Saturday, November 14, 2009

Cross-Strait Relations: Political Theatre and Political Reality

Lin Cho-shui had a long commentary yesterday in the Taipei Times that showed how political theater and political reality are mixed in pundits' assessments of the ongoing ECFA/MOU sellout talks. Lin is a former DPP politician who left the party over Chen Shui-bian and now works as a political commentator. He writes:
The Chiang-Chen meeting was delayed by political factors, while the ECFA negotiations were delayed for economic reasons. The two sides have constantly argued over whether cross-strait talks should put economics before politics or focus on both, but now it seems there are both economic and political problems.

Politically, the problem is quite serious. It is not the Dalai Lama’s visit or the screening of the documentary about Rebiya Kadeer. Rather, the problem is Ma’s three conditions for political negotiations that he proposed indirectly through Foundation on Asia-Pacific Peace Studies chairman Chao Chun-shan (趙春山).

The first condition is finalizing a cross-strait financial memorandum of understanding (MOU) and signing an ECFA. This places business before politics, something that China does not like.

The second is a domestic Taiwanese consensus; since mainstream opinion supports Taiwanese independence, China is not pleased.

The third is international approval, which not only overturns Ma’s own promise that cross-strait relations override diplomatic concerns, it also invites foreign forces to interfere in what Beijing sees as China’s domestic affairs. This is even less acceptable to China.
I think Lin, while often insightful, is confusing the political theater with the actual politics in this case.

The three conditions proposed by Ma are the usual nonsense for public consumption. The MOU and ECFA will be signed because both the KMT and the CCP want them to be signed; they are necessary steps in the long-term process of absorption and annexation. Chinese officials have made this clear, as earlier this year a flunkie at a conference here said the Chinese viewed this as a necessary step in annexation. How can something the Chinese want be an obstacle to agreement? Anything said on this score is mere political theatre designed to impress or intimidate....

The second condition, consensus, is no more real than the first, though the Administration is now pushing it -- the other day Premier Wu said that they would want 60% support for ECFA. How could that be a problem? I blogged a while ago on ECFA and MAC polls....
Here are the first two questions that address the first paragraph:
  • 1. A cross-Strait MOU on financial services is a base document of cooperation to be signed by the financial regulatory authorities of both sides of the Strait for the exchange of information, confidentiality of information, regulatory mode, and mechanism of coordination. Do you think Taiwan should sign a cross-Strait MOU on financial service? (46.3% yes)
  • 2. To date, we have signed MOUs on financial services with 32 countries or areas. Do you think we should negotiate and sign an MOU with the Mainland? (52% yes)
Note how totally loaded question number 2 is; it appears that it is there only to produce a higher number in case (1) turned out to be a failure (as it actually did). MAC could also have given the percentage answer to number 1 as the actual level of support.
Questions 1 and 2 from a previous poll. Although the central meaning is practically identical, the wording is different, and so the response is different. Essentially, a skilled pollster can get 60% of respondents to agree to almost any proposition, so it will not be difficult for the government to make the MAC polls say what it wants.

But they don't even need that. All the Administration has to do is submit any ECFA agreement to the rubber-stamp legislature and then claim that legislative approval = public consensus = 60% support. There are lots of routes for avoiding this "problem" of obtaining a "consensus."

The third issue, international approval, is no better. It would be easy to find approving statements from policymakers in Europe and the US on cross-strait "reconciliation", or to point to statements like that of the European Chamber of Commerce in Taiwan telling Taiwan to hurry up and sign an ECFA, because everyone knows that after we sign the ECFA, everyone in Taiwan will instantly become rich, not to mention good looking and able to drive properly.

In short, the three problem-causing conditions are the usual Ma Ying-jeou scattering earnest political theater remarks over commentators like pixie dust to confuse and bedazzle.

The rest of the article is excellent, and in fact Lin identifies some of the real issues:
The real problem involves setting up financial institutions. Beijing insists on different entry thresholds for Taiwanese firms in China and Chinese firms in Taiwan, and it also wants to be allowed to invest in 8.5-generation flat screen plants in Taiwan using Taiwanese technology and personnel, but it refuses to promise not to block Taiwan from negotiating free-trade agreements with other countries.

These problems mean that Taipei has finally encountered Beijing’s most ambitious attack against Taiwan’s core strategic sectors, and this conundrum will not be easily resolved.
Read that bolded part again: China WILL NOT promise not to block Taiwan's FTAs with other nations. Read what it really says: even if Taiwan kowtows, China will block FTAs with other nations. Why else would they be preserving that option? All those foreign commentators who claim that China will let Taiwan have FTAs if only we sell out, take note.

What's driving the business is really Taiwan's financial services industry, which hopes to make a killing in the China market, and the local market be damned. Taiwan News reported today:
Local financial services executives are more keen about gaining access to China than they are concerned about competition once Taiwan's financial market is opened to Chinese banks, Lee Jih-chu, vice chairperson of the Financial Supervisory Commission (FSC), said Friday.
Imagine that! No wonder the hot money is pouring into Taiwan in anticipation of the "opening" to China (opening the way the valve at the bottom of a toilet opens when you press the handle). Since I feel a burst of full-on Marxist Wallersteinian analysis coming on, I will refrain from further commentary on the ethics and goals of the global financial community.

FSC Chair Sean Chen also sent a message to the ECCT in his comments in the article above:
As to Chinese banks gaining access to Taiwan, Chen said that initially Chinese banks would only be allowed to set up a single branch in Taiwan and would likely target big clients, putting them mostly in competition with foreign banks operating here.
In 2o07, in another declaration from its alternate reality, the ECCT head said that Taiwan has failed to copy the Korean model and so has not done as well -- but simply showed that it understood neither the South Korean model nor the DPP government's policies. The excellent Commonwealth article in my daily links today recently observed of South Korea's response to China:
TIER research fellow Yang Chia-yen says the most obvious impact of South Korea's free trade agreements with the U.S. and Europe is that they have accelerated progress in the country's domestic legal environment and in conforming to international norms. Compared to the "Chaiwan"strategy adopted by Taiwan's government and enterprises, South Korea's diversified development strategy is worth considering.

Pondering the competition between South Korea and Taiwan, Yang warns: "If things go on like this, who will gain the edge and who will lose it, who will decline and who will grow – I'm afraid the answer will be brutal."

For once I agree with the ECCT -- Taiwan hasn't done as well as South Korea, because it hasn't followed the same diversified strategy. Read the whole article; even the Singapore diplomats are complaining about the Ma Administration's China obsession.
Daily Links
  • Taoyuan Nights peers with jaundiced eye at claims for Asian housing markets
  • A friend flipped me this extensive and informative piece on ECFA from Commonwealth magazine, which is far from a pro-Green publication, commenting....
  • Commonwealth outdoes itself with this excellent report on the problems of ECFA. First it explains why unemployment will likely rise as SME flee to China. Then it explains how HK has suffered under its agreement with China only to further show how South Koreas has stalled on an agreement with China over fears of unemployment and instead focused on trade agreements with as many players as it can. Throw in a few shots at how the Ma admin is overly focused on China and you have a pretty good summary of your blogging for the past year. LOL.
  • Businessweek: Taiwan's tech dreams -- if we can survive the KMT's disastrous economic policies, Taiwan might well fly in the future tech industries.
  • Greentours in the UK praises the island's green tour potential
Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums!


Snowman said...

Dear Michael,

It's been a long time! This is Snowman of CYUT(hope you still remember me.) I retured form India and now as a interpreter of Tibetan-Chinese - of course it's all about Buddhism. But this is not why I'm here. The reason is that I'm holding a woodwind music concert on 29 Nov 2009 PM:1530 and I would like invite you to come. Although we are not very well performer but we do enjoy in it. Hope you can come.
Here is the link:
just leave a message about you're coming or not and how many tickets you need.
Cheers, SM

Anonymous said...

The higher the unemployment in Taiwan is as the result of deals with China, the more the KMT is going to push the line that Taiwanese needs greater integration with China to save the economy... a self-fulfilling prophecy.

Michael Turton said...

Snowman! Are you on Facebook?

I can't go, I will be in I-lan. Sorry! But I want to have dinner with you and talk about India and Tibet.


Readin said...

From the Taipei Times article: Second, Ma believes China will reward Taiwan economically for making political concessions. However, after Taipei agreed to define cross-strait routes as domestic in sea transportation negotiations, Beijing squeezes out 97 percent of Taiwanese and foreign container ships from cross-strait routes. This has severely damaged Taiwanese harbors and shipping firms and turned Taiwan’s airports into Chinese satellites. It now insists on squeezing Taiwan through unequal bank entry thresholds.

Interesting word choice there with "unequal". I wonder if a Chinese translation would use the same word that is used for describing the "unequal treaties" China made with European powers in the 19th century.

If might be the right word for getting Taiwanese and KMT attention for what the ECFA treaty is shaping up to be.

Arty said...

if we can survive the KMT's disastrous economic policies, Taiwan might well fly in the future tech industries.

So what's DPP's economic policy? Ignoring the largest economy next door? The economic transition should be made during last eight years, but nothing has been done. There is little future for Taiwan so call high-tech industry today (old-tech sounds more like it these day).

I can also tell you what's best hope for Taiwan's future. Health care outsourcing from US, since elective surgeries can be done in Taiwan for cheap compared to the US. Food industry that could still take over China's market. Bio-tech if it is not too late (sell health food if you need to), and maybe some in financial service sector. Custom bicycles and electronics may also be possible but Taiwan companies need to seriously look at their marketing techiques.

Anonymous said...

"The higher the unemployment in Taiwan is as the result of deals with China, the more the KMT is going to push the line that Taiwanese needs greater integration with China to save the economy... a self-fulfilling prophecy."

What you're saying doesn't make sense. Increased trade will mean increased unemployment. That's the nature of a relatively rich country signing with a relatively poor one, especially one that is so much larger.