Thursday, February 11, 2010

China guts Taiwan's industries

One of the goals of closer ties between Taiwan and China, at least from Beijing's perspective, is to increase China's ability to destroy Taiwanese industries that compete with Chinese industries. A dramatic example of this came to light the other day in the form of a report that China has pressured Indonesia to stop building fishing boats in Taiwan....
China pressured Indonesian fishing operators into turning their business away from Taiwanese shipbuilders, the Chinese-language Liberty Times reported yesterday.

In January, the Indonesian government ordered its fishermen to stop ordering the construction of fishing trawlers in Taiwan, resulting in missed income of more than NT$100 million a year, said opposition Democratic Progressive Party lawmaker Kuan Bi-ling.

The Ministry of Economic Affairs and the Fisheries Agency were unaware of the changes, said Kuan, though the latter admitted it was true after inquiries with fishing operators and Indonesian representatives. The Ministry of Foreign Affairs should talk to the Indonesian government about ending the situation, the lawmaker said.

China’s shipbuilding sector had recorded strong growth over the past few years and was now trying to take away market share from its Taiwanese competitors, according to Kuan.
This is the nation that President Ma wants to engage in "free trade" with. Right.
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jerome in vals said...

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• 特洛埃木馬;木馬屠城計
• 顛覆分子
• 電腦程式內的病毒
• 日本領土台灣內的中華病毒
• 木馬, 無能馬

Louis said...

What's new? China continues to pursue its goals through whatever means possible while the world leaders continue to either (1) help them do it, or (2) find some clever way to avoid addressing the issue.

“When Clinton was president, Iraq massed a large number of troops just miles away from the Kuwait boarder. 36,000 American troops, backed by an aircraft carrier, were deployed to Kuwait. The response was clear enough that the Iraqi parliament recognized Kuwait's sovereignty and territorial integrity.”

The same tactic should have been used with China 20 years ago. Instead we played their "one-China-two-policy game". This lead to China discovering that they could manipulate their way towards the realization of their selfish goals.

I leave you with this:

Why did the US accept China's opening up in the 1980s so naively?

Marc said...

I would think the even the most panda-hugging Taiwanese entrepreneurs would remain vigilant of and competitive with China. My impression is that free trade means that all's fair in profit and marketshare. Taiwan must certainly be trying to aggressively take market share from China. Fairness is not a factor in this game.

Anonymous said...

So what do you suggest? Everyone put their heads in the sand and pretend China isn't there? Hope they go away?

China, just like many other powerful countries, does this as a standard economic practice. Ignoring them won't make them go away, it'll just mean that other countries benefit while Taiwan lags behind.

Taiwan is probably the one country that is most likely to benefit from an FTA with China, due in part to the shared history, culture and so forth. TW will surely be better off than US, EU countries, ASEAN etc. in economic deals made with China.

Gilman Grundy said...

An example of how China's diplomatic offensive harms Taiwan - yes. An example of how closer economic relations between Taiwan and the Mainland, which have steadily been growing closer since the early nineties no matter who has been in power, serve to harm Taiwan? No, not even slightly. In fact it would allow a government that was so minded to engage in retaliations - the withholding of investment and tech-transfers, imposing of tariffs on imports etc. Add to this the possibility that closer ties will allow the repatriation of at least some of the capital which flowed from Taiwan to the Mainland through back-channels, and closer ties - with suitable checks and guarantees - have definite benefits.

Anonymous said...

A couple things erk me about this whole thing.
1. That the people in the Taiwanese government are dumb enough to allow Pres. Ma to continue subverting Taiwan's future so that there is not choice be to surrender to PRC and accept the life sucking oppressive regime that is going to be put into place afterwards. Beijing keeps saying if Taiwan returns to China then we can work a deal for them to become an SAR like Hong Kong, Macau, but some how that just doesn't sound like it is in the best interests of Taiwan either because at this stage Beijing can dictate anything that they want Taiwan to do and they have to do it. Since it was a decision of the people of Taiwan and not forcefully done by military power there is nothing that any of Taiwan's allies can do to help them. Democratic process and all.

2. Thing that erks me about this is that other countries who have been doing loyal business with the Taiwanese and know that they get quality goods every time suddenly jump ship just because Beijing told them to. Everything that modern China is doing is just as imperialistic of not more so than anything that the US has ever done. The CCP used the fact that they now controlled the mainland and all its resources to sway the votes in UN in their favor, they use their military power to keep the Taiwanese from openly declaring their independence (even though under Chen they practically did), they use their political ties to other countries to force them to stop dealing with Taiwan or to not recognize them as an option, and they use their economic power to force those who have a choice into dealing out Taiwan. I understand from a business point of view that if a ship builder in China can do it better and at a lower cost than in Taiwan then you should use that ship builder. However, to give up your long and fruitful relationship with the Taiwanese company not for a superior product but because you were told to do so or else China will do something else is pure crap.

Why don't the Taiwanese people wake up and realize that Ma is slowly and forcefully selling out their country to the wolf next door. Most of the Taiwanese that I know don't want to take part in political issues because they say there is no good candidate for them to choose. That may be so but they need to do something that is in the better interest of the country, and not just let the KMT continue to sell out. The politicians should stop fighting for position alone and should actually start to do something positive for the country. They should start looking at the future of Taiwan and the future of the ROC and see what they can do to make sure that it can last beyond its 100th birthday, and to make sure that it last beyond its 200th birthday.

Anyway this is just the rant of expat that doesn't want to see the place that he calls home disappear into a single page in history books that can only be found in the US. Since I get the dreadful feeling that if the PRC takes over Taiwan I will no longer have a home, and that the History of Taiwan will be erased and denied.

mike said...

There will be nothing "free" about trade conducted under a regulatory agreement between Beijing and Taipei - the very idea is an oxymoron.

jerome said...

On air: Who’s the boss?

jerome in vals
February 11, 2010 at 20:37

Chiang Kai-shek had died in 1975 and ground-breaking for that eye-sore on Taipei cityscape called the “National Chiang Kai-shek Memorial Hall” started in October 1976, a month after the start of my two years stay in Taiwan. I walked often around the huge expanse of prime rate real estate the Chinese exiles (13% of the island population) who control Taiwan had chosen to enshrine their memory of Asia’s second bloodiest leader of the XXth century after his nemesis, Mao Ze-dong.

The long-suffering Taiwanese have at best uneasy feelings about that monument the Chinese on Taiwan gratified themselves with at tax-payer’s expense.

Dictatorships are investors’ magnets. It was the appeal of the exiled ROC on Taiwan then as it is that of China now. Taiwan was reaping the benefits of US and Japanese investments on the island. Those investments, coupled with the entrepreneurial acumen of small-scale Taiwanese family-owned businesses are the foundation of the Taiwanese electronics breakthrough.

US think-tanks are now selling the US public on China as they did Taiwan for the post-war period ending in 1979. That year president Carter established the diplomatic ties with China Nixon and his advisor Kissinger had worked out with Chou En-lai in 1971. American fascination with China goes back to the unraveling of the Qing Empire. Corporate America was rearing to go west, investing in the Middle Kingdom.

In the 1970s, the politically cowered Taiwanese were timidly reclaiming their islanders’ culture smothered for already 33 years by Chinese efforts to erase it.

Although they reaped the wealth and the laurels accrued from the Taiwanese miracle, the Chinese come to Taiwan with militarily-educated Chiang and his son Jing-guo’s ROC did not achieve it. The Japanese era-educated Taiwanese entrepreneurs did. The university exams were rigged to favor the offspring of that Chinese minority. Defense, education and government, all civil servants jobs went to the Chinese exiles. A law was passed in the 1980’s to automatically increase by 18% the officialdom retirement package. In those years, the Taiwanese commoner had no access to welfare or social security.

Retired Chinese military brass on Taiwan took advantage of the shift in the world perception of their motherland, China, to travel there and mend ties with the relatives they had been estranged from for most of their adulthood. In backward China, these old men were seen as cash-cows. In exchange for humiliating acknowledgment of guilt, China aforded the old wayward ROC generals opportunities to grab young flesh. The same pattern applies to Taiwanese entrepreneurs with a yen to invest in China. China has them by their balls.

Our institutional investors and related China-kissers in academia are swooning over the Taiwan-China rapprochement ROC-on-Taiwan president Ma Ying-jeou is unduly praised for. Meanwhile Taiwan bleeds its cash and jobs in China.

Soon the hot Taiwanese sweet potato will be on Zhongnanhai’s plate. Bleeding-hearts Sinologists will find it exhilarating to pore on reports of trampled human rights emanating from the Taiwan Special Administrative Region (SAR) of unified China.

All’s quiet on the western Pacific front.

Anonymous said...

Question: Does Indonesia have state-run fishing operations? Otherwise how did they "order" their fishermen to do this?

I would like to see a little more proof - like the order coming down from Indonesian government. Not that I believe its impossible, but Indonesia is not exactly a Chinese-loving lackey state.

I would guess bribery were involved instead, where all of a sudden, Taiwanese lost their "license" while China got one, and it was more of a commercial issue than a political dispute.

jerome in vals said...

Anonymous6:29 AM said...
“Question: Does Indonesia have state-run fishing operations? Otherwise how did they "order" their fishermen to do this?”

Now, lessee what does the Taiwan News Staff Writer tells its perky reader in his report, page 3, 2010-02-11 edition of ET News? And from the get go:
China pressured Indonesian fishing operators into turning their business away from Taiwanese shipbuilders (...).”

Then, the meat course:
In January, the Indonesian government ordered its fishermen to stop ordering the construction of fishing trawlers in Taiwan (...).
The Ministry of Economic Affairs and the Fisheries Agency (...) admitted it was true after inquiries with fishing operators and Indonesian representatives.”

Then a backgrounder directed at the eventual new-comer:
China’s shipbuilding sector had recorded strong growth over the past few years and was now trying to take away market share from its Taiwanese competitors (...).
The shipbuilding industry was the first but not the last traditional sector of Taiwan’s economy which would feel rising pressure from China, (...) the situation would only grow worse as President Ma Ying-jeou was striving to conclude an Economic Cooperation Framework Agreement with China. (...)
China was also giving generous subsidies to ship owners, making life difficult for the Taiwanese sector (...).”

Lastly, a constructive proposal for a bold, spirited counter-move:
Shipbuilders called on the government to subsidize the building of vessels in new materials which were lighter, more fuel efficient, and easier to repair than steel ships, the paper said.”

As an aside, I assume the last paragraph quoted above to be the lead that prompted Michael’s Sat., Feb. 13 post Paper on Parade: Technological innovations and industry clustering in the bicycle industry in Taiwan.

But I digress. I did not bother checking whether Indonesia has state-run fishing operations because I trust Et News and Liberty Times adhere to standard code of journalism. And since Anonymous6:29 AM seems to differ on this, it should be left to Anonymous6:29 AM to do his homework and report his findings on this page.

Furthermore, I did not bother checking whether Indonesia has state-run fishing operations because I believe Indonesia most certainly has its Ministry or Department of Fisheries making decisions and sending its directives to fishing fleets owners on feed-backs from the latter.

As a modern islands nation with a seafaring history going back three millennia in an area encompassing locations as remote as Taiwan, Easter Island, New Zealand and Madagascar, Indonesia sea-related industries must afford a lot of investments opportunities.

Where I would thank said Anonymous6:29 AM; is in his bringing up to my mind the following:
• who could be involved in the Indonesian fishing industry?
• what share of the industry is in entrepreneurial Huaqiao’s hands?
• where does Huaqio’s (cunningly extracted) allegiance lay?
• which hegemonic state diligently applies itself to enabling that allegiance to foster its national interests?
• in how many Huaqiao fleet owner’s directorial office can one see framed in prominent view a snapshot of said fleet owner crossing chopsticks with PRC leaders going back as early as Deng Xiao-ping?
• what are the stated national interests of said state in regard to Taiwan?

Go through that informed battery of queries. Now, follow my rueful gaze toward Chuuka-ed-Taihoku and of late, Chuuka-ed-Taihoku-parroting Tokyo. Think “united front”, not another dark scheme feverish cabal-mongers hatched out, but the stated policy of PRC. And you will rightfully infer that, after many in the region, the lately more "politically correct" Indonesian government had plenty of hints coming its way.