Taichung Mayor: Supersize Me

Taichung Mayor Jason Hu, fresh from pushing for Taichung to swallow its neighboring communities and become a municipality, has called for a Taiwan and south China to form a mega-region, says SCMP (no URL, sorry):

Hong Kong, Guangdong, Fujian and Taiwan should form a "mega-region" to boost competitiveness, the mayor of the Taiwanese city of Taichung proposed yesterday.

Jason Hu Chih-chiang raised the idea at a meeting with Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung, who gave a positive response.

Mr Hu, who arrived in the city on Monday to attend today's Hong Kong Taiwan Inter-City Forum, said he envisioned the economic hub resembling the Boston-New York-Washington megalopolis.

After a one-hour closed-door meeting with Mr Lam, Mr Hu said: "It is a breakthrough because we have not only thought about co-operation between Hong Kong and Taiwan. We're thinking about, in a much greater scale, including Canton [Guangdong] and Fujian. I think nobody had ever thought of that."

While Hong Kong had close economic ties with neighbouring Guangdong, Mr Hu noted that collaboration between Taiwan and its closest mainland province, Fujian, were similarly growing. "When we two [Hong Kong and Taiwan] co-operate more, the four can become a mega-region."

He suggested mutual preferential treatment, including landing visas for tourists and business travellers in the region. The integrated economic force would give the region "incomparable competitiveness in the world", the mayor said.

He played down suggestions that Hong Kong would lose its role after Beijing's implementation of the three direct links - air, sea transport and postal services - adding that Taiwan businesses would still need Hong Kong's financial services to help expand their markets.

Unfortunately, as was reported today, Beijing has flatly rejected a proposal to increase cross-strait flights to 300 a week, saying that Hong Kong has taken a big hit from the loss of fliers on what was once the busiest air route in the world. Hong Kong officials are also being urged to put more effort into developing relations with Taiwan, now that the CCP and the KMT are mending fences (also from SCMP):

At a meeting with visiting KMT vice-chairman Eric Chu Li-luan, who is also head of Taoyuan county, on April 1, Chief Executive Donald Tsang Yam-kuen said he hoped to visit Taiwan before his term ended in 2012. Mr Tsang spoke as Secretary for Home Affairs Tsang Tak-sing was concluding a landmark visit to Taiwan - in his capacity as leader of a joint Hong Kong and Macau delegation of Buddhist associations.

Reflecting on the dramatic changes, Ms Lu said it was merely a return to normalcy. "It's indeed abnormal for the Hong Kong government to [have been] so unconcerned about what has happened in Taiwan, as if it doesn't exist," she said.

"Taiwanese society has expressed enormous interest in gaining more of an understanding about Hong Kong. In comparison, Hong Kong has not made a lot of effort to promote itself in Taiwan."

...and further.....

Taiwan issues fall under the Constitutional and Mainland Affairs Bureau, headed by Stephen Lam Sui-lung. The bureau has been criticised for not focusing enough on Hong Kong-Taiwan relations.

Timothy Wong Ka-ying, an associate director of Chinese University's Hong Kong Institute of Asia-Pacific Studies, said the meagre budget (just a few million dollars) set aside for Hong Kong-Taiwan exchanges this year was "unbelievable". "Still, I don't think Legco will oppose an increase in funding for Taiwan issues. It's first of all a question of far-sighted vision. Then it is political will," he said.

Dr Wong said Hong Kong lost a big opportunity by not forging ties with Taiwan during the long period of uneasy relations. "Taiwan has increasingly shifted its focus onto the mainland. Now that they have direct channels of dialogue, their interest in Hong Kong has waned. It appears that Taiwanese society now sees clearly that their future lies with the mainland. That line of thinking has transcended party politics.

"If this is the case, the pace of change across the strait will be astoundingly fast. Faced with the fundamental change ... Hong Kong does not have a sense of crisis.

"We ought to act quickly on issues like the relaxation of visa restrictions on Taiwanese people visiting Hong Kong, the setting up of various representative offices and hosting events like the Hong Kong Festival in Taiwan," Dr Wong said.

Johnny Lau Yui-siu, a veteran China expert, also said Hong Kong had lagged far behind during the fast-paced changes across the strait. "I'm very disappointed. We wasted over 10 years [after the handover] in playing a role in mainland-Taiwan relations," he said.

The perceptive friend who sent me this said that another small place fearing marginalization by China is -- Hong Kong. The most recent wave of angst there was sparked by plans to transform Shanghai into a massive shipping center by 2020. Calls to move closer to Taiwan are part of that larger issue. Just as in Taiwan, calls for greater integration with China in Hong Kong are driven both by fears of economic marginalization and the Cargo Cult economic claims -- if we just integrate with China, we'll all be rich! No, $200 billion of Taiwan investment isn't enough! Must. Have. More!

My friend also flipped me a piece by SCMP's Tom Holland, which noted of Shanghai:

Shanghai is far from being a hotbed of enterprise. Ever since Jiang Zemin and Zhu Rongji took over the city's government in the late 1980s, Shanghai's economic policy has been aimed overwhelmingly at promoting state sector and foreign investment.

For years, the government funded massive investment programmes by requisitioning and auctioning land, paying minimal compensation, and ploughing the proceeds into state-owned industries. Meanwhile, every effort was made to attract investments from foreign manufacturers of high technology by offering generous tax breaks and other incentives.

In some ways, the policy was a roaring success. Between 2000 and 2004, the city's heavy industry grew at a 25 per cent annual rate, and today Shanghai is China's leading producer of cars, power generating equipment, personal computers and many important chemicals.

But the city paid a heavy price. Discriminated against by tax and other regulations, denied access to land and tied up in red tape, local private entrepreneurs got squeezed out. According to Massachusetts Institute of Technology professor Huang Yasheng, the local private sector's share of Shanghai's fixed asset investments fell from a high of 10 per cent in the mid-1980s to a negligible amount this decade (see the first chart).

As a result, private income growth was suppressed. Although today Shanghai's per capita gross domestic product is around five times the national average, disposable household income is only about 1.8 times the mean (see the second chart).

The concentration of so much wealth in the hands of the state and foreign-invested businesses has acted as a further disincentive to private enterprise. Today, according to Mr Huang, Shanghai not only has relatively fewer private companies than almost any other province in China, but they are smaller too.

The only thing we have to fear is fear itself....

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