Tuesday, March 30, 2010

Taiwan - Australia - Solomons

Do not arouse the wrath of the great and powerful Oz!

With President Ma having visited the islands of the South Pacific that recognize the ROC, not the PRC, Taiwan-Australia ties have been in the news lately. First there was a minor flap over the comments of Greg Sheridan, foreign editor of The Australian, who charged that the government of PM Kevin Rudd was appeasing Beijing by blocking Ministerial visits from Australia to Taiwan. This was denied by the Rudd government.

Taiwan and Australia are involved in a long-running spat? conflict? debate? over foreign aid to the South Sea Islands. The Ma government has actually displayed some forward thinking on foreign aid, putting out a White Paper on it, and pushing for Australia's cooperation. The Australian reports that Taiwan is "Purging Pacific Island graft", focusing on the Solomons, the focus of Taiwan-Australia friction:

When Ma arrived in the Solomons, he was told bluntly what had to change. The Solomon Star editorialised to him on "the abuse of your taxpayers' money by MPs using Taiwanese aid money as a slush fund. We are begging you to put a stop to this".

Ma says President Frank Kabui twice raised such concerns during a state banquet, as did PM Sikua. "Ever since I got here," he said, he had been confronted about the corrupt use of Taiwanese aid.

I've posted on this before (2008), when Australian criticisms of Taiwan's checkbook diplomacy suddenly disappeared when Ma promised to end aid to the South Sea Islands and Oz promptly reversed its position: send the money! Although Taiwanese money had been blamed for inciting riots in the Solomons, a Commission sent to investigate that issue concluded that Taiwan was not responsible.

As researcher Joel Atkinson noted in a 2009 article in Pacific Affairs entitled Big Trouble in Little Chinatown: Australia, Taiwan and the April 2006 Post-Election Riot in Solomon Islands, the situation was more complex than the news reports made out. To wit, and read closely:
"...Taiwan’s effort to maintain and expand the list of countries with which it has formal diplomatic relations, in the face of hostility from China, has clashed with Australia’s governance reform agenda for the Pacific Islands. This conflict is particularly acute in Solomon Islands, which has longstanding ties with Taiwan and a close association with Australia. However, while this divergence of interests is real, Australia has fuelled this conflict through imputing Taiwan for Australia’s difficulties in an apparent attempt to avoid acknowledging the ambitious nature of Australia’s agenda relative to the political, economic and social conditions in Solomon Islands. This inclination to make Taiwan a scapegoat brought about sustained public Australian criticism of Taiwan following the April 2006 post-election riot in the Solomon Islands, based on little more than the unsubstantiated claims of a single Solomon Islands politician. This episode inflicted serious harm on Taiwan’s reputation in Australia. The incident also contributed to the Chen Shui-bian Taiwan government’s perception of Australia as being increasingly pro-China."
Australia's claim was that funds from Beijing and Taipei were interfering with Australia's attempts to improve aid governance. Atkinson points out, however, that "it is debatable to what extent China and Taiwan weaken Australia’s reform agenda simply through providing South Pacific governments with funds to misuse. Presumably, if Australia’s efforts were effective, the administration of aid from China and Taiwan would improve accordingly."

What actually happened, according to Atkinson, is that local politicians in the Solomons simply exaggerated Taiwan's money flows in order to attack other politicians and portray themselves as being able to deliver the goods. Even worse, a double dipping politician accused Taiwan of interference when it defunded him:
Taiwan’s image problems were compounded when another candidate accused Taiwan of interference. Alfred Sasako complained that a rival candidate had told his electorate that they would receive no Taiwan funding as long as Sasako remained MP. He also alleged that Taiwan had provided the rival candidate with funding for two projects. Antonio Chen told the media that Taiwan had stopped funding projects for which Sasako applied because he had failed to account for a SI$315,000 (US$44,000) police post project which, unbeknown to Taiwan, had also been funded by Australia. There was little in this episode to suggest that Taiwan was “funding candidates,” and Taiwan’s withholding of funds from a cheat was actually to its credit. However, that there were now all of two candidates who had made accusations created a robust characterization of Taiwan that would shape post-election perceptions, especially in the Australian media.
The local political situation is complex and compounded by some very smarmy connections between individuals in the Australian government and local politicians in the Solomons. But riots "broke out" though on the balance it appears to have been planned, and the Chinese were blamed. The Australian government immediately began blaming Taiwan. While it is likely that Taiwanese private businessmen put money into the elections, there is no evidence to suggest the Chen Administration itself was involved. As Atkinson points out, there was no targeting of Taiwanese businesses even though there were plenty of potential targets. If Taiwan's money made everyone upset, why didn't Taiwanese businesses get torched?

A single paragraph will suffice to give the flavor of the complexity of events (and money flows!):
These events touched Taiwan when the Sydney Morning Herald accused Taiwan of funding Julian Moti’s escape from PNG (despite it being on a PNG military plane), and providing money to defeat a no-confidence vote against Sogavare. The newspaper argued, “While a lot of Australians see Taiwan as a brightening torch of democracy in Greater China, in our own neighbourhood it risks appearing more like a rogue nation.” These unsubstantiated claims and singling-out of Taiwan came despite an Australian government body, Airservices Australia, making payments totalling A$2.1 million (US$1.8 million) to “third parties” at the direction of Solomons officials “outside the terms” of contracts, and China directly funding at least one Solomon Islands political party. It seems unlikely that Australian media organizations would have made such attacks on Taiwan if not for the lead and encouragement provided by Canberra.
Australian was deeply involved in the Solomons through the Regional Assistance Mission to the Solomon Islands (RAMSI), which it had organized with other area nations to provide a fig leaf for its own intervention in the Solomons in 2003. Although RAMSI was effective in restarting some services, it became resented, like any foreign intervener, and failed (inevitably) to solve the ethnic problems that underpinned the political conflicts in the Solomons. Thus Taiwan's large involvement in the Solomons, as well as its lax aid supervision, became a sensitive issue for Australia -- and also made Taiwan aid a useful diversion to deflect criticism of Australia's own failures in intervening in the Solomons.

So to return to the criticisms in the newspaper report above....
Ma says President Frank Kabui twice raised such concerns during a state banquet, as did PM Sikua. "Ever since I got here," he said, he had been confronted about the corrupt use of Taiwanese aid.
How does Atkinson describe PM Sikua? Lessee.....
Australia’s problems with Sogavare continued until December 2007, when Derek Sikua, a leader supportive of Australia’s agenda and RAMSI, finally replaced him.
That context is probably necessary to understanding why Ma got criticized. Why did Ma accept that criticism? Because it reflects on the previous government, not him. In this case, criticism of Taiwan served the agendas of everyone involved...

Aussie radio on Ma's trip

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Wild At Heart: Working to Save Taiwan's Rare Dolphins

Wild at Heart says:


Wild and our sister organisations at the Matsu's Fish Conservation Union are working hard to protect Taiwan's critically endangered pink dolphins, otherwise known as the "Indo-Pacific humpback dolphins", or "Matsu's Fish". The less than one hundred dolphins that remain in the population are resident along Taiwan's heavily industrialized west coast and are subjected to a wide range of human impacts including toxic pollution, underwater noise, entanglement and drowning in fishing nets, deterioration of estuarine ecosystems and loss of habitat through land reclamation.

For a quick overview see the new short film: "Taiwan's Critically Endangered Pink Dolphins in 2010".

We have achieved a great deal in the last three years in terms of increasing awareness and pushing the government to consider the dolphins when making plans for the west coast. But enormous challenges still lie ahead, with even more destructive fishing practices and large-scale land reclamation and factory construction planned for the area.

We need help from the public, both in terms of spreading the word, and letting the government know you are watching. We are about to launch a new petition and we hope you will sign it or send a personalized version to government ministers.

We are also appealing for much-needed donations to support our lobbying, educational and research activities. Our new 2010 fundraising proposals can be accessed at the links below. They both provide details of our activities, so even if you aren't looking to donate you may find them worth reading!

Click here to read Matsu's Fish Conservation Union's 2010 Conservation Action Fundraising Proposal.

Click here to read our fundraising proposal to support the vital Pink Dolphin Monitoring Project.

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!

Laffs from the KMT and DPP

The KMT unveils the slogan for the 100th anniversary of the ROC (why do they need a slogan?).
The main logo featured the three interlocked numbers “100” in bold gold type, symbolizing the force of solidarity and the glory of stability, said foundation vice chairman Tsai Shih-ping. The main slogan is “Republic of China, Splendid for One Hundred” in Chinese.

Advertising expert Fan Ko-chin, who sits on the preparatory committee, said the original proposal contained the words “nation building,” but they were dropped because they were deemed too sensitive.
Splendid...splendid....let's see, where did they get that from? Wait, I know:
Arable: That's some pig.
Avery Arable: He's terrific.
Lurvy: He's radiant.
Meanwhile the DPP shows that it is lightyears ahead of the KMT when it comes to hipness and media savvy with its ECFA Factbook that is a parody of Facebook. Must be seen and savored! Now that's terrific, splendid, and radiant.
Daily Links
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Sunday, March 28, 2010

Daily Links, March 29, 2010

It's Tomb Sweeping Holiday again, as all across the island people go to take care of their ancestor's tombs. At a cemetery not far from my house, cars line the road as families make a day of it. At the far end of the line of parked vehicles is a fire truck; out of control fires are a common hazard on this holiday. Meantime, let's see who is out of control on the blogs today:


Tanzi and Fengyuan from the road up to Hsinshe.

MEDIA: Cool: a cruise ship full of gay men shows up and the government gives them guides to gay night life. If only it would recognize ARCs through gay marriage... State run company to run new Aerotropolis. No, that is not a city in a '30s radio serial. Next round of Embracing China's Formosan Annexation (ECFA) talks to begin on Wed, March 31. 2,000 Chinese students to enter 73 eligible Taiwan universities. British national arrested in hit and run. Foreigners stop line jumpers at Lanyu airport: good work folks. Taiwan exports to grow 19.9% this year. Imagine it: China has not been quick to return fugitives from the law in Taiwan. The Ministry of Education wants to increase the amount of Chinese history in the curriculum. I think this is great; the Administration is obviously deeply out of touch with mainstream Taiwanese thinking on the issue. Anyone recall the KMT criticisms of the DPP for "politicizing education" whenever they increased local knowledge in the curriculum? KMT legislators object to seminars promoting ECFA. Former AIT official Nat Bellocchi asks does ECFA benefit Taiwan...or the US? Scary: Nature review finds that soils emitting more C02 as planet warms.

Just another day at 7-11

RIDE SCHEDULE: I've set up a permanent link on the sidebar to the left where I will be posting the rides I know about each month. Drew at Taiwan in Cycles also posts rides at the top of his blog. April is unfortunately a tough month for me, but things should ease in May. In June, the weekend of the 19th, I've decided to take another crack at Taroko Gorge and Hehuanshan. Hope to see you there.

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S Korean naval vessel sinking triggers Taiwan alert.

A South Korean naval vessel blew up and sank a couple of days ago. At present there is no reason to think that North Korea was involved, or that there is any threat to Taiwan. Nevertheless President Ma declared an alert (?) ("activated a national security mechanism"), as the Taipei Times reported:
Yu said military officials would stay on “high” alert, while the ­military would maintain ­regular ­operations and make adjustments when new information is received.

The ministry said that Chief of General Staff Lin Chen-yi (林鎮夷) and three deputy chiefs of general staff have been at the military’s Hengshan Headquarters — the nation’s emergency military command center — monitoring developments.
The Taipei Times then printed the government's reasoning in the context of DPP hacks on it for overreacting, in which Premier Wu appears to deny that there really was an alert:
Some Democratic Progressive Party (DPP) lawmakers yesterday said Ma’s activation of the national security mechanism was an over-reaction, with DPP Legislator William Lai (賴清德) chiding Ma for largely ignoring the more serious threat in the Taiwan Strait with China targeting more than 1,000 missiles at Taiwan.

At a separate setting yesterday, Premier Wu Den-yih (吳敦義) said the government’s response to the South Korean incident was “appropriate,” dismissing DPP allegations of over-reaction.

“It’s an appropriate reaction as the military did not increase the alert level. If we had not reacted then that would have been irresponsible,” Wu said.
It does seem like a bit of an overreaction. In June of 2002 the two Koreas fought a ull-blown naval battle. Taiwan, then under the Chen Administration, does not appear to have taken any unusual military preparedness steps (2002 Taipei Times story). Nor do events in Korea appear to threaten Taiwan in any way.
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Saturday, March 27, 2010

Liberty Times Ugly New Pattern?

Lotsa fun the last few days. First the Liberty Times published a translation of a report by CLSA, a financial firm, which it said declared that Ma would lose in 2012 (maddog flipped me this link to the original, thanks man!). That report was picked up by the Green papers, like this Taiwan News piece:
President Ma Ying-jeou will lose the 2012 presidential elections because he has completely lost public confidence, newspapers quoted analysts at financial group CLSA as saying yesterday.

The Hong Kong-based CLSA Asia-Pacific Markets brokerage and investment company is an independent subgroup of French bank Credit Agricole.

The Ma administration's handling of a wide range of issues, from last August's Typhoon Morakot disaster to the opening to imports of bone-in beef from the United States, has met with strong public dissatisfaction, senior analyst Bruce Warden said in a report titled "The KMT as its own worst enemy."

But then the CLSA issued a denial, saying it thought Ma would win (China Times via Taiwan Today). Read closely:

The issue came to a head after “The Liberty Times” ran a story March 24 in which “the 2012 Presidential election is the KMT’s to lose” was translated as “the KMT will lose the 2012 election.” The English-language CLSA report was cited by the newspaper as its source.

“The Ma administration’s [mainland] China policy has broad enough public support that it should be able to carry the 2012 election on its own merits,” the CLSA report read. “It would likely require some self-inflicted wound for the KMT to lose in 2012 and events of recent months highlight the ease with which this can happen.”

CLSA said the newspaper quoted its report without permission and in a manner differing substantially from the content. The company is exploring its legal options in response to the unauthorized distribution of its research reports and materials, which are compiled and distributed strictly for the benefit of its clients.

Now read these paragraphs from the Taipei Times carefully:
On Wednesday, the Liberty Times ran a front-page story titled “Ma would lose in 2012: CLSA” and cited the report as saying that while Ma’s China policy is the right direction, the Ma administration could lose the next presidential election because of “self-inflicted wounds.”

Another Chinese-language newspaper, the United Daily News, on Thursday published a similar story with a headline that read “CLSA’s bold prediction: Ma to lose in 2012 re-election.”
Hang on...doesn't it sound like the UDN's report is an independent one, separate from the Liberty Times' report? But maybe it is not, as the China Times piece above avers:
“The Liberty Times” article was quoted by several media outlets in Taiwan, including “United Daily News.”
UDN then corrected its own headline and slammed LT. The truth is like a character in Lost, constantly searching for a way back to our reality, and not finding it.

The CNA reported today that the Liberty Times wouldn't admit it had mistranslated. Some more material of the CLSA is there:
The CLSA report said: "We maintain the view we proposed last June, that the 2012 presidential election is the KMT's to lose. The Ma administration's China policy has broad enough public support that it should be able carry the 2012 election on its own merits." It went on to say: "However, we also believe that 'it would likely require some self-inflicted wound for the KMT to lose in 2012' and events of recent months highlight the ease with which this can happen." The headline of the Liberty Times' Wednesday front page read: "Ma will lose 2012 election: CLSA." By Wednesday night the story was reported and commented on by other local newspapers, Internet forums and television political talk shows, with opposition Democratic Party (DPP) citing the "prediction" while criticizing the Ma administration.

KMT legislator Wu Yu-sheng told a press conference Thursday that the newspaper had mistranslated the analysis.

CLSA also issued a statement in Chinese and English Thursday correcting the Liberty Times story and said the newspaper "obtained and used this report without permission." "The view we proposed in our June 2009 report 'KMT in the driver's seat' is that the 2012 presidential election is the KMT's to lose. This means the report does not predict President Ma Ying-jeou will lose the election," the statement said.

The Chinese-language United Daily News daily ran a front-page story Friday headlined "CLSA misquoted by Liberty Times" although it had also carried a story on the CLSA analysis Thursday that was titled "CLSA's bold prediction: Ma to lose 2012 re-election." The Liberty Times published a story Friday in which it invited a university professor to review its translation and the CLSA analysis word by word, but did not admit it had made a translation error in its original report Wednesday.
The thing that struck me, after I erroneously through the Liberty Times had done its job and reported what it said on my blog, was that this IS NOT the first time a misreading of foreigner meanings has occurred at that paper in the context of Ma's re-election. I can show another instance, which no one really noticed. I blogged on it a week ago. Shortly after I ripped Shelly Rigger's piece on Ma's unpopularity, the Liberty Times wrote this train wreck which I duly panned. LT said:
Shelley Rigger, associate professor of political science at Davidson College in North Carolina, recently said Ma’s prospects for re-election look bleak because of his abysmal approval rating and public dissatisfaction with the Chinese Nationalist Party (KMT).
But that is not all what she said in that piece; in fact she said at a meeting later that same week that Ma's chances of losing in 2012 are remote. Rigger was trying (and failing completely) to understand why Ma, for whom half of DC appears to be nursing a man-crush, is so unpopular in Taiwan. Ma's 2012 chances are nowhere estimated in the piece.

I hope this is merely a blip and doesn't turn out to be a pattern. We don't need the major local Green paper developing a pattern of misreporting on such crucial topics as what foreigners think.
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Thinking about a Future DPP government

CSIS with comments from a former AIT official on a DPP government -- a sign that everyone is getting the same idea all at once: Ma is vulnerable in 2012. To get a sample of CSIS anti-DPP line, see Ralph Cossa's awful piece I blogged on here; the CSIS report calling for closer relations between China and the US was written by a current China consultant and an insurance industry CEO with old links to China. So I'm sure you can guess the main them of Brown's piece for CSIS without even reading it....

PacNet #13 - March 23, 2010
Thinking about a Future DPP Government
By David G. Brown

David G. Brown [dgbrown@jhu.edu]is adjunct professor at Johns Hopkins School of Advanced International Studies.

Brown begins by reviewing the DPP's reviving electoral hopes, and closes with the entirely predictable....
....Pragmatists hope to avoid repeating the mistakes of the Chen Shui-bian era that saw escalating tensions with China and severely strained relations with the US. On the other hand, some DPP activists appeal for support by sticking their fingers in the dragon’s eye or by mobilizing protests against visiting mainland representatives. However, future party policy remains unclear.
...yes, Mad Chen© lives! No establishment piece would be complete without him, he's unpragmatic! It goes without saying that China's role in creating and sustaining tensions is not mentioned. Indeed, in no Establishment piece is China's role anything but passive. Scary.

The key point of the paper is here, and all flows from it:
Since the key to maintaining good US-Taiwan relations is for Taipei to be seen as pursuing stable cross-Strait relations, there are signs the US would be looking for in DPP policy.
You can see that the DPP is already being set up for Mad Chen, v2.0. Since Beijing, not Taiwan, controls the level of tension, Brown is essentially calling for Taipei to subordinate its foreign and domestic policies to the approval of Beijing, or risk the wrath of the US when Beijing starts its familiar whine about the hurt feelings of the 1.3 billion: "Those DPP leaders are provoking China again!" Imagine if CSIS mandated this for everyone:
OBSERVER: India has rejected Chinese claims to Arunachal Pradesh.
CSIS ANALYST: I wish New Delhi would quit provoking Beijing.
OBSERVER: Further, Vietnam has protested China's claim to 16,000 islands in the South China Sea, as have the Philippines and Indonesia.
CSIS ANALYST: (snarling) Worst case of provocation I have ever seen.
OBSERVER: Japan's foreign ministry filed a complaint with Beijing over Chinese submarines operating in the Senkakus, which Beijing first claimed in 1969.
CSIS ANALYST: (shouting) Provocation! Provocation! Provocation!
Of course no mention of the Chinese military build up, threats against Taiwan, etc. It goes without saying that these have no effect on cross-strait tensions, and so there is no need to say that. Or something. Whatever. Wish I could make the missiles disappear as easily....

Like all writing, as soon it moves away from abstractions and codewords like stability and pragmatic, it improves greatly. Brown then states that in Washington's view, it is important
....whether a future DPP government would maintain the newly institutionalized arrangements that have been negotiated between Straits Exchange Foundation (SEF) and Association for Relations Across the Taiwan Strait (ARATS) – that is the SEF-ARATS agreements and the pattern of regular day-to-day contacts between the two sides that take place under those agreements. A DPP administration would undoubtedly want to change some details, but it would be reassuring to Washington if the existing arrangements were maintained.
The DPP should retain these arrangements, especially since the KMT will continue with its multi-track, party-to-party, back room agreements with the CCP. Note what Brown calls for then:
Another relatively easy decision would be for the DPP presidential candidate to provide reassurance to Washington and Beijing on the parameters within which cross-Strait policy will be pursued...
It is interesting to imagine how China can be "reassured" when it and the DPP hold diametrically opposed views on the fate of Taiwan.... read closely:
The more difficult challenge for the DPP would be to keep the SEF-ARATS negotiating channels open. To do this, Taipei and Beijing would need to work out a political basis for talks. Inevitably, this will require the DPP to face up to the “one China” issue. The Chen administration, which included current DPP Chairperson Tsai Ing-wen, rejected the “1992 consensus,” which has allowed Beijing and the Ma administration to conduct talks without reaching agreement on the meaning of “one China.” It will not be easy for a future DPP candidate to accept the “1992 consensus,” but finding a way to do so would be very significant for Beijing and Washington. Alternatively, some in the DPP have considered possible approaches to the “one China” issue. Frank Hsieh has talked of a “constitutional one China,” based on the party’s acceptance that the Republic of China constitution assumes “one China.” Coming to grips with this issue would be facilitated if the DPP were to update the 1999 Resolution on Taiwan’s Future to reflect the changed circumstances in cross-Strait relations and reformulating the old resolution’s explicit rejection of “one China.” Party leaders are understandably reluctant to reopen the issues in the 1999 resolution, but doing this would appear necessary to establish a basis for continuing cross-Strait talks.
The 1992 consensus does not exist; it is merely a fiction that the KMT invented long afterward as a fig leaf for talks. It can't be accepted because it doesn't mean anything, or if accepted, it won't mean anything anyway. Note that Brown calls on the DPP to "reformulate" the 1999 Resolution's explicit resolution of "One China" -- but a careful reading of the resolution shows that it rejects China's version of One China which includes Taiwan. Brown, in code, is essentially calling upon the DPP to repudiate Taiwan's democracy and sovereignty -- and adopt the very stand that is currently killing Ma in the polls. Thanks, but no thanks.

That humorous disjunction between the Establishment view and reality is also present in the complete lack of recognition in this paragraph that the reason the DPP won't able to keep the communications channels open is Chinese intrasigence. Here the avoidance of reality becomes positively heroic: Brown merely says "it will be difficult" for the DPP to keep the communications channels open. A master of understatement.

Any mention of the KMT's parallel negotiating tracks with China? Naw.

Having established that China is not a problem, Brown can then forthrightly move on to the next paragraph in which he (1) praises China for being "remarkably pragmatic" with Taipei and says that (2) it is possible that China's "China’s risk-averse leaders will look for a way to respond if the DPP moves away from the outright rejection of “one China” and away from its advocacy of de jure independence." Anyone remember when the Establishment sang with one voice that China would take all those missiles down in response to Taipei's becoming more flexible and pragmatic? Yea, verily, China would respond if the DPP kow-towed -- with another five hundred missiles. Because everyone in Beijing would realize that if they pile on the threat, the DPP comes around -- so why would they ever make any change in the situation? Brown's claims have no basic in the actual logic of cross-strait relations.
Regardless of Beijing’s response, if Taipei is seen in Washington as pursuing moderate cross-Strait policies, that would help ensure good US-Taiwan relations. However, if DPP cross-Strait policies cause a rise in tensions, a widening gap between US and Taiwan interests and relations would be inevitable.
DPP cross-strait polices will ALWAYS cause a rise in tensions, because


Since Beijing can cause tensions any time it wants over any event it likes, the DPP will always cause tensions. The question is whether the US will take a more realistic view of things, not whether the DPP will "cause" tensions.

The rest of the paper looks to the future and worries that if the DPP continues to pursue de jure independence then Washington and Taipei will have divergent interests. Well, it can be hardly surprising that the class of analysts working for organizations with close links to firms doing business in China could come to any conclusion but that. But I expect that by 2020 when China is the Ultimate Super Power the Asian region will be looking at China in quite a different way.
Daily Links:
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In Which I Win the Prize for Most Irrelevent Numerical Precision Ever

Most Irrelevant Precision Ever
Readers of my blog know that I enjoy poking fun at Irrelevant Numerical Precision, like those economic predictions that claim that next year the economy will grow 4.37 percent (not 4.3 or even 4). Today I biked up to Miaoli and then up and over 130, which is rapidly becoming one of my favorite rides. Nathan Miller came down from Taipei, Drew came from across Taichung, and Patrick Myall, a former professional rider, hailing from San Francisco but staying in Taichung, went with. Nathan has a map of the ride here. I took this pic of Patrick standing next to a sign marking the end of Route 51-1, which is precisely 3.537 kilometers long, because obviously drivers on the back roads of Miaoli need to know the distance to the nearest meter.

Here's Nathan, resplendent in bright pink, posing next to Liyu Lake in Miaoli. It was a stunning day, with fantastic views. It would have been an excellent shot, but Nathan's shirt screwed up the camera's meter and made everything look hazy.

PATRICK: "How long do we have to wait before Turton catches up to us?" DREW: "Did you bring a book?"

The OCR 2, the Mosso, the Salsa, and the anonymous bike with the patio glaze for paint stop for lunch at the Mile High Cafe. They had chopsticks there, but Patrick insisted on using his titanium fork. It's my blog and you'll just have to put up with the bad puns.

130 not only offers 10% average grades with spots over 13%, but rewards you with great views when you reach the top.

Patrick enjoys a cold coffee at 700 meters.

No trip to the area is complete with a visit to the Japanese-era railroad viaduct.

Stop by next time you're in the Chung and bring your bike!

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!

Friday, March 26, 2010

Taiwanese Prefer Japan

Most Taiwanese prefer Japan to China, says poll paid for by Japanese representative office in Taiwan...
Asked which country Taiwan should be closer to, respondents maintained the pattern reported in 2008, roughly split between China at 33 percent and Japan at 31 percent, with 16 percent preferring the United States.

When asked if they had feelings of attachment to Japan, however, 62 percent agreed or strongly agreed.

The starkest statistic accompanied the question, "Other than Taiwan, which is your favorite country?"

Fifty-two percent answered Japan, up dramatically from 38 percent last year, while China floundered with 5 percent. The United States managed barely more at 8 percent.
No kidding. Japan has a much greater influence on Taiwan than people commonly realize, not only in the shape of everything from education to policing, fashions, and food, but also on the island's infrastructure and engineering. Japan is a good place to test market products aimed at Taiwan.

It's interesting to see that that low level of preference for China is even lower than the number of people who commonly state in polls that they want to annex themselves to our authoritarian pals across the Strait.

UPDATE: I've deleted the rest of this. Apparently the translator of the CLSA report, which appears to have been the LIberty Times, reversed its meaning. I originally thought that it was only the title that got screwed up. The fault is mine.

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!

Tuesday, March 23, 2010

Does the public like ECFA?

Funny new scam: on ATMs in Taiwan in less public areas, you can find a sign that says THE WITHDRAWAL FUNCTION ON THIS ATM IS BROKEN. PLEASE USE THE TRANSFER FUNCTION AND THEN INPUT THIS NUMBER followed by a string of numbers. Why didn't I think of that?

Speaking of scams, the Mainland Affairs Council (MAC) created an infomercial claiming that if Taiwan doesn't sign ECFA, then it will be marginalized like.... North Korea. No, I'm not making that up. We are headed for Pyongyangville if we don't move closer to China. Wish someone would inform the MAC that North Korea's biggest trading partner is.... China.

Meanwhile, in the trenches, Joe Whisbee remains highly skeptical of the wonders of ECFA. Global Views asked the public for its opinion last week and found that even when it loaded the question, it couldn't get more than 51% to agree to "if there are overall benefits for Taiwan then the government should sign it". Curious that even if it has benefits, half the public won't support it. The straight up support/not support question got 46.2% supporting, 35.9% not supporting. I suspect from other polls that the uncommitteds hide a lot of Greenies who are against it.

The pro-KMT China Times polled the public on ECFA. Results?
1. Do you know that our government is planning to conclude an ECFA (Economic Cooperation Framework Agreement), or Cross-Strait Economic Agreement, for short, with the Mainland?

Yes 73.6%
No 26.4%
Where did they find those 26.4% who have never heard of ECFA? Question three is similar to the Global Views survey:
3. Overall, do you support the signing of a cross-Strait economic agreement?

Yes 42.6%
No 33.8%
No opinion / Don’t know 23.6%
Can't find majority support for ECFA in Taiwan. 67% also supported a public debate on ECFA between the parties, and the next question, which asks who should represent the DPP in a putative debate, says:
Tsai Ing-wen 48.1%
Yu Si-kun 4.2%
Su Tseng-chang 25.5%
Former DPP Chairman Yu Si-kun is about as popular as root canals, while the public obviously appears to have a high opinion of Dr. Tsai, the current Chair.

ADDED: As a smart friend of mine pointed out, the pan-Blue polls never ask if there should be a referendum on ECFA. That position has widespread support on the island.
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Monday, March 22, 2010

"more flexible policies governing international labor."

Taiwan Today has all the news that's fit to make you have apoplexy:
Top officials from both the Office of the President and the Executive Yuan intend to reinstate projects to set up special economic zones on the island, sources familiar with the issue revealed.[Special economic zones? If you remember the huha over the airport free trade zone, part of it was because they floated a trial balloon for importing Chinese labor -- MT]

The special economic zones are being deliberated because officials expect a new economic situation to develop following the expected signing of the economic cooperative framework agreement between Taipei and Beijing in June, sources pointed out.["new economic situation" = impaired sovereignty, Chinese dominance over Taiwan's economic policy - MT]

Relevant agencies are in the process of mapping out supporting measures, including infrastructure development, tax credits, special incentives and more flexible policies governing international labor. The Cabinet is expected to unveil these policies within one month, sources said.["more flexible policies on international labor." is this a euphemism for Chinese labor? Or just lower wage rates for the current indentured servant class? -- MT]

They pointed out that during the first stage special demonstration zones will be established at the country’s four major ports, as well as at the free trade zone adjacent to the Taoyuan Aerotroplis and at the nation’s export processing zones.

Pending further needs, such operations can be strategically established throughout the island and ultimately all of Taiwan could be turned into a special economic zone. Future ECFA negotiations can also be conducted on a zone-to-zone basis, they noted.[Ultimately all of Taiwan will be a zone! Future ECFA relations will be on a zone-to-zone basis! But I thought ECFA wasn't going to impair Taiwan's sovereignty? Zone to zone? Not even region to region? Actually, the reduction of Taiwan to a zone is a sort of overt recognition of its reversion to colonial status vis a vis China -- MT]
It's funny to read this and look back at my post on the Taiwan SAR in 2017, and compare it to Hai Tien's excellent response, which I posted at the bottom.
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Daily Links, March 22, 2010

Lotsa fun riding this weekend with The Bushman on his trike in the hills north of Taichung. Enjoy the video of a climb up and roll down a nasty little hill on 3 just south of Jhuolan. Michael K filmed it using his helmet mounted camera.

Got HCR today. Can we get moving on a real bill that addresses human-driven global warming? There still time to save the biosphere....

Speaking of the biosphere, the big news in Taiwan this weekend was the dust storm out of China. Ugh. It struck northern Taiwan. Just another reason to live in Taichung.....

As the President leaves to visit the six Pacific nations that recognize the ROC, Taiwan News explains how Ma is undercutting the previous Administration's foreign policy to isolate Taiwan, re-introduce dollar diplomacy, and cede the Pacific to his pals in Beijing. Taiwan compensated for problems with Mirage fighter jets. The TSU argues that ECFA is suicide for Taiwan. Heritage Foundation uses Taiwan's HSR boondoggle to argue that high speed rail is a bad idea for America. Bicycle sales to grow 10%. Taichung: city without a soul. Taiwan Foundation for Democracy battles political interference? Taiwan's rivers are #2 for curviness in Asia. New justice minister won't execute all 44 prisoners on death row at once. Whew -- I was really worried about that possibility. Rio Tinto trial opens in China. Next round of ECFA talks slated for March 29 in Taipei. Taiwan won't make loan to Ecuador that China refuses to make. The transcript from the 2-28 Seminar at the U of Washington

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Sunday, March 21, 2010

Updated Ride Schedule for April

Nantou roads bow before the awesome power of Eli.

Revised April ride schedule.

April 24-25: Nantou Reprise. I'll be doing this again. Five already signed on, hope to see you there!

April 24: Drew is going on a Paris-Roubaix Tribute Ride. Taichung-Kaohsiung on Highway 17. 260km in one day.

May will have at least one trip on the Northern Cross Island Highway, either 2 or 3 days depending on you. Here's the map for it. I'm slotting that in for May 22-23 with optional monday.

Looking forward to June 19-20, when I hope to take another crack at riding up to Hehuanshan from Taroko Gorge.

As always, let me know if you are coming down to Taichung with a bike on the weekend. I love meeting and riding with new people!
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Saturday, March 20, 2010

Thoughts on fooling oneself

Online death threats against President Ma's daughters and Ma himself made the news this week, although it looks like the former is a protest move. Such threats serve no one.

Threats or not, Ma's popularity remains in a ditch, and is likely to stay there for the foreseeable future. Both the prediction market at NCCU and current polls appear to say Ma would lose if the election were held today, though much depends on who the DPP runs. The Liberty Times trumpeted today (via Taipei Times translation):
The embarrassing truth about how President Ma Ying-jeou (馬英九) has concerned himself with electioneering rather than running the nation is becoming clearer by the day. Despite this, his approval rating keeps falling. Not only Taiwanese, but also foreign academics are starting to doubt his chances of re-election.

Shelley Rigger, associate professor of political science at Davidson College in North Carolina, recently said Ma’s prospects for re-election look bleak because of his abysmal approval rating and public dissatisfaction with the Chinese Nationalist Party (KMT).
But the Liberty Times is wrong on what Rigger thinks; Rigger said in a Q&A session at a hearing this week that she thinks Ma's chances of losing in 2012 are remote. But then she believes him competent, too. It's striking to read the Liberty Times editorial and see how remarkably fact-free it is; not a single policy, poll, or survey is cited, and it comprehensively misunderstands Rigger's position on Ma. There's a better piece in today's LT that more correctly describes and addresses Rigger.

I was reading an interesting piece the other day (sorry, can't recall where) that asserted that studies show that when an erroneous position is not refuted, belief in it is low, but when it is publicly refuted, belief in it rises dramatically, a sort of academic confirmation of Darwin's observation that false theories quickly die, but false facts are impossible to kill. Counterintuitive results like that one may help explain the ongoing problem in my own family that is replicated across many Taiwan families: gangsters preying on seniors. No matter how many times we explain to my father in law, no matter how powerful our evidence, no matter who presents it to him, he continues to believe that the storage sites for ashes in local columbariums actually exist and that he will make a killing on their sale once they are sold. It's basically swampland in Florida....

My sister in law walked into their house the other day to find him once again handing over NT$90,000 to scammers right in his living room. She was shocked; most everyone in our family could use the money, but he gives it to complete strangers for nonexistent investments. She found out that the scammers had loaded the families onto buses and then driven them around northern Taipei county, pointing to columbariums and saying "yours are here, and your sites are there," etc. Could it be more completely transparent?

It's not like everyone hasn't talked to him about it. Not only my savvy investor brother in law, who is a sought after manager in local tech firms, my wife, myself, my sister in laws, both highly educated, but also a relative who runs a funeral home and knows all the sites personally have all carefully explained to him that it is all a scam. Moreover, he lost all his life savings in a previous scam but still hasn't learned to be cautious. All over Taiwan, families face this problem. It's one that is in serious need of government action, one that could benefit whatever party tackled it.

Twain once said that you can't reason a man out of what he wasn't reasoned into. But surely, there must be a way. Because after their savings comes the house they own...
Daily Links:
AWESOME: Virtual Drive down Highway 11 (h/t to Kerim)

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Friday, March 19, 2010

Expanding Colossal Financial Aggregations

We're trying to help you, Oxmyx."
"Nobody helps nobody but himself."
"Sir, you are employing a double negative."

The flow of good commentary on the ECFA agreement between the KMT and the CCP continues unabated. Pick up local business magazines and you can read articles entitled: ECFA: elixir of life or poisonous brew? and similar. Today the Taipei Times offered an excellent piece by the pro-Taiwan Taiwan Think Tank's Chien Yao-tang that highlighted both the propaganda drive and the eventual negative effects. First he points out that the two generation gap in wafer fabrication technology that President Ma has proposed to protect Taiwan's tech is actually an illusion:
The only restriction the Ma administration placed on this opening up of Taiwan’s electronics sector was that the production technology for wafer fabs in China lags two generations behind Taiwan’s. While it may sound like this seeks to minimize the loss of Taiwan’s cutting-edge technology to China, it is in fact a sure way to hand over technological know-how to China.


In addition, there is a two-generation gap between Taiwan’s United Microelectronics Corp (UMC) and China’s Hejian Technology, which UMC wishes to acquire.

If this happens and Hejian increases its production technology to the same level as UMC’s, does that mean UMC will have to pull out of Hejian? Of course it won’t. So in reality, the two-generation gap in technology is just to dupe the public.
Needless to say, the DPP program was to protect this industry and curtail its ability to move to China. Ma's program is to hand it over to the Chinese. Oh, and the elimination of tariffs that the Ma Administration has claimed Taiwan will need to keep its markets in China in the face of the free trade agreements? What's the actual tariff on Taiwan's exports to China, according to Chien?
The average rate is 0.58 percent.
ECFA's benefits are an illusion. Luo Chih-cheng of the pro-Taiwan Taiwan Brain Trust observed in another Taipei Times piece that some Taiwanese firms in China don't want ECFA but are either directly pressured, or not saying anything for fear of retaliation by Beijing or the KMT. The Ministry of Economic Affairs (MOEA) said that additional industries will be hit by Chinese goods, raising the number to 17 from the 12 originally predicted.
The five additional sectors are: traditional Chinese herbal medicine, agricultural pesticides, environmental medicines, veterinarian medicines, and wood and bamboo products.

The original 12 sectors are garments, underwear, sweaters, swimwear, towels, bedding, socks, footwear, suitcases, home appliances, stoneware and ceramics.

The government has also put restrictions on Taiwanese banking investments in China....
From the Taiwanese side, to ease concerns that the Taiwanese banking sector may use local deposits to fund its loan businesses in China, the commission’s new regulations stipulate that half of the loans to be granted by the banks’ to-be-established outlets in China will have to come from Chinese depositors. The commission has also placed a cap on each Taiwanese bank’s China-bound investment at less than 15 percent of a bank’s net worth or 10 percent of a financial service provider’s net worth.

All of this means that the capital outflow of 14 Taiwanese banks to China will be capped at NT$25 billion (US$785 million), while that of 13 financial service providers will not exceed NT$50 billion.

To a certain degree, both rules aim to put a brake on the acceleration of China-bound capital flight within the banking sector, which was previously barred from branching into China.

This contrasts with earlier estimates by China Development Industrial Bank president Simon Dzeng (曾垂紀), at the time executive vice president at Mega Financial Holding Co, that once the government gave the green light, most domestic banks would move into the Chinese market “within three months,” resulting in a fund outflow of as much as NT$300 billion.
What's Mega Financial Holding Co? Well despite the name, it is not something out of The Jetsons or Destroyer Duck. Hold that thought....

Sorting out the links between the US financial industry, China, and Taiwan is going to be a full time job and I sure am glad I won't have to be doing it. But just a taste: prior to the 2008 election the global finance world was backing Ma, and is now getting its support returned in the ECFA agreement. A friend flipped me the Taipei Times editorial I linked to above, and this seemingly unrelated piece in the China Post, with Ma congratulating Park Strategies on opening its office in Taipei:
President Ma Ying-jeou described a U.S. strategic consulting firm's decision to set up its Asia operations center in Taipei as "wise" during a meeting with former U.S. Senator Al D'Amato, founder and managing director of the company, at the Presidential Office Thursday.


D'Amato said Park Strategies chose Taiwan as the location for its operations center in light of the vast business opportunities expected to be created with the warming relations between Taiwan and China and a proposed economic cooperation framework agreement likely to be signed between the two sides.
The VP of Park Strategies is Sean King, and some of his articles are listed here. King, a big fan of President Ma, is a former Senator D'Amato staffer, D'Amato himself having a long and very positive interest in The Beautiful Island. Recall that a financial industry official told me shortly before the election that the financial industry had been lining up players in anticipation of a Ma victory for two years. ECFA is not just about selling out Taiwan to China....or rather, not everything sold will be sovereignty. But it is who is doing the buying and selling that is interesting.

Past and present commingle: when the KMT came over in 1949 the bond holdings of Chinese, Taiwanese, and Japanese (Jan 2010 lawsuit in US on the issue) were converted into assets of the Bank of China, which is now a unit of Mega Holdings, and which is named in passing a lawsuit against the KMT to recover the monies. An article on the lawsuit notes:
The bonds have exotic names like Imperial Chinese Government Hukuang Railways Gold Loan, French Boxer Indemnity and 1913 Reorganization Gold Loan and they are all in default.

Holders of Chinese bonds issued from 1895-1942 which are all in default since 1949 are taking on the former masters of Nationalist China – the Kuomintang. The bondholder plaintiffs which include two American bond holding corporations and the Taiwan Civil Rights Litigation Organization are suing the Kuomintang’s business management committee for an accounting and redemption of 120,000 separate bonds some over 110 years old and backed by gold.

The name of the case filed in the United States District Court for the Northern District of California is Taiwan Civil Rights Litigation Organization et al v. Kuomintang Business Management Committee – Case No. C10-362JL.
What's Mega Financial Holdings? This little blurb on Grand Cathay notes:
Unlike most other Taiwanese securities firms, which are owned and operated by family groups, Grand Cathay is owned by a group of institutional investors. The largest shareholder of Grand Cathay is an investment arm of the KMT (Kuomintang), controlling 25% of the firm. Although the KMT is no longer the ruling party, it is not expected that its status as the largest shareholder of Grand Cathay will change over the near term.
That investment arm of the KMT? Oh yeah -- Mega Holdings.

Recall that the Financial Supervisory Commission has said that the current restrictions on Taiwanese bank investment in the PRC will be relaxed over time.

Yes, and a big beneficiary will be big institutional investors...like Mega Holdings, the investment arm of the KMT.

Manus Manum Lavat.

More Daily Links
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Naval Gazing

The Jamestown Brief, consistently useful on China, offers a piece on Taiwan's navy this week:
The outlook for ROCN sea control is worsening by the day. For one thing, in the event of an imminent conflict, Taipei must contend with the likelihood of a preemptive attack from China’s growing force of short-range ballistic missiles, which can strike at targets like ports and airfields [3]. With the ROCN fleet concentrated in a few ports like Tsoying, Suao and Keelung, this constitutes a critical vulnerability in the island’s defenses (GlobalSecurity.org). In a much-discussed 2008 article, William Murray of U.S. Naval War College opines that China “has shifted its anti-Taiwan military strategy away from coercion by punishment toward denying Taiwan the use of its air force and navy.” Neither the ROCN nor the Republic of China Air Force (ROCAF), says Murray, “is likely to survive such an attack” [4].
The meat of the piece: what do Chinese observers of the ROC Navy think?
Chinese observers by and large agree that, for a variety of reasons, the Taiwan Navy is not up to par regarding the sea-control functions outlined in the ROCN Vision. Condescension pervades Chinese analyses of the ROCN. Writing in Modern Navy, Yang Peng notes that Taiwan’s surface fleet is acutely vulnerable to guided missile-strikes. The fleet’s AAW pickets are particularly susceptible to saturation missile attacks (baohe daodan gongji) and rely excessively on the protective umbrella hoisted by tactical air power [8]. Yang forecasts that Taiwanese ships will hesitate to venture beyond the range of land-based air cover. This reticence severely constricts the Taiwanese Navy’s tactical radius. Wu Letian not only questions the Taiwan Navy’s ability to prosecute anti-submarine and minesweeping operations, but also deprecates its capacity to fight at sea for very long [9].
We're wholly reliant on the US here in Taiwan. FAS has a complete list of ROC navy ships. Note that the Taiwan navy possesses many fast attack craft which are not covered in the Jamestown brief discussion. This force could probably do useful damage and deterrence in any cross-strait invasion scenario, and should probably be expanded. There is a useful description of them at GlobalSecurity.org....
Daily Links
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Monday, March 15, 2010

Evolving Colonial Formosa Again

Idle speculation: I was reading the speculative articles on the Brobdingnagian engineering project of running a vehicle tunnel under the Taiwan Strait to connect Taiwan with China. This got me thinking about water: anyone ever thought that Taiwan, with its massive water surplus (80% of the water that falls on the island runs back to the ocean) is an ideal place for a water deficit nation like China to grab? Maybe you never did, but I'd bet dollars that the CCP brain trust has. In contrast to a vehicle tunnel, running a large water pipe under the Strait is a simple and strai(gh)tforward engineering problem.

Reuters published an unintentionally humorous interview with KMT Secretary-General King Pu-tsung, Ma's hatchet man, known as "little knife". The Reuters reporter who did the interview, Ralph Jennings, is on the ground in Taipei and had no trouble identifying the problem locals have with Ma's policies (unlike some):
The KMT and DPP will face off in tense local elections at the end of this year that are seen as a bellwether for the 2012 presidential race. The KMT has already lost seats in recent by-elections on voter concerns over its pro-China policy.
King comically assured all readers that everything was going to be peachy-keen:
"ECFA can be a turning a point. Wen Jiabao said he's going to yield benefits to Taiwan, so how can you say the deal would sell out Taiwan?" King said.
Wen Jiabao said it, I believe it. Everyone knows that China's leaders are inveterate truth tellers.

There's been quite a few pixels expended in debating the effects of ECFA on Taiwan industries, but less of a focus on the way Taiwan, as a Liberty Times commentator noted a couple of weeks ago, is becoming a de facto colonial holding of China: as its industries are sucked into China's maw, the island is gearing up to supply plastics for processing, steel, and other basic industrial materials. China is not only de-industrializing the island; it is returning it back to the 1930s when Japanese planners envisioned Taiwan as a place that would provide basic industrial and agricultural inputs like rice, timber, camphor, and sugar. Former Taiwan rep and international trade specialist Benjamin Lu pointed this out in a Taipei Times interview:
“I certainly don’t believe that the proposed ECFA will provide any opportunity for Taiwan to increase its exports to the PRC [People’s Republic of China],” he said. “The reason is that what we can manufacture in Taiwan can be manufactured in mainland China at a much cheaper price. We have no competitive edge at all, even with the concession of a tariff provided by ECFA, if there is any. There is a slight chance for Taiwan to export more tropical fruit to mainland China and some semi-finished products.”
We have already seen this reversion in Mailiao, where new petrochemical and steel plants, running on state-subsidized water (supplied by a hugely destructive dam in the mountains above it), will supply the Chinese market, but another complex is going in Changhua which will borrow water and hurt a wetland (Chinese). Not just waterfowl are suffering: the Formosa Plastics coal-fired power plant at Mailiao is the fifth largest single human source of CO2 on earth. Going in Changhua is the Changgong Power Plant, another coal-eating monster that when completed will edge out the Mailiao plant to become number four. The plant is being built to serve Changbin Industrial Park, slated for completion this year, on the coast north of Lukang. This entirely retrograde industrial movement, for the sake of China, is punishing Taiwan's dwindling natural resources and warming the earth. Our industrial structure is not the only thing being shaped by increased contact with China.

Taiwan News argues in another hard hitting editorial that the title of the cross-strait economic agreements constitutes an acceptance of domestic status vis-a-vis China, in contrast to Ma's promises that ECFA will not impinge on the island's sovereignty. To wit:
After all, a cursory review of trade agreements between Beijing and other countries indicates that the PRC is meticulous in ensuring proper "protocol" and insisting on the use of formal titles. The innumerable examples include the "Framework Agreement on Comprehensive Economic Co-Operation Between the Association of Southeast Asian Nations and the People's Republic of China" signed on November 4, 2002.

The only exceptions appear to be pacts between Beijing and the subordinate "special administrative regions" of the former British colony of Hong Kong and the former Portugese colony of Macau.

In both of the "closer economic partnership agreements" (CEPA) signed with the Hong Kong Special Administrative Region (HKSAR) and the Macao SAR on June 29, 2003 and October 18, 2003, respectively, Beijing refrained from using its formal status and instead used the term "Mainland" (literally "neidi" or "inside territory" instead of the usual "dalu") and the geographical phrases "Hong Kong" and "Macau."

Through footnotes, the preambles of both CEPA pacts also explicitly define "the Mainland" as referring to "the entire People's Republic of China," which includes the two SARs.

The "cross-strait economic cooperation framework agreement" title apparently agreed upon by the KMT and the PRC's ruling Chinese Communist Party departs from international protocol and is also by no means "ambigous." Instead, its use constitutes direct evidence of acceptance of a "domestic" status within the PRC parallel to that of the Hong Kong and Macau "special administrative regions."

Hence, the refusal of the Ma government to insist, at the very least, that the formal WTO titles of both parties be used in the title and body of the ECFA constitutes a profoundly "political" concession of our international legal status as a state or "economic legal entity" and has troubling implications for Taiwan's sovereignty and economic autonomy and horizons.
For Beijing, ECFA is about annexing Taiwan. D'oh. James Wang commented in the Taipei Times on ECFA, saying it is pretty clear what Beijing wants:
Once Taiwan buys into the “one China” principle, Beijing will be taking a mile for every inch given to it and say “thank you very much.” It will be reaping its “early harvest,” alright: a present of Taiwan’s sovereignty. It may even well mete out its concessions and remove the odd missile or two, orchestrating a “warming” of the Taiwan Strait situation and pushing for “peace talks.” This would, in turn, make all the more plausible China’s case to the US that there is no real need to sell arms to Taiwan.
All you can say is BINGO. Meanwhile government officials continue to insist ECFA will be signed in the very near future. Please note the government's constantly shifting rationale for it -- remember when we had to have ECFA IMMEDIATELY to save the economy? Oh yeah, two years have passed with no ECFA, but we have recovery already now with the links to the China market we already had under the DPP. Then it was to prevent marginalization by the ASEAN FTAs -- which have turned out to be not so great for those trading with China. Note also that the announcement is from V-P Vincent Siew: remember when he was the amazing technocrat that Ma promised to make Czar of All Economies in Taiwan? Yea, verily, it was the bright spring of our naivete.

In other ECFA news, AFP reports that Taiwan's financial industry wants to be able to take a 30% stake in Chinese banks.
The government hopes such a move would let any individual Taiwanese bank to buy up 30 percent of any Chinese lender, as opposed to the current 20 percent ceiling China imposes of foreign investors, the Commercial Times said.

It said Taiwan also hopes its banks will be allowed to open branches as soon as they enter the mainland market, instead of having following the prerequisite that foreign banks have to first open representative offices for two years.
As I have been saying, the main beneficiary of ECFA is going to be the financial sector; local manufacturing industries are going to be decimated. Will China really let Taiwan take out stakes in its financial sector? That isn't how China works.

Businessweek offered another China Pessimism article: biggest bubble in history. Because China is so opaque, it is hard to make judgments about what kind of handle the government has on the problem. Yet, if you recall famous Taiwan scandals that occurred in the credit sector during the martial law era, such as the massive Tsai family conglomerate collapse, one might argue that the authorities in authoritarian states show a marked reluctance to put a stop to things once the size of the problem grows. Hence that chilly feeling between the shoulder blades when one contemplates China's bubble -- you know that bubble economy that Ma desperately wants Taiwan to graft itself onto. Wouldn't it be ironic if ECFA came online just as China's growth went ka-boom!

Idle speculation: is the desire to annex Taiwan a factor in keeping China's yuan down? The material basis for Taiwan's independence is its vibrant industrial base, which will undoubtedly be stimulated by a rise in the yuan, both in terms of rising demand for exports when the currency appreciates, and because as the cost of manufacturing rises, firms will move out (and back to Taiwan).
Daily Links
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