Gandhi

    The international media came out with two views of Ma this week that make a startling contrast. One in Forbes refers to Ma's past in the KMT party-state, rare for a piece in the international media. The other, from Tom Plate at AsiaMedia, discusses Ma with the balance and fidelity to truth of a thirteen year old girl describing a teacher she has a crush on. Regrettably, the Plate commentary was widely distributed around the world.

    Plate opines:

    Taiwan supporters and relatives from sweeping southern California jumped around the room as if partying for the Chinese New Year. Viewing a live TV-feed from Taipei, the cramped crowd erupted into something akin to delirium when the new president took the podium. His name is Ma Ying-jeou, 57, he went to Harvard, and my wife volunteers that he is quite good looking.

    Handsome or whatever, he gave a terrific inaugural speech that is important for everyone to know about. That's because the policy directions taken in Taipei regarding its head-to-head relationship with Beijing could help determine whether someday a war erupts in Asia.

    I've reviewed Ma's speech below; I don't know anyone who thought it was terrific. It was at best a terribly timid speech, totally China-centric, and lacking in any great vision, as Ruan Ming pointed out in the Taipei Times today. It's fun to read comments in Plate's piece like:

    The final point is that it is very unlikely that Beijing, for the foreseeable future anyway, will find a better man with whom to negotiate than Ma. He's sensible, international, and is strong on the vision thing. He wants to lift the internationally touchy bilateral relationship out of the basement of adolescent rivalry and into the master sitting room of adult diplomacy. China should exert every effort to work with him to its greatest abilities.

    This paragraph is the purest dreck. The idea that Ma is "international" is laughable. Ma mentioned only the US in his speech, and then focused on China. Japan, whom he had supposedly been mending fences with, did not rate a mention, much to the ire of the Japanese Foreign Ministry. A broad reference sufficed for Taipei's diplomatic allies, and its Pacific neighbors appeared not at all, nor was there any future-oriented remark about India, or anywhere else. Ma may talk global, but he thinks local. Ma's "vision" is rooted in the Confucian values he instanced in his speech, which conspicuously avoided any mention of liberal democratic values. Ma remains the man who threatened Taiwan's bureaucrats with revenge two years ago, sued the prosecutor who took him to court for corruption, and cites Tang poetry when he visits farmers in rural Taiwan. You need only compare him to Lee Teng-hui, as Ruan Ming notes:

    Ma should not forget that, in May 1996, Taiwan’s first popularly elected president, Lee Teng-hui (李登輝), clearly said at the beginning of his inaugural speech: “Today, 21.3 million compatriots are officially entering a new era, under which sovereignty is in the hands of the people!”

    But Ma said: “In resolving cross-strait issues, what matters is not sovereignty but core values and way of life.”

    "No better man?" For each the last eight years there was a better man than Ma in office in Taiwan -- one who defended dissidents instead of attacking them, one who passed the bar that Ma failed, one who made dynamic changes in the same city that Ma did very little for, one that had a vision of Taiwan as something bigger than just another satrapy in the empire run from Beijing. One who opened his first administration with a pragmatic and open approach to cross-strait relations. That would have been a worthy man for Beijing to negotiate with. But Beijing lacked the stature to engage with Chen. Instead it schemed with the KMT to place a pliable counterpart in office.

    Note also that Plate regurgitates a key media trope: that of the DPP as immature. Here the immaturity is glossed as "adolescent." The reality is that it was China, not the DPP, that refused to engage in talks. Real issues, not adolescent games, are at stake in the struggle between Taiwan's independence movement and Beijing's annexation drive. Consider these lines from Plate about Ma:

    That's why his initial speech as president was a work of considerable diplomatic artifice.

    He avoided antagonizing the mainland while not giving the keys to the island to the boys in Beijing. Instead of speaking in grand (and illusive) concepts, he proposed practical, step-by-step negotiations designed to build confidence and trust.

    There were numerous attempts on the DPP's part to initiate negotiations with Beijing, and substantive talks were conducted on all sorts of issues. But here Plate, by inference, paints the complex diplomacy between Taiwan and China under Chen as just a matter of "grand and illusive" concepts. But the cold hard fact is that the "step-by-step negotiations" that Plate refers to (hard to tell because Ma does not refer to any steps), which I assume must mean the talks on tourists and on direct charter flights, are not Ma's idea but were initiated under the DPP.

    Oh yeah. Those "grand and illusive" thinkers legalized Taiwanese investment in China, set up a system of direct charter flights, brought in 1,000 tourists from China a day, erected frameworks for professionals to come work here and for Chinese to purchase land here, conducted talks on the return of criminals from China to Taiwan, initiated and extended a wide range of exchanges, and sundry other stuff too numerous to mention. But Plate's presentation, dominated almost entirely by stereotypes Beijing has fed to the international media, fails to take the proper measure of the previous administration.

    Ordinarily I'd recommend reading a whole item I put up here, but you'll want those two minutes of your life back.

    Very different is the piece from Forbes. For one thing, it places Ma in the context of his past in the martial law era, something unheard of in international media presentations:

    Ma spent much of his career as a technocrat during the era of one-party rule under the Nationalist Party, or Kuomintang. He earned a reputation as a competent if cautious administrator.

    That was before Taiwan began experimenting with democracy in the 1990s. Like Chinese President Hu Jintao and other Beijing offiicals, Ma was a bona fide party cadre, dutifully serving its interests. At times, he even employed political rhetoric that echoed what is routinely articulated by Beijing officialdom. While serving as the party's deputy secretary-general in the mid-1980s, Ma assiduously deflected criticism of the harsh restrictions the regime imposed on the Taiwanese, famously remarking that "we only enforced 3% of the martial law."

    The article dances around Ma's commitment to martial law, but it does come out and say that he supported it. Great work here. The article goes on to describe Ma's rise and has some interesting observations from former Chen Shui-bian advisor Antonio Chiang:

    Ma's recently deceased father was a middling party official who fled China with the Nationalists. The elder Ma was in charge of the Kuomintang’s youth league, similar to Hu's early role within the Chinese Communist Party, educating students in party doctrine. Ma senior instilled in his son the disciplines of traditonal Confucian ethics, plus a great sense of historical mission and patriotism.

    Ma gained entry into politics the old-fashioned way: through connections. Thanks to his father's networking efforts, Ma got a job--not long after graduating from Harvard University--working as an English translator in the office of Taiwan's President Chiang Ching-kuo.

    But the democratic maelstrom that engulfed Taiwan in the late 1990s transformed Ma as well; he adapted to become a consummate politician. Gone were the dry, stodgy party speeches, replaced by a snappier, more media-savvy delivery and remarks peppered with slang as well as the day-to-day expressions common in the Fujian dialect he recently picked up.

    Antonio Chiang, a political columnist with the popular Apple Daily newspaper in Taiwan, who has known Ma since their school years, said Ma does not socialize with politicians. Instead, he has surrounded himself with young intellectuals: academics, journalists and writers. For his campaign staff, he recruited no one from the party or the ranks of the civil service or legislature.

    "He is no longer the former bureaucrat. He seems to have taken on a new platform," Chiang said. "He has always been too slow and often found himself on the wrong side of history but then tried to adjust himself to the new environment. We need to give him the benefit of doubt."

    The Forbes piece is about 60% the length of Plate's, yet it is far more balanced and informative. What a shame....

    Net Nannied!

    So there I was, like any red-blooded American male, running my daily searches on guns, booze, drugs, and porn, when suddenly Chungahwa Telecom's net nanny swooped in to save me from my dark side. My screen turned Aqua and I was presented with the net nanny warning -- in the form of an angel, an interesting globalization moment.

    Apparently the company is demoing a net nanny service slated to begin June 1 and had bamboozled my wife into signing on. A phone call quickly solved the problem. The company insisted on talking to my wife before they turned it off; apparently a way to prevent teenage porn freaks from masquerading as a parent and getting the service turned off.

    Wednesday, May 28, 2008

    "Both sides are tied by blood..."

    "Signs of warming ties" is how the international media defines KMT Chairman Wu Po-hsiung's current visit to China. Reuters reports:

    China and Taiwan edged closer to a resumption of fence-mending talks on Tuesday when the chairman of the island's ruling party echoed the Chinese line that both sides are part of a single nation.

    China, which has claimed Taiwan as its own since their split in 1949 amid civil war, has softened its policy towards the self-ruled island from pushing for unification with the threat of force to one of preventing a declaration of independence.

    "Both sides are tied by blood to the Chinese nation and this cannot be obliterated by anyone," Taiwan's Nationalist Party, or Kuomintang (KMT), Chairman Wu Poh-hsiung said in Nanjing, the capital when the KMT ruled all of China.

    Taiwan's new president, Ma Ying-jeou, also made the pledge -- a move Beijing considers a political necessity for talks frozen since 1999 to resume -- in his May 20 inauguration speech.

    On the thread on Ma's inaugural speech we've been discussing exactly what Ma meant when he said that the "two sides of the Strait are both Chunghwa minzu." Reuters apparently thinks it is a reference to an ethnic construction of Chinese identity, coded assimilationist rhetoric. Wu himself neatly straddles many of the ethnic identity issues in Taiwan. Wu is a Hakka, who were some of the earliest migrants to Taiwan. The Hakka constitute only a minuscule fraction of the people in China, but were something like 25% of the pre-1949 Taiwan population. "Being Hakka" is further confused because many Hakkas are Sinicized aboriginal groups who "became Hakka" when they assimilated to the dominant colonial majority. There is a long history of conflict between Hakka and non-Hakka (Hoklo) immigrants to Taiwan, with the result that the Hakka are predominantly pro-KMT, wooed by that party as part of its strategy of divide-n-rule based on ethnic politics. Hence the many layers of meaning in Wu telling an official of China that he is "of the same blood." .

    Reuters reports:
    China spurned the DPP, which was routed in the March presidential elections by the KMT. The Nationalists oppose independence but are in no hurry to get into bed with China politically.

    "In no hurry to get into bed with China politically." It is May of 2008, the KMT and the CCP have been talking to each other privately for many years, and still no international media publication has mentioned the back channel talks. I guess since it's been going on for years, it's not news....

    Another key cross-strait meeting is happening this week in Kaohsiung where university presidents from China and Taiwan are meeting to discuss exchanges.

    Presidents of both Taiwanese and Chinese universities met in southern Taiwan's Kaohsiung County Monday to share views on potential academic exchanges among the universities.

    The conference was held at the I-Shou University in the southern county, and was followed by a symposium on science and technology covering topics in material science, environmental science, life science, and telecommunications.

    Sixteen universities participated, including China's Qingdao University and Ocean University of China as well as National Cheng Kung University and National University of Kaohsiung in Taiwan.

    Conference participants exchanged views on the universities' educational systems, enrollment, internationalization, management, and administrative systems.

    Credit system and a joint degree program that requires certain years of learning in a domestic school and a couple of years in a foreign school were two focuses of discussions.

    Student exchanges are already underway; I have two Chinese exchange students in my classes here at NCKU. The talks are being held against the backdrop of increasing financial pressure on Taiwan's universities. The subsidy system set up in the 1990s encouraged a massive expansion in the university system (many construction firms opened universities to farm the government subsidy regime) resulting in a shortage of warm bodies to fill classrooms -- forcing universities to raise tuition to stay alive -- a perverse effect of subsidies intended to make it easier for kids to go to college. Further, with many universities having opened graduate and PHD programs in recent years, there is a steady and increasing supply of new PHDs entering the local academic market looking for work. Taiwan universities have been arguing that the island should open to students from China to fill the empty seats.

    On the lighter side of cross-strait relations, Taiwan's wedding photo business is hopping on the cargo cult bandwagon with the claim that 5,000 couples from China will be visiting to have wedding photos done here....

    About 5,000 couples from China will get wedding photos taken at Taiwan's world-renowned studios, which seldom receive them now due to political tensions, as part of a travel agreement, an industry source said on Monday.

    A cultural promotion company close to the Chinese government has agreed with Taiwan's Saromant International Wedding Photo Group chain to send the couples over on direct weekend flights expected to begin in July pending a long-awaited agreement between the two sides, said chain CEO Celine Liu.

    About 20 couples from Beijing have signed for the first weekend flight, Liu told Reuters.

    Taiwan, with 1,300 wedding studios seeking new business as local clients save their money in tight economic times, has long been known among ethnic Chinese in Hong Kong, Southeast Asia and the United States for packages that include attire for the bride and groom plus access to coastal or mountain photo scenery.

    The wedding photo business is one of Taiwan's most fascinating cultural products.

    MEDIA NOTES: Reuters still has China and Taiwan "splitting in 1949" although Taiwan was not owned by China at that time, but by Japan.

    AmCham's New White Paper

    The American Chamber of Commerce in Taipei has just released its annual White Paper full of advice for the government (White Paper). Their press release notes:

    In the Overview section, entitled “Getting Down to Business,” the Chamber notes that the new administration is starting its term amid high hopes and expectations, but that it now faces the difficult task of producing concrete results. Part of that task will be to restore an atmosphere of greater social harmony after a long period of emotionally charged political strife, the Chamber said. Simply diminishing the harsh rhetoric and divisiveness that characterized the Taiwan political arena for too long will help revive business’s willingness to invest and consumers’ willingness to spend.

    The Kuomintang’s substantial election victories this year should end the painful policy gridlock that Taiwan was often subjected to in recent years, said AmCham, but with that electoral success comes immense responsibility. The KMT must also guard carefully against a return to “black gold” and other forms of corruption, especially when the opposition has been weakened and the pro-blue media may be less of a watchdog than before.

    AmCham reiterated its long-held position in favor of eased economic interflows across the Taiwan Strait, with particular reference to expanded non-stop charter flights. If air travel between Taiwan and mainland cities becomes time-saving and convenient, more multinational – and Taiwanese – companies will choose to locate more key personnel and business units in Taiwan for reasons of quality of life, IPR protection, and other rule of law issues, it said. The Chamber called on Beijing to appreciate the special opportunity created by the current political environment in Taiwan, and therefore to respond positively to the Ma administration’s initiatives. In addition, it asked the Taiwan government to take action on measures that it could implement unilaterally, such as removing caps on direct Taiwanese investment in China and on mutual fund investments with China holdings, and eliminating “frivolous” items such as potato chips from the list of products banned from being imported from China.

    The White Paper also stressed the need for further deregulation to address such problems in the regulatory environment as inconsistent interpretations, inadequate transparency and due process, and departures from international best practices. It praised recent improvements, including eased entry and work-permit rules for foreign professionals and the drafting of a Financial Services Act. But it noted the need for a reorganized National Communications Commission to grapple with crucial policy matters, and for the National Health Insurance system to ensure both financial solvency and optimal patient care. It also pointed to the importance of ensuring that foreign companies can compete fairly for contracts in the planned new i-Taiwan infrastructure projects, so that Taiwan has benefit of the high-quality infrastructure they can build.

    The paper also directs suggestions at the US, including calling for US support for Taiwan's WHA bid:
    • Assist Taiwan in mitigating the consequences of international isolation, for example by helping it attain observer status in the World Health Assembly.
    • Remove Taiwan from the Special 301 Watch List regarding IPR violations.
    • Pursue trade policies that promote economic liberalization, such as restoring the president’s “fast-track” authority and exploring the negotiation of bilateral agreements with Taiwan.
    • End tax-policy discrimination against U.S. citizens overseas.

    The Chamber's appeals to the people of Taiwan are interesting. Each year it asks for stepped-up enforcement of fake agrochemicals and for Taiwan to clean up its water, something the island could easily afford to do. But in addition to the usual appeals for direct flights and for more government enforcement of intellectual property rights, AmCham also calls for more legislative transparency and greater multiparty democracy, saying that Taiwan's polarized political environment gives businesses a lack of confidence in the island. Laudable comments -- if only AmCham had made them louder in the most recent election, instead of openly siding with the KMT in so many policy areas.

    Kaohsiung MRT bikes

    The new Kaohsiung MRT has a new bike to go with it.

    The Kaohsiung Rapid Transit Corp. (KRTC) launched its first folding bike produced under trademark license, as prototype for a future metro souvenir model, according to KRTC General Manager Fan Chen-po Tuesday.

    Fan said the new bike comes in the color white, weighs 12.9 kg, has a maximum carrying capacity of 100 kg and can be folded in about one second.

    The bike can be easily carried on and off MRT trains, and would have long product life once it not treated like a mountain bike, Fan said.

    The KRTC launched its first folding bike to mark the inauguration of the system in March, but that model did not carry the KRTC's trademark "K," as the new one does.

    Huang Chih-shu, general manager of Kentfa Advanced Technology Corp. which manufactured the bike, encouraged the public to buy the bike, saying that it was made in Taiwan from locally available materials.

    The KRTC announced at the end of April that passengers would be permitted to carry folding bikes of all sizes on its MRT trains during a test period from May 4 to July 6. After that period, there is a limit on the size of the folding bikes allowed on the trains, it said.
    It's too bad that there is not one car designated for larger folding bikes, especially on the weekends when bikers are out in force.

    Tuesday, May 27, 2008

    Patterns in the international media

    From the moment of my birth
    To the instant of my death,
    There are patterns I must follow
    Just as I must breathe each breath.
    Like a rat in a maze
    The path before me lies,
    And the pattern never alters
    Until the rat dies.

    There's a clearly discernible pattern in the way the international media views Taiwan. In the western media, characterized by the major news services like AP, Reuters, AFP, DPA, and BBC, the view is a kind of patronizing contempt for Taiwan's democracy, in many cases leading to outright regurgitation of Beijing's viewpoints. In that media President Chen's pro-independence stance is almost always presented as irrational. He "rages." Independence supporters are "diehards." The contrast with Europe reveals a stark double standard -- supporters of independence for, say, Estonia, are never presented so negatively -- indeed, if you type Estonia diehard into Google, the only references to diehard supporters are to pro-Communists (like here, here, or here). In terms of promoting understanding of Taiwan's democracy movement as an authoritarian transition as it did with Soviet-occupied Europe or Francoist Spain, the western media have totally failed our island, and in doing so, the worldwide cause of democracy.

    The second group consists of the Chinese media outside Taiwan in Hong Kong and Singapore. These commentators appear to passionately hate the idea of an independent and democratic Taiwan. For example, the Singapore reporter Ching Cheong, who was ironically jailed in China on charges of spying for Taiwan, is positively venomous when it comes to the island's democracy and independence movement. From yesterday's Straits Times:

    Under Mr Ma's predecessor Chen Shui-bian, Taiwan's democracy was noted for its shoddiness. As President Ma noted in his inaugural speech, the process of democracy was marred by 'illegal eavesdropping, arbitrary justice and political interference in the electoral institutions'.

    The remainder of the article is a puff piece in a similar vein, that connects Taiwan's democracy back to Sun Yat-sen instead of back to the Taiwan autonomy movements under the Japanese where it properly belongs. Ching Cheong may hate what the "diehards" wrought, but Taiwan is never going to arrest him no matter he says about it.

    The final and I think, most interesting, set of writers on Taiwan are local newspaper commentators. They are almost entirely positive. The latest example is Miro Cernetig's piece in the Vancouver Sun arguing that British Columbia should engage more with our island:

    I had dinner the other night with the forgotten Chinese. You know, the creators of the sort of China our western leaders all say they want to see -- namely a democratic, outward-looking society where human rights violations, peasant poverty and purges led by secret police are largely relegated to history.

    Well, the Taiwanese, the Chinese who fled Mao's revolution to a tiny island chain in the South China Sea, have done all of that, all under China's unhappy gaze: they have held tenaciously onto their independence, built what looks like a stable democracy and created the world's 18th largest economy.

    Not bad. Too bad British Columbia and Canada are largely ignoring Taiwan and the tremendous trade opportunities it now offers. Taiwan is the missing link in our Pacific Gateway strategy.
    Cernetig's geography may be a bit off, but his heart is in the right place. It seems sometimes that there's a lot more sympathy out there among locals in faraway places for our democracy, than among the media people who benefit from it right at home.

    Monday, May 26, 2008

    More on the "Chinese People"

    A-gu over at That's Impossible! had another great catch today with the words of KMT Chairman Wu Po-hsiung as he greeted Chinese officials on his "historic" trip to China.


    After some pro-forma remarks about the Sichuan quake, Wu then observed that "the two sides of the Strait belong to the Chinese [ethnic] people." A-gu opines that the KMT is now spreading this around as a way to get around the sovereignty issue. There are still those out there who fondly imagine that Ma will safeguard Taiwan's sovereignty....not with this catchphrase.

    Another development this week was the suggestion that Taipei and Beijing open representative offices in each other's capitals. According to the China Post, this came from the new MAC Chairman Lai Shin-yuan...

    According to Lai's position, the government here would welcome the intermediary organizations representing both sides in negotiations to set up representative offices in each other's territory. This means that Taiwan's Straits Exchange Foundation (SEF) would open an office in mainland China, while Beijing's Association for Relations Across the Taiwan Strait (ARATS) would do the same in Taiwan.
    Note that by using the "non-governmental" organizations in charge of cross-straits relations, each side avoids the issue of whether they should deal with the other as a "government."

    Diane Lee and US Citizenship

    The Diane Lee (李慶安) case broke last week when a local tabloid, Next magazine, reported that Lee, a prominent KMT legislator, had US citizenship. It is illegal for ROC elected officials to hold office while being a citizen of another country, so Lee was immediately threatened with the loss of her seat in Taipei city's sixth district and lots of cash. Denying everything, she threatened to sue....

    She said she obtained permanent residency in the US in 1985 and citizenship in 1991, but later gave up her citizenship.

    Article 20 of the Nationality Law (國籍法), which took effect on June 20, 2001, states that foreign citizens are prohibited from holding government office.

    The Democratic Progressive Party (DPP) caucus reported Lee’s case to the Taipei Prosecutors’ Office for investigation after the Next article in March.

    Lee would have to return her salary as a Taipei City council from 1994 to 1998 and as a legislator since 1998 — estimated at NT$100 million (US$3.2 million) — if the allegation is true.

    She would also lose her job as a legislator, forcing a by-election in Taipei City’s sixth district.

    The Ministry of Foreign Affairs has denied Next's allegations that it investigated Lee's citizenship. Although the case has only surfaced recently, apparently the DPP referred the case to Taipei prosecutors back in March.

    The DPP caucus reported Lee’s case to the Taipei Prosecutors’ Office for investigation in March.


    Wang said yesterday that the legislature had referred two related proposals — one by the DPP to investigate the nationality status of all lawmakers and the other by the KMT that would include all government officials — to cross-party negotiation.

    The parties agreed on the KMT version of the bill on Friday. Dual citizenship is not exactly unknown among the governing classes; given that the greater number of government officials are KMT, it would seem that any investigation of citizenship would punish that party more. Meanwhile the US has issued almost the same characterizations of the Lee's citizenship issue that it did for Ma's alleged Green card:

    The Central News Agency (CNA) yesterday cited an unnamed U.S. State Department official as saying that American citizens do not automatically lose their citizenship just because they are serving in a foreign government.

    Any U.S. nationals who want to give up their citizenship must complete all formalities, which include the signing of an oath of renunciation before a U.S. diplomatic or consular officer at a U.S. embassy or consulate, the official was cited as saying.

    "Renunciations that do not meet the conditions described above have no legal effect," the official said.

    The U.S. official explained that although serving in a foreign government is one of the legal conditions for the loss of nationality, the U.S. Immigration and Nationality Act also states that such an act must be performed "voluntarily and with intent to relinquish U.S. citizenship."

    Therefore, the formalities must be completed, he said.

    In other words you can't "automatically" lose your citizenship -- you have to take serious and purposeful steps to give it up. Unless Lee has carried out the process with the US government, she has not lost her citizenship. And if she has US citizenship, she's toast....

    Who benefits? Well, Lien Chan's son appears to be the likely KMT candidate in case of a by-election.
    A son of former Kuomintang (KMT) Chairman Lien Chan has downplayed speculation that he stands a good chance of succeeding a legislator who may lose her seat because of allegedly possessing dual nationality.

    Lien Sheng-wen said until the judicial authorities have made a ruling against KMT Legislator Diane Lee over her alleged dual nationality case, the by-election is not a real issue.
    All I will say about the younger Lien is that he is a fine illustration of the old saying that "the apple does not fall far from the tree."

    Lee was one of the legislators who originally defected from the KMT to the PFP and then went back again a couple of years ago, and one of the loudest voices calling for a reconciliation of the two parties. At one time it looked as though she might be headed for greater posts, having contemplated a run at Taipei mayor. She is the daughter of the very influential KMT official Lee Huan, one of the Old Guard KMT who opposed the accession of Lee Teng-hui to the KMT Chairmanship.

    Paper on Parade: Cigarettes and Betel Nut in Taiwan

    I don't smoke and I don't chew betel nut, so this week I am looking at new territory for myself, the work of a group of academics led by C. P. Wen at the National Health Research Institutes in Taipei on the relationship between betel nut use and cigarette market opening in Taiwan: Paradoxical increase in cigarette smuggling after the market opening in Taiwan, C P Wen, R A Peterson, T Y D Cheng, S P Tsai, M P Eriksen, & T Chen. (Tobacco Control 2006;15:160-165.).

    The paper highlights an interesting fact that some might find paradoxical: that after the cigarette market was opened in Taiwan, smuggling skyrocketed. Further, the smuggled brand quickly became the most popular brand on the Taiwan market.

    As most foreigners with any experience of Taiwan are aware, Taiwan's government operates a cigarette manufacturing concern, the Taiwan Tobacco and Wine Monopoly Bureau. Prior to 1987 it was the sole provider of cigarettes to the Taiwan market. Foreign cigarettes were imported but under very high tariffs, discouraging consumption, and encouraging smuggling. In 1986, according to Wen et al., 9% of all smuggled cigarettes, some 4,800 cases, were intercepted by the police.

    In 1987 cigarette firms in the United States, not satisfied with killing their own people, decided it would be a good idea to force open the Taiwan market using the so-called "Super 301" club. This market opening, which saw a tenfold increase in the number of legal imports, also drove a similar gigantic increase in smuggling, which in some years exceeded the number of legally imported cigarettes. The bulk of smuggled cigarettes were Japanese, products of Japan Tobacco International (JTI), up to 90% in some years.

    Moreover, not only were smuggled cigarettes plentiful, they also commanded a premium. Because they were not held up at customs to pay tariffs, smokers believed that smuggled cigarettes were fresher. With the massive smuggling by JTI, its brand Mild Seven quickly became the most popular brand among young smokers, as smoking rates rose. This increase in smoking occurred during the same period that betel nut use was on the rise; the two have a powerful synergistic effect on health. Another paper by Wen's group found that in the group of males aged 30-49 in Taiwan, 1 in 3 both smoked and chewed betel nut in 2001; more than 90% of those who chew betel nut in the 20-65 age group also smoke. In yet another paper, Wen et al pointed out that since the Monopoly Bureau lacked the technology to produce low-tar cigarettes, foreign companies marketing "light" cigarettes attracted new smokers. Ironically, in yet another perverse effect of the anti-smoking campaign, light cigarettes got a boost from being perceived as healthier.

    What is the connection to betel nut? In the late 1980s betel nut stands were spreading, and cigarette marketers quickly grasped the importance of the small stands as a marketing channel. Foreign cigarette marketers, including smugglers, approached the owners of the stands and a natural synergy was discovered. They rapidly became the main venue for smuggled cigarettes. Since the cigarette market was ten times larger than the betel nut market, it is fair to ask whether betel nut stands would ever have become so common without cigarette smuggling.

    The government fought back by attempting to intercept smuggled cigarettes, but it never had any serious impact. Worse still, the government auctioned off seized cigarettes, meaning that the products were simply put back on the market -- essentially, providing free marketing for Japanese cigarette companies. US companies vociferously protested this policy, and in the end the Taiwan government took to destroying contraband cigarettes.

    At about the same time other Asian countries also saw their markets forced open, but only Taiwan saw such large rises in foreign cigarette consumption. This was driven largely by smuggling.

    Wen et al obtained documents from foreign cigarette companies, for whom smuggling was an important business strategy (US cigarette consumption in Taiwan was about 1/6 smuggled). Some of the companies set up business units specifically aimed at smuggling cigarettes into Taiwan. Under the terms of the market opening, Japanese firms were basically excluded because of Taiwan's unfavorable trade balance with that nation. European firms were welcome, however. JTI, nothing daunted, opened a factory in Switzerland (later Manchester as well) with the sole purpose of providing cover for its smuggled cigarettes. JTI's competitors claimed in their internal documents that it smuggled in 10-20 times its legal quota of cigarettes. Since importing from Europe was costly, it is clear that all of the smuggled cigarettes, or about 80% of the Mild Seven brand sold in Taiwan, had to be brought in from Japan. It is important to note that the smuggling was a perverse result of the fact that the "liberalization" excluded Japan; once Japanese smokes were legalized in 1995, JTI shifted away from smuggled products.

    The effects of all this smuggling lingered on, Wen et al. point out. As late as 2002 half of all imported cigarettes sold to the young were smuggled. In many countries liberalization was followed by smuggling; yet Taiwan outdid them all. Not only was this massive smuggling unique, it occurred despite the fact that Taiwan's cigarette prices were among the lowest in the world!

    The 10–22% of the proportion of smuggling on the entire cigarette market witnessed in Taiwan in the 1990s were two to three times higher than the 6–8.5% estimated smuggling rate worldwide by Merriman et al. This massive smuggling occurred despite the fact that cigarette prices in Taiwan have been rated as one of the lowest in the world, particularly taking into account the cost of living. This apparent paradox is supportive of the belief that an increase in cigarette prices or the amount of tax is not necessarily a major factor in its relationship with the extent of smuggling. Many countries with higher-priced cigarettes saw very little smuggling, while some lower-priced countries had more smuggling. The transparency of the governmental policy, or the lack thereof, and the commitment to cracking down on smuggling have been more important in determining the extent of smuggling.

    No discussion of Taiwan's health situation is complete without mentioning our exclusion from WHO. During this period the WHO was running "Project Crocodile," an anti-cigarette smuggling program involving 16 nations in East Asian. But not, however, The Beautiful Island. Just another example of how exclusion from WHO hurts the people of Taiwan.

    Sadly, as Wen et al point out in another paper, foreign cigarette companies appeared to target the young. The preference for imports among the young shot up from 2% to 77% within 15 years of the market opening, showing a 16% rise in the first four years. Fortunately youth cigarette use has declined since the 1990s, pacing a general decline in adult smoking in Taiwan.

    Sunday, May 25, 2008

    Good thing checkbook diplomacy is on the wane...

    It's a good thing that checkbook diplomacy is going to be shut down, because it seems to be reaching absurd proportions as Paraguay claims Taiwan has pledged $71 million in aid.

    Taiwan denied promising Paraguay's incoming government that it would donate 71 million dollars to the South American nation, a newspaper said Sunday. "We are unaware of this. We will try to find out if there was some misunderstanding," the United Daily News quoted Foreign Ministry acting spokeswoman Phoebe Yeh as saying.

    Yeh was responding to a Saturday report by Taiwan's Central News Agency (CNA), which quoted Paraguay's vice president-elect Federico Franco as saying Taiwan had pledged 71 million US dollars to the government of president-elect Fernando Lugo for a land deal to help landless citizens.

    "There are many cooperation projects between Taiwan and Paraguay. But the news report refers to a new aid which has not been publicized. The new Paraguayan government has not been sworn in yet, so it is unlikely for us to discuss new aid with them," she added.

    Lugo, a former leftist Catholic bishop, won the April presidential election and will be sworn in on August 15 for a five-year term.

    Paraguay is one of 23 countries which recognize Taiwan, and is Taiwan's only ally in South America, but Taiwan is concerned the nation could pursue ties with China at its expense.

    The article also reports that President Ma is headed overseas to visit the Americas, including a trip to the US to meet with US officials.

    I've posted on the Paraguay issue before. The Paraguay experience offers many parallels to Taiwan's. There the Colorado party dominated the landscape for 60 years with the same system of patronage networks and authoritarian control. A friend flipped me this description of Paraguay that sounds just like Taiwan:

    This frustrating condition is the natural consequence of 61 years under the bad governance of the Colorado Party, but it shouldn't be forgotten that in that long period -which included the 35 year long iron grip of General Schroedder- this political entity receive dthe support of the mayority of the Paraguayan people. Even in these last elections, Mr. Lugo won with 40% of the votes because his Colorado rivals were divided in two currents, which got only 30 and 21 per cent respectively.

    Hence, the Paraguayans have not only been victims of the bad Colorado administrations, they have also been their accomplices, which should not scandalize us. It happens in all the countries where there client relationships prevail. In them, political power becomes a great source of riches, privileges, public jobs, and social prestige, or, on the other hand, the tough hand that punishes, deprives or cruelly harrasses its adversaries. That is why client governments (ask the Argentinians about peronism) have so many followers.
    In other diplomatic news, Fred Chien, former diplomatic representative to the US and second generation old guard KMTer, says that the "National Unification Guidelines" need to be restored:

    Adopted by the Executive Yuan in 1993, the guidelines declare there is but one China, where two different government entities exist, each not subordinate to the other, though both wish for eventual unification. Progress towards that unification should be made in three stages, according to the guidelines, which President Chen Shui-bian virtually terminated in 2005 despite his promise not to do so.

    Chen had the guidelines "cease to function" and the National Unification Council "cease to function" at the same time to the chagrin of Beijing and Washington. He pledged not to abolish either in two inaugural addresses in 2000 and 2004.

    Taiwan finds best protection against attacks from China in these guidelines, Chien said. Taiwan will build mutual trust with China in the second stage of Taipei's master plan to accomplish peaceful Chinese unification. The island nation is now in that second stage, while China has continued its two-digit increase in military spending. Taiwan cannot afford an arms race with China.

    China won't attack Taiwan if independence isn't declared in Taipei. Nor will it unless there is serious political upheaval. "So long as the guidelines are scrupulously observed," Chien pointed out, "the people of Taiwan are in no danger of being attacked and their sustained development is assured."

    That is all the more necessary after China adopted an anti-secession law in 2005, codifying an invasion of Taiwan if there occur moves toward de jure independence.

    "I hope and pray the guidelines will be made to apply again to bring peace and prosperity to Taiwan," Chien said.

    As a matter of fact, Chien stressed as far back as in 1992 Taiwan's China policy should take precedence over its foreign relations. "I came under fire for stressing that point," he recalled.

    The guidelines for "national unification" were not adopted in any democratic fashion. They'd make an excellent fodder for a referendum.

    As Ma moves in the Old Guard KMT are coming back in his wake to take over the Party. That's bad news. However, KMT elites are acting in their usual high-handed style, and the legislature is feeling shut out since it isn't being consulted. There's been some serious grumbling, and a couple of angry press conferences.

    Saturday, May 24, 2008

    Nelson Report on Ma Speech

    The latest Nelson Report contains more insight on the Ma inaugural address. My comments in brackets:

    TAIWAN...President Ma was inaugurated this week, an event witnessed by a large and varied US delegation, and his speech was much anticipated as an indicator of how he intends to pitch the political/diplomatic relationship with "the Mainland"...and with the US.

    We note in the Summary our sense of the letter personally delivered to Ma by a representative of Obama, that it reflects a sophisticated understanding of the language and nuances required in the cross Strait relationship for all three players...Washington, Taipei, and Beijing.[MT: the neglect of Japan and other nations is not just a Ma problem. Japan is also a player here, potentially a big one. More on that in a moment.]

    US-Taiwan relations under Ma's predecessor can best be described as "difficult", and as we reported at the time, they frequently sank to the level of toxic.

    The net is that friends of Taiwan, regardless of their political persuasion, have every reason to be concerned that the loss of trust may have fundamentally altered the equation between Washington and Taipei.

    Ma knows all of this, of course, and it will be interesting to see if his administration take advice suggesting a more sophisticated approach to making friends in Washington, one which includes a more serious focus on who is actually able to deliver help, and not just throw bombs.[MT: Haha. Washington is going to be very surprised when its love of Ma is returned with contempt.]

    In any event, we asked a senior US observer for an informed reaction to President Ma's speech:

    "The first task of any such speech is to do no harm. Don't make any big mistakes and don't offend anyone, for that can define the future. President Ma certainly fulfilled that goal.[MT: the "senior US observer" really missed one here. First, the Japanese were miffed that Ma didn't mention them. And second, Ma deeply offended his core aboriginal constituency with his comments on the "Chinese race," along with many on the pro-democracy side.][UPDATE: Max Hirsch at Kyodo has a great piece on the Japanese take on all this. A quote:
    Despite reports last week that Ma would pledge to bolster ties with Japan and reiterate his support for the U.S.-Japan Security Alliance in the speech, he made no mention of Tokyo.

    ''Some Japanese delegation members were disappointed by the omission and aired complaints to President Ma,'' says a Japanese official on condition of anonymity.

    Namely, delegation leader Takeo Hiranuma, who serves in Japan's powerful House of Representatives and leads a pro-Taiwan caucus, politely rapped Ma after the speech.

    ''If you are reelected in four years, I hope you'll clearly mention Japan in your next inaugural speech,'' Hiranuma told Ma, according to Taiwan's Government Information Office and the Japanese source. UPDATE: This is now revealed as a translator error -- Hiranuma merely asked him to make his next inaugural speech in Japanese.]
    [Nelson Report continued]
    One could take slight issue with some of his formulations about cross-Strait relations (sovereignty is an issue), but there were no medium or big mistakes at all.

    At best, a speech should be very inspiring. It should reshape the mental outlook of the listener. Barack Obama's speeches come to mind, but Obama is a very high standard to reach. And there are other considerations.

    Ma's speech, I am told, was written by a group. A group product is never completely satisfactory. Second, an inauguration speech has a different job from a campaign speech. Third, this speech came at the end of a long series of campaign speeches, so it's hard to be too much better.

    There is, I am sure, a cultural dimension here. American listeners may expect more from their politicians as speakers than Taiwan audiences. The language that Ma used may be as satisfying for a Taiwan audiences as that Obama uses for an American one.

    One potential task of an inaugural speech is to lay out a detailed program or detailed vision. Ma chose not to do that, and that is fine. It would be interesting to compare it in length to Lee Teng-hui's 1996 inaugural and CSB's two speeches. But after all the speeches and policy papers he had provided on a variety of subjects, the length was just right.

    It certainly was right for the crowd, which had been waiting for a long time, listening to often deafening music.

    An essential task of an inaugural speech is to reassure the various constituencies and stakeholders of a society. On the whole he did this very well. To the business community, he said, a KMT government will reshape economic policy to adapt to globalization (I hope he is truly serious on this).

    To the international community: Taiwan will not be a trouble-maker. To the Taiwanese majority: in terms of my upbringing, I am as Taiwanese as you are and will not betray your interests.[MT: but Ma clearly said that sovereignty is not important, a gross betrayal of Taiwanese interests. And further, there is the problem of Ma's concept of "the nation" as a distinctly Chinese polity.]

    I was particularly pleased that he began with his stress on making the Taiwan political system work better for Taiwan citizens. This is a crucial challenge and cannot be ignored.[MT: since the KMT is the chief architect of its problems, it is hard to see Ma making progress here.]

    The section on cross-Strait relations wasn't particularly new, which is fine. There were two important elements. One was to make an appeal for improving cross-Strait relations by referring to Hu Jintao's own recent statements. That is probably appropriate because it will be Hu who will have to make the strategic choice to engage Ma.

    The other is to talk about how the Republic of China and Taiwan have been intertwined. That is important because it is a reminder of the reality of the ROC and Beijing's need to face that reality at some time and in a way that is acceptable to the people of Taiwan."

    A shorter, but also informed take on Ma's speech by an observer on the (now minority) DPP side of the discussion...let's listen to see how the new Opposition might approach the handling of issues like sovereignty in the coming months:

    "I must say that on first reading I find Ma's speech interesting in three respects: first he mentions the relationship with the US in one short sentence, albeit with an emphasis on how the US is 'our foremost security ally and trading partner,' but then goes on at great length about the relationship with 'mainland' China.[MT: Yep. Ma placated the US but he identified with China. Can anyone guess which direction he's moving?]

    I realize this is all traditional territory for the KMT, but it does strike my ears as overwhelmingly focused on the relationship with the 'mainland.

    I was particularly struck by the sentence, 'In resolving cross-strait issues, what matters is not sovereignty but core values and way of life.'

    Sovereignty doesn't matter in resolving cross-strait issues? A lot of people are going to ask, 'What, is he giving away the farm already?'

    Second thing that I find interesting is the emphatic 'Chineseness' of the speech - the emphasis on the whole overseas Chinese community, Chinese values, the Chinese nation.

    Apparently a KMT Legislator who is an aborigine walked out of the speech and held a news conference when Ma said in the Chinese text, but not the translation as given, that 'we are all Chinese people'."

    Affairs with China proceed apace -- Kyodo News is reporting that China and Taiwan plan to open representative offices in their respective capitals to facilitate the burgeoning exchanges. Bruce Stokes has a piece in the National Journal on policy changes associated with Ma. As a piece of analysis it is thoroughly conventional and not very useful -- it even repeats the "Harvard-trained lawyer" nonsense -- but it does provide some insight into the way that many US analysts view Ma. I'll be examining it in detail when I have time today or tomorrow.

    Friday, May 23, 2008

    Daily Links, May 24, 2008

    In Taichung, a spider takes a break.

    Haven't had any spider pics for a while. I know that missing part of your life is now fulfilled.

    Tainan is full of interesting older buildings.

    What's out there on the blogs? The devilishly handsome Erik Lundh, who broke hearts all over the eastern seaboard when he flew out here on a quixotic mission to spare me, or perhaps my readers, from blogging about economics, has a couple of good posts on China-Taiwan economic relations on his new blog: a review of the new economic plans, and an economic take on Ma's speech. A-gu, as always, follows the legislature and its latest bills as well as the DPP's shadow government. Mark Harrison, as always, has an excellent and well-written piece on the media and Taiwan's democratization. I thought the first of Ma's promises to be broken would be the promise not to import Chinese labor, but it looks like it is the promise to achieve 6% growth. And one more from A-gu, who is on a roll: the KMT wants to subsidize political parties at $NT50 a vote. ROFL. Salon commentator and Taiwanophile Andrew Leonard is not happy with the selection of Paul Wolfowitz for the US-Taiwan Business Council.

    A vendor sells pineapples in Tanzi.

    My good friend Fili has some beautiful shots of the cosplay hobbyists out in force at NCKU. Johnny Z goes to the Hakka districts in Meinung.

    Women enjoy a morning chat in a Tainan park.

    J Michael calls for aid to go to Burma, not China. Mark has a good post on an investment analyst who argues Taiwan is a great place to invest (good to see Mark's moniker on this blog again). Save the Dolphins excoriates the outgoing DPP admin on the environment and expresses hope for the incoming.

    Taichung at dusk.

    Jeff Miller explains Giant's islandwide bike rental program. My Several Worlds goes to Yangmingshan. Barking Deer has an incomplete but extremely promising list of their summer hikes. Hopefully I can hook up with them for at least one. Stephanie at Tea Masters goes to the east coast for tea.

    Scooters rest in front of a Pizza Hut in Tainan.

    On the lighter side, check out this video of a UFO in Taiwan. And Mormons reach their 100th congregation here. Taiwan's new representative to Fiji is, well, different. But lest we imagine that the US is better, in the land that leads in Nobel prize winners, one in eight high school science teachers teaches the nutcase claim of creationism.

    A vendor waits by the roadside in Fengyuan.

    In addition to ignoring Japan, Ma Ying-jeou didn't point to any of Taiwan's neighbors. Yet the China-centric Ma could take a lesson from this Bangkok paper:

    In the past several years, Thailand has not paid enough attention to Taiwan, unlike other Asean countries such as Singapore and Vietnam, which continue to engage the island. Doubtless, Taiwan's investment in Thailand has dwindled greatly compared to the past decade. Instead, Taiwanese businessmen now prefer Vietnam and its favourable political environment. Today, Taiwan hosts the largest number of Thai overseas workers - 120,000 last year. Any change in the foreign labour quota would affect Thailand, particularly the Northeast. Already, Vietnamese labourers are increasing in number. The Thai government should not be complacent concerning the new dynamic in Taiwan. More attention and effort should be given to Taiwan.

    Speaking of other countries, Taiwan's relationship with the Solomons encompasses experimental farms.

    Tainan in the early morn.

    MEDIA: American Spectator has a piece on the fresh air in the Strait. Tom Plate loves Ma's speech too. LOL. Our Defense minister subscribes to the nutcase belief that Chen's assassination was staged. If you own a bicycle, backlights are mandatory, and 70% of the locals don't know. The number of unmarrieds is increasing in Taiwan. Go East, young men! Taiwan's new econ minister says top priority is relaxing restrictions on investment in China. CSIS offers a cautiously positive assessment of the incoming administration. Jamestown Foundation has new stuff on China's oil (smoke and mirrors). Our Fair Island may be a pariah, but there is support for Taiwan's journalists into the UN. Although, given the quality of the media here, perhaps the UN is wiser than we think...

    Watermelon season strikes my local supermarket.

    INAUG-O-RANTS: And after years of refusing to pass a stimulus bill even though the KMT claimed the island's economy was bad, suddenly we're going to get a big one.

    Remember the nutcase claim that Mad Chen© could do anything before Ma's inauguration? Spark a war, refuse to step down? Where's that claim now? Having done its job, it's down the memory hole. The gullibility of the people who repeated it is frightening.

    Tainan schoolchildren start their long day.

    SPECIAL: San Francisco thinks our subway kicks ass. Commonwealth Magazine has an exclusive interview with new DPP Chair Tsai Ing-wen.

    And don't miss this long musing on the death of a landmark Taiwan poetry journal.

    Fraud is now so common here that Post Office ATMs now carry warnings.