Sunday, July 31, 2011

The Soong Factor

Dom&Sophie_78
James Soong, PFP chairman and political heavyweight, interviewed in the Liberty Times (Taipei Times trans). Consider:
This reminds me of the 713 Penghu Incident. Dean [of the Yantai United Junior High School ] Chang Min-chih (張敏之) had been a member of the KMT since he was 17, but just because he stood up for the students who did not wish to join the military, he was labeled a communist spy and executed. It’s a very cruel thing. I joined the party when I was 18, and then I was dismissed from the party.

I don’t want you to think that my fate was the same as Chang’s. What I want to say is that I do not have any personal issues [with Ma], and that is the principle that I, and the PFP, hold to adamantly.

It is also this principle that I told honorary KMT chairman Wu [Poh-hsiung] (吳伯雄). At the time, some people wanted me to go back to the KMT and be an honorary chairman, but I said, “is being a dismissed party member honorary?” So, the first thing [for the KMT] to do is to clarify what happened back then.

We’re always criticizing the communists, but even they understand the concept of righting old wrongs. Besides, I wasn’t the only one who was expelled. Back in the old days, a lot of KMT elites, including Wu Rong-ming (吳容明) [and] Chin Ching-sheng (秦金生) [who were among the] best civil servants and party members of the KMT, had been expelled too.
In the introduction to the interview, Soong positions himself as the true heir to President Chiang Ching-kuo,  who is much better remembered in Taiwan than his father. Note that here he aligns himself rhetorically with KMT reformers of the past, thus playing the victim card and positioning himself as a reformer at the same time. Soong was kicked out of the KMT in November of 1999 after announcing a run at the presidency as an independent when he lost the KMT nomination to Lien Chan.

Soong, who ran as a unificationist in the 2000 election on a platform quite similar to the one Ma is currently pursuing (relations neither domestic nor international, peace treaty, EU-type commonwealth agreement, etc). He also maintains that Taiwan does not need a military since China won't attack it as long as it doesn't declare independence.

Soong was smart enough to nominate a pro-independence surgeon as his Veep in the 2000 election. If he runs seriously, he might do the same in this election. Although the pan-Green camp is hoping Soong runs, it is important to remember that he will also take votes from the Greens and independents who dislike the KMT, especially if he runs a pragmatic pro-Taiwan campaign like he is capable of doing. In the 1990s he was widely given credit for learning Taiwanese and for running the "provincial government" of Taiwan quite well, which raised his standing among the locals.

Much depends on how Soong positions himself in the campaign....

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Saturday, July 30, 2011

What I learned in Tainan

Spent this week in Tainan, a place I love to visit. Overflowing with history, it has the island's best looking women and friendliest people, except for where you're from. I learned a lot in Tainan this week......

Chinese Tourism Profits: Overhyped, Oversold, and Over There

Had a great time biking on Pinglin Road today with Domenic and the lovely Sophie. Here we stop in Nanhu for lunch. 

A few weeks ago the Taipei Times had a piece on the way the tourism industry has not seen the big boost from Chinese tourists the Ma Administration has promised. I remarked then:
Academic with some good observations on the independent travelers from China, including the comment that Chinese tour firms owe Taiwanese $173 million. If Taiwan makes a billion gross from China annually in tourism, at a 5% return that's basically the industry profit since Ma boosted the tourism numbers.
Haha. Because China doesn't pay Taiwan tour firms, essentially the industry as a whole hasn't made a profit on the tourist "boom." However, it's even worse than I thought, as AP reported today in another excellent investigative piece. Just ignore AP's historically inaccurate and factually inept Formula describing Taiwan's relationship to China (didn't "split in 1949"), and feast your eyes on the numbers and quotes:
But interviews by The Associated Press with industry officials and Taiwanese tour operators, and an examination of China's Taiwan tour packages, suggest that the figure has been overstated by at least $700 million. Questions about the accuracy of the government's claims could prove embarrassing to the China-friendly Ma as campaigning heats up.

.....

According to the Taiwan Tourism Bureau's Alice Chen, the Chinese tourist influx has meant big money for the island of 23 million people. Chen says that in 2010 some 1.16 million Chinese tourists spent NT$59.1 billion ($2 billion) in Taiwan, providing a substantial boost for an industry long in the doldrums.

The bureau's figures, Chen says, were collated on the basis of interviews at airports with just 1,896 of the million-plus Chinese visitors, rather than relying on hard data from vendors of tourists services — hotels, restaurants, shopping venues and the like.

.....

The government estimates that Chinese tourists spent an average of $246 a day on the island in 2010. That's made up of $142 for shopping and $104 for the services that are provided by tour package operators — hotels, meals, local transportation, venue admission and incidentals.

But an examination of tour package prices shows they are much lower than the goverment's estimate and tour operators say that, at best, they get half of the money Chinese tourists pay to mainland tour agencies for these tours. That amounts to at least a $700 million hole in the government figure.
The tourism push is an ideal Ma Administration program: it soaks Taiwan to provide resources to China, to large businesses, in fact:
The Taiwan operators say their current business model has been foisted on them by tour operators from the Chinese territory of Hong Kong. These Hong Kong operators comprise only 13 of the 300 operators the Taiwan government sanctions to receive Chinese tourists on the island, but rake in some 50 percent of the take.
The Taiwanese operators, as the article recounts, are forced to offer cut-rate tours with tons of shopping to make up for the losses they take. This may have something to do with the legendary ill-behavior of Chinese tourists: I'd crap all over Taiwan too if I were dragged from store to store, given to substandard accommodations and meals, and abused and forgotten as a mere cash cow.

This disparity between government pronouncements and reality should also call into question the government's constant claims that the Chinese tourists really like Taiwan and would return. Independent and serious survey work is needed on this. It should also call into question key numbers in other areas of China relations, such as ECFA. Hopefully we'll see AP devote itself to a hard look at the numbers.

Should add that just because they tourism firms aren't making profits, doesn't mean that Taiwan as a whole doesn't gain economic benefits.

Finally, I'd like to end this post on a totally warm and positive note. A wonderful warm ad on Taiwan tourism. Don't miss it.


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Friday, July 29, 2011

Week Round up of Neat Stuff

Had a great time in Tainan this week, meeting with all kinds of wonderful people and visiting stores and shops all over the Greater Tainan area. More on that later.

So deepest apologies for the light blogging this week. So much going on....

First, Randy Schriver has a great piece in the Washington Times on the US policy of sacrificing all else to maintain a mil-mil relationship with China, a policy which, he says, is Bound to Fail:
As a previous senior director for policy toward the People's Republic of China (PRC) at the Pentagon, I once had responsibilities for managing U.S.-China military relations on behalf of two secretaries of defense. Through work at the Pentagon and subsequent work both in and out of government, I have watched closely as the military relationship with China has developed. To say the results from our efforts have been disappointing would be a gross understatement.

The United States is correct to want greater transparency from the PLA; to enhance the safety of operations in the Pacific; to demonstrate intentions and capabilities for deterrent effect against potential PRC provocations; to reduce the chance of miscalculation through candid dialogue; to seek cooperative approaches to challenges in the global commons; and to influence a younger generation of PLA officers. Yet we now have ample evidence gleaned from 30 years of data that we are further from, not closer to, these goals. Moreover, three decades of attempted engagement have conditioned Beijing to advance its own objectives by leveraging the continuing pursuits of the ardent suitor found in Washington.
Schriver is making points which I have made again and again on this blog -- it's nice to see them in print in Washington. Not much else you can about an article that is comprehensively right, except you should read it all.

President Ma was interviewed in WSJ this week.... note the description of Ma....
Mr. Ma, 61 years old, took office in May 2008 after winning the island's fourth direct election for president. He received a doctorate in law of the sea and international economic law from Harvard Law School in 1981, before he returned to Taiwan and started as the English interpreter for then-president Chiang Ching-kuo. He rose to minister of justice and then mayor of the capital, Taipei, before winning the presidency amid widespread corruption accusations against his opponent's party and outgoing President Chen Shui-bian.
There was some grumbling among the pro-Taiwan crowd of the short description of Tsai Ing-wen as a "former law professor" but the article was really about Ma, and isn't meant to compare the two, so I don't see any bias there (though I have no doubt where WSJ's heart will be during the election). I'll call bias on WSJ when I see a pattern of omitting Tsai's qualifications -- sorry, but one sentence doth not a pattern make.

In any case, the serious omission here isn't Tsai's own policy background, Phd, and much better degree than Ma, but the report of his advancement without mentioning that it was made possible because he emerged like Athena from the head of the old KMT Party-State. I'd bet that we go the next six months of the run-up to the election without any major media pieces on Ma's longtime service to the anti-democracy side in Taiwan's politics, but considering that there were only two in the previous election, I doubt anyone will cover that bet.

The article says that Ma said the purchase of F-16s is getting harder and harder. Yeah -- when Ma was Chairman of the KMT during the Chen Administration, his party blocked the question of the purchase from appearing on the floor of the legislature repeatedly. He doesn't want them.

Fun this week with the revelation that Chinese independent travelers aren't flooding Taiwan with their itinerary-free, money laden presence. AFP reported:
Taiwan’s travel operators said Thursday they were "shocked" that fewer than 600 solo Chinese tourists had visited the island since a ban on such travel was lifted a month ago.
What could you expect when the government set it up so that the travel agency is punished if the independent tourist goes missing? Why would they promote such travel, given the risks? The Taipei Times also pointed out that Chinese youths are busy taking exams so numbers will be low, while the FT column Beyond Brics said Chinese tourists were cramming into Taiwan -- in tour groups, to be sure. Expect these independent traveler figures to rise. I can't wait to run into some of these people on my bike.
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Thursday, July 28, 2011

Hitler Engineering

Hitler Engineering in Tainan, Taiwan
After his retirement as leader of Germany, Hitler opened this small engineering firm in Tainan.
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Tuesday, July 26, 2011

Chinese Su-27s breach center line in Strait =UPDATE= FT edits out correct history

Cycling on a perfect Taiwan day.

This is why we don't need F-16s....

The Ministry of National Defense announced that Chinese Su-27s allegedly chasing a US surveillance aircraft crossed the invisible center line in the Taiwan Strait:
The military and national security apparatus was in “full control” when two Chinese Sukhoi-27 fighters crossed the centerline in the Taiwan Strait on June 29, the Ministry of National Defense (MND) said yesterday.

The Chinese-language newspaper United Daily News reported that one of the two Chinese fighter aircraft had crossed the theoretical median maritime border between Taiwan and China while allegedly pursuing a U-2S high-altitude US reconnaissance aircraft.

Two Taiwanese F-16 aircraft intercepted the Su-27s, which subsequently returned to Chinese airspace, the report said.
A KMTer spun the incident as one taking place between China and the US, which did not involve Taiwan, an interesting viewpoint. I guess "launching fighters" is the same as "not being involved."

Like Helen of Troy, this incident launched a thousand (air)ships as netizens dredged up old stories. The adherence to the allegedly 1951 US-defined centerline is of recent vintage, as this 2008 piece notes:
From 1949, when nationalist forces left the Mainland and went to Taiwan, until 1999, there were no restraints on Taiwanese jets flying over the line, Lee said.

“During the 50 years ... PLA air force fighter aircraft were seldom active over the strait, and the two sides seemed to have a tacit understanding and lived in peace with each other,” Lee wrote in the September 2008 issue of Taiwan's Chien-tuan K'o-chi (Defense Technology Monthly).

China stepped up flights over the strait after Taiwan President Lee Teng-hui adopted his two-state theory. To avoid conflicts, Taiwanese jets gradually withdrew training flights to areas east of the mid-line. Freedom to conduct missions over the line was “greatly reduced,” Lee wrote.

“However, there was not yet a formal announcement to the outside world, and at that time, Chinese fighter aircraft activity west of the Taiwan Strait mid-line was also very cautious,” he said.

“When the former minister of national defense publicly announced that Taiwan's fighter aircraft would never cross the mid-line, it was the equivalent of announcing that Taiwan had abandoned the airspace west of the mid-line and after that, Chinese fighter aircraft activities in this area increased daily, and gradually became normal,” he said.
But as this 2004 piece in the Straits Times observes, the line has never been clearly defined between the three gov'ts -- because Beijing fears that a clear cut demarcation in the Strait will make Taiwan even more independent than it already is. Other pieces give clear lines.

In 2004 the TSU actually called for a new constitution to clearly define what is Taiwan's and what is China's in the Strait -- who owns what in the Taiwan Strait will become yet another contested issue if Taiwan formally ratifies its existing de facto independence one day. You can imagine what China will do -- fight rearguard sovereignty actions over the Penghu, which are "indisputably Chinese and have been for every freakin' second of the last 5000 thousand years." Then will come the struggles over fishing and mineral rights. Taiwan independence won't be the end of the process of disengagement from China, but the beginning of one....

It should be clear by now that the whole fictional construction of "5,000 years of Chinese history" exists merely to facilitate China's territorial expansion.

The Washington Times reported on this incident in more detail:
Two Chinese jet fighters came dangerously close to a U.S. EP-3 reconnaissance aircraft last week during an encounter reminiscent of the aerial collision that touched off a U.S.-China crisis.

Two F-7 jets tracked the EP-3 as it flew in international airspace off the northern coast of China, U.S. intelligence officials tell us.

"They came within 250 feet," said one official.

The encounter was close, said some officials, but less threatening than Chinese aerial engagements in the past, which have come within a few feet of U.S. reconnaissance aircraft.

.....

U.S. intelligence agencies have increased electronic intelligence gathering from China in order to pick up new information on recent Communist Party leadership changes.

The aerial intercept also coincided with renewed Chinese fighter sorties near Taiwan. For the first time in months, Chinese military forces began flying new Su-30 fighter bombers close to the demarcation line that runs down the center of the Taiwan Strait.

At least 12 sorties were detected by U.S. intelligence. The flights were viewed by U.S. officials as provocative and coincided with the major Communist Party congress in Beijing that ended last week.
Some reports in the US Chinese language media from a few years ago appear to indicate that Chinese jets sortie hundreds of times a year and during Chen's UN entry campaign appeared to increase their sorties in response. But this may merely be disinformation aimed at Chinese in the US to say: "Look what we're doing about the awful Chen Shui-bian!"

MEDIA: One really great thing about the FT piece is that Kathrin Hille, who was one of the most knowledgeable, tough-minded reporters about Taiwan I met here, wrote:
Taiwan has not been controlled by a Beijing-based government since China ceded the island to Japan in 1895, but Beijing claims sovereignty over the self-ruled island.
Pithy and historically-accurate. Are you listening, AP? Thanks, Kathrin, that was really great to see.

UPDATE: Totally gutless FT has edited out the "since 1895" remark, leaving: "While Beijing still claims sovereignty over Taiwan and has threatened an invasion if the self-ruled island declared independence, relations between the two sides have warmed since Ma Ying-jeou was elected president in 2008" Dear FT, in case you were wondering why people read blogs, this is why.
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Cyclists and Pedestrians: be careful! Sign on a tourist bridge in Dasi township.

DPP statement on the South China Sea. The second paragraph makes a very important point: Taiwan should not serve as China's pawn in the South China Sea disputes. It also calls for multilateral solutions -- note that China has pursued bilateral negotiations, since China is much bigger than any single regional state, giving Beijing a huge advantage. Taiwan's own status hovers in the background -- China wants a bilaterial solution to that, and local pro-Taiwan types want to internationalize (multilateralize it).

++++++++++++++++

Democratic Progressive Party
Statement re.
The South China Sea
7/23/2011

In light of the recent disputes in the South China Sea and the draft agreement on the guidelines for the implementation of the Declaration of Conduct between China and ASEAN, the DPP issued a statement reiterating its position: issues related to the South China Sea must be dealt with in a multilateral framework. Additionally the important principles with regard to environmental protection, sustainable development and peaceful resolution must be in line with: the 2008 Spratly Initiative (proposed by the former DPP administration), the United Nations Charter, the 1982 United Nations Convention on the Law of the Sea, and the 2002 Declaration of Conduct of Parties in the South China Sea.

Furthermore, despite several calls from China for “cooperation between the two sides of the strait” on the South China Sea issue, the DPP urges President Ma Ying-jeou’s Administration to take part in multilateral talks with all parties involved in order to serve Taiwan’s best interest and to preserve regional stability. When he served as Deputy Chair of the Mainland Affairs Council in the 1990‘s, President Ma stated that the two sides of the strait must set aside sovereignty differences and work together on the South China Sea issue, dealing with outside parties in a unified way. The DPP strongly opposes this proposal as we believe that bilateral talks alone will not help in resolving disputes in the region, and will send the wrong message to the international community. 



The DPP believes that disputes in the South China Sea will not be effectively resolved solely through bilateral negotiations as we have already seen the escalation of tensions in the region due to military exercises conducted by China, Vietnam, the Philippines and the United States. The DPP believes that only open communication channels, through a multilateral cooperation framework, are the best solution to insure the common interests of all relevant parties and to maintain peace and stability in the region. 



DPP Chair Tsai Ing-wen has already indicated that Taiwan has its own viewpoint regarding the Spratly Islands – one that is different from China’s claims over the territory. Taiwan should not be restricted to a cross-strait bilateral framework. Only an open multilateral framework will prevent unnecessary tension or potential conflicts in the region. 



The DPP reiterates its four core standpoints regarding the South China Sea, which are: to ensure sovereignty; to ensure peace and stability in the region; to enhance multilateral cooperation; and to promote sustainable development. These points are in accordance with the Spratly Initiative proposed by the DPP government in February 2008. The initiative proposed by the DPP advocates for environmental protection, setting aside sovereignty disputes, promotion of sustainable development versus exploiting natural resources, and resolving differences through peaceful means.

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Monday, July 25, 2011

Ma: Old Whine about new Blottos

To the Jews I became like a Jew to win over Jews; to those under the law I became like one under the law--though I myself am not under the law--to win over those under the law.

Here we go again.....(Taipei Times)
Since Ma was elected in 2008, the GIO and the Presidential Office have filed complaints with the El Sol de Mexico, the Wall Street Journal, CNN and The Associated Press, either saying that the president was misquoted or clarifying remarks ostensibly taken out of context.

The previous disputes took place after Ma conducted interviews in English, leading lawmakers from both camps to demand that future sessions take place in Mandarin over fears of misinterpretation to an international audience.

Conducted in Mandarin through a translator, the Yomiuri Shimbun report quoted the president as saying that he would “not rule out engaging China in political negotiations” or signing a cross-strait peace deal on the issue of unification with Beijing.

The Presidential Office transcript confirmed Ma as “not excluding” the two touchy subjects, but Government Information Office Minister Philip Yang (楊永明) maintained that the president did not talk about either the matter of unification or acceptance of the “one China” principle.
This is the common pattern -- Ma makes statements on key issues of sovereignty and policy to foreign audiences that are at odds with what he tells the home crowd. He then claims that he was misquoted.

After this has happened so many times, it should be obvious this is policy and not error. This way Ma gets to play the victim card while browbeating the foreign press, while being all things to all men. Nice.
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Sunday, July 24, 2011

Discuss: CNN for 50 best food list has no Taiwan food


CNN produced a list of 50 of the world's top foods. Inevitably, it included no Taiwanese dishes. Inevitably, it made an error with the only dish commonly-associated with Taiwan, stinky tofu. Inevitably, Taiwanese were affronted that there were no Taiwanese dishes on the list. Taiwanese netizens, you need to get out more.

Arguably, there are several really ridiculous choices. WTF were they doing ranking the incomparable masala dosa at 49? Below ketchup (and ketchup instead of chili sauce or salsa!)?! 神經病! How could a list of the top 50 foods contain no cheese? No kimchi? And two British foods to one French? List parma ham but not spaghetti in any form? Etc etc etc.

Does anyone at CNN ever eat out?

But all that said, there is one indisputably Taiwanese food that has taken the world by storm in recent years, and could well have been included on the list: pearl milk tea.

What would you put on the list from Taiwan, if anything?
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KMT wealth management

The incomes of the two major parties in Taiwan were revealed yesterday by the Ministry of the Interior:
The Chinese Nationalist Party (KMT) made NT$3.5 billion (US$121.5 million) last year, primarily on business investments, far outpacing the amount made by the Democratic Progressive Party (DPP), information from the Ministry of the Interior (MOI) showed.

Stock dividends accounted for almost NT$2.9 billion last year and made up more than four-fifths of the KMT’s total earnings, raising concerns about the extent to which the party depends on earnings from its assets and not donations.

The figures, published on Thursday by the ministry, reveal that political contributions to the KMT amounted to NT$240 million, or 6.9 percent of its earnings. It also earned NT$251 million in vote subsidies and an income of NT$76 million from party dues.

The DPP, meanwhile, received NT$192 million in political contributions and a total income of NT$626 million.
The article points out that the bulk of the investment income comes from two party-owned investment companies. President Ma, currently Chairman of the KMT pledged years ago to get rid of the party assets, which the KMT claims have been placed in trust. These assets were accumulated during the martial law era when the KMT ran the KMT party-state. The party should have been stripped of them years ago.

If the KMT made $2.9 billion from stock dividends, then, given a 5% return on investments, the KMT must have something like $60 billion NT, or $2 billion US, in investment assets.

One wonders which companies are the target of those investments. As a friend of mine pointed out to me yesterday, the people and party running the current cross-strait economic interaction -- which largely benefits big business -- are also the people and party running the KMT. But there's no conflict of interest there, of course. The assets are in trust. In fact the KMT even forgot they had them.... damn the DPP for reminding them during every election....
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Sanity Break

Sanity break: my friend Russ McClay posted this to Facebook, saying:‎ "1400 or so photos I shot off my balcony this afternoon. Strung them together like a string of beads to make this 24fps clip. Funny how the clouds are very active but they don't really go anywhere....One photo every 5 seconds. 1 hour = 720 images. 720 frames @ 24fps = 30 seconds. The video is about 1 minute...so about 2 hours."
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Saturday, July 23, 2011

An Old Whine In New Bottles: Ma to "fight corruption" with new Agency

Corruption is nature's way of restoring our faith in democracy. -- Peter Ustinov

Big news this week as President Ma has created a new anti-corruption commission. Here's the news:
Revisions to the Court Organic Act that were passed earlier this year will see Taiwan emulating Japan and South Korea by setting up a new special investigation unit under the Taiwan High Prosecutor's Office. Prosecutors with a high level of integrity and strong investigative skills will be assigned to this unit and will exclusively pursue investigations of major corruption and economic crimes that involve legislators, government ministers, high-level military officials, the heads of the five yuan (major branches of the central government), and the president and vice president. In preparation for the establishment of this unit, Counselor Shen traveled to South Korea at the end of October to gain experience by observing how prosecutors there conduct anti-corruption activities.
WHOOPS! Oh wait! SORRY! That was 2006 (here). Let's try again from the Taipei Times.....
“After the Supreme Prosecutors’ Office Special Investigation Panel [SIP] revealed a serious scandal involving several Taiwan High Court judges, I decided to establish the nation’s first anti-corruption agency,” Ma told the ceremony.

The purpose of the AAC is to prevent corruption, because prevention should precede crackdowns, he said, adding that its creation should deter public servants from engaging in corrupt activities.

“As the agency investigates corruption cases, one precondition is that it must collect sufficient evidence [of corruption] before it makes an indictment [of a public servant],” Ma said, adding that this should increase the conviction rate.
A great idea, having sufficient evidence of corruption before indicting someone. Is Ma saying things were different when he was the Minister of Justice?

What he appears to mean, though, is that the SIP simply lost too many cases against DPP politicians....

Yes, it's looking like the rewind button, as the DPP noted after the commission was announced:
The Democratic Progressive Party (DPP) caucus yesterday said it feared the new agency could represent a “second wind for the SIP, which has become a tool for the current administration to carry out political oppression.”
It's not difficult to see what is going on. The Special Investigations Panel (SIP) has basically gone dead in the water. It is now being sued by 26 civic groups for its handling of the Chen Shui-bian case:
A group made up of 26 civic organizations yesterday sued the Supreme Prosecutors’ Office Special Investigation Panel (SIP), accusing it of forging documents, subornation of perjury and abuse of judicial power.

Led by Taiwanese National Party (TNP) Chairman Huang Hua (黃華), the groups filed the lawsuit with the Taipei District Court against the SIP, which they said cut a deal with former -Chinatrust -Financial Holding Co (中信金控) vice chairman Jeffrey Koo Jr (辜仲諒) to testify against former president Chen Shui-bian (陳水扁) in an attempt to imprison him.

Koo, who was involved in a scandal over Chinatrust’s bid for rival Mega Financial Holdings Co (兆豐金控) — known as the Red Fire Case (紅火案), after the name of the offshore company used to conduct the illegal transaction — returned to Taiwan in 2008 after evading an arrest warrant and hiding in Japan for two years.

The banker testified at the time that he had donated about NT$300 million (US$10.4 million) of his illegal profits to Chen, currently serving a 17-and-a-half-year term for corruption and money laundering, as a kickback.

Koo’s lawyers told the Taiwan High Court in May that Koo did not remit the money to Chen, adding that he testified out of fear of being detained upon his return to Taiwan.
I blogged on that testimony a little while back (a good post, if I do say so myself). The prosecutions against the DPPers mostly ran aground -- Yunlin County Chief Su Chih-fen was found innocent, the embezzlement charges against Chen Shui-bian were laughed out of court, and now the Koo family has testified that their testimony in the conviction of Chen for taking bribes from them was extorted by the prosecutors. The Special Investigation Panel was also behind the laughable investigation into Su Tseng-chang for allegedly running off with 36,000 documents from the government files.

In other words, the SIP has basically become a worn out tool that couldn't get the job done, so it looks like the KMT is now going to add another unit to go after "corruption" in the government which of course was the task of the SIP.

The Taipei Times ripped this move this week, arguing that: "In all likelihood, the AAC will become the AADPPC, or the Agency Against DPP Corruption, especially in the lead-up to January’s presidential election." More tellingly, they identified the Administration's real attitude on "corruption":
Just how determined is the Ma government to stamp out corruption? Recent moves regarding the rampant and ongoing practice of vote buying are telling. From December 2008 to May last year, 26 local officials belonging to the KMT were indicted around the nation for vote buying. How did the government reward Hsin Tai-chao (邢泰釗), the chief prosecutor at the Kaohsiung District Prosecutors’ Office, who is credited with being Taiwan’s leading prosecutor against the practice of vote buying? He was transferred to Kinmen Island. That shows real determination.
Today the DPP complained that Ma had appointed two biased individuals to head up the new AAC, confirming the worst fears of the pro-Taiwan opposition. In some one-party states I know, slander is the tool. In Taiwan, it is looking like accusations of corruption are the charge de jour.

However, the new AAC will have to move fast if it is going to affect the elections -- they are just six months away....

This is a twofold pattern -- first the typical pattern of authoritarian inefficiency, in which overlapping bodies are created to carry out identical tasks, partly because of Authority's dissatisfaction with the original and partly to keep everyone divided and competing against each other for the approval of Authority. Instead of reforming and strengthening the SIP, which is what should be done....

The other pattern is the formation of bodies to carry out tasks of political control when the original ones fail to please their masters. A good example of this pattern is the creation of the National Communications Commission (NCC) in 2006. The tasks it was charged with were already being carried out by the telecoms bureau and the Government Information Office (GIO). However, that was during the Chen Administration and those organizations were not sufficiently servile towards the KMT even though, even under the Chen Administration, the rank and file were predominantly pro-Blue bureaucrats. Hence the KMT-controlled legislature went ahead and created the NCC under its control to shape the media's presentation of politics....(from this old post):
The irony of the move against the NCC is that the NCC was created under the Chen Administration in 2006 by the KMT controlled legislature to bring mass media under the control of the government. The Executive Branch, then controlled by the DPP, argued that it should have the authority to appoint NCC commission members, but the legislature clearly intended that it would have the last word on who the commission members were. Since the legislature was controlled by the KMT and its allies, the intent of the law was obvious: it was a legislative end-run around the DPP controlled executive branch intended to restore KMT control over the media and chill pro-Taiwan speech by centralizing control of the media oversight in KMT hands.
As a commentator in the Taipei Times observed, even the utterly pro-KMT NCC was still too independent. And now the SIP, a recent invention, is being marginalized by a new body. How long before that one is tossed by the way side?

ADDED: A friend reminds me that "Mr Clean", Chen Ding-nan, who was Chen Shui-bian's first minister of justice, pushed for the establishment of an independent anti-corruption commission along the lines of Hong Kong`s ICAC almost as soon as he got into office. This proposal (raised in various forms by various DPP premiers) was of course totally boycotted by the KMT.
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Friday, July 22, 2011

CONFERENCE: Small Islands, Big Issues: Ireland and Taiwan in Comparative Perspective

Just as long as they don't compare the beers.....

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Title: Small Islands, Big Issues: Ireland and Taiwan in Comparative Perspective
Location: University College Dublin
Dates: 1-4 September 2011

Principal organizers: Dr Brian Jackson (UCD John Hume Institute for Global Irish Studies), Rev John Scott (LSE Taiwan Research Programme) and Dr Fang-Long Shih (LSE Taiwan Research Programme)

Full details, including speakers and abstracts, can be found on the conference website. Booking details for attendees will be available from next week:

http://www.irelandtaiwanproject.net/

This is the first ever conference on Ireland and Taiwan, and it will break new ground in mutual understanding between the two locations. Both are small islands adjacent to powerful neighbours with which they have had complex histories. In both locations we can see histories, politics, and cultures marked by contested subjectivities and identities, as well as struggles over democracy and human rights. A focus on the human situation in both places invites the application of discursive categories such as colonialism and post-colonialism; globalization and localization; and nationalism and hybridity. It also invites explorations of the goals, problems, and limits of sovereignty and independence in the context of sub-ethnic and religious divisions, as well as of the complex relations with a nearby metropolitan "other" and of diaspora experiences in the era of post-national globalization. At the same time both contexts resist the straightforward appropriation of such categories and demand their sophisticated reworking. This is the rationale for the conference.


There are 11 panels planned, and around 32 scholars are planning to participate (currently 9 from the UK mainland, 10 from Taiwan, 8 from Ireland, 2 from the USA, 1 from China, 1 from Hong Kong, and 1 from Northern Ireland). A number of particularly distinguished scholars will be involved.


We hope to see you there.


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Polli Sigh for the KMT

Dasi, an old trading post on the Dahan River, retains an old Taiwan feel. There are many stores with long histories in the town.

Global Views Survey Research Center with a couple of things out this week that make Ma look less than impressive. First, the satisfaction survey. Ma's approval rating is down to 32%; the negative evaluation stands at 55%. My own theory is that there is a sort of baseline approval for Presidents here that hovers around 30% to which the polls return unless something major is going on.

The legislature also has low evaluations but the public will return them all anyway. I'd love to see those figures for Ma broken out by voter type (KMT voter, DPP voter, independent).

The same center's poll has Ma and Tsai neck and neck at 37.3 vs 37.2, respectively, for 2012. Lots of undecideds. The Taipei Times has an article on it today:
A total of 73.8 percent said they had no knowledge of Tsai’s cross-strait policies, while 52.5 percent agreed that the DPP should adopt a more open policy toward cross-strait affairs.

The poll was conducted with a sample base of 1,229 voters, with a margin of error of 2.8 percent and a confidence level of 95 percent.

Ma’s campaign office spokesperson Lee Chia-fei (李佳霏) said the Ma camp would take all poll results into reference, adding that the administration would continue to focus on giving the public a solid performance.

DPP spokesperson Chen Chi-mai (陳其邁) said the recent indictment of former president Lee Teng-hui (李登輝) could have also contributed to the results of the poll, adding that there was growing public recognition of a political witch hunt against Lee Teng-hui.

Chen added that he believed Tsai’s election prospects would continue to rise, as support for the KMT in central and southern Taiwan weakens.

Speaking on the party’s internal surveys, DPP poll director Chen Chun-lin (陳俊麟) said: “We have also noticed a similar trend in Ma’s support ratings, which are especially pronounced in Taiwan’s central and southern farming districts.”
The question about Ma's views on the future of Taiwan drew some interesting answers -- 5.3% thought he supported independence, while only 33.6% thought he supported annexation. Weird.
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DPP Nuclear Power Policy Paper

Spent this week in Dasi. The town still has many buildings from the 1920s and 30s lying around; here is the facade from one. The stylized lions are really great.

Here is a short policy paper the DPP sent around outlining their Nuke-free Homeland Policy. Hope they realize the coal and oil plants will also all have to go over the next decade or so as well.

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2025 Nuclear Free Homeland Initiative
Democratic Progressive Party of Taiwan
Policy Paper 2011

What is the "2025 Nuclear-Free Homeland Initiative"?
The "2025 Nuclear-Free Homeland Initiative" aims to decommission the First, Second and Third Nuclear Power Plant in Taiwan and to prevent the commercial operation of the Fourth Nuclear Power Plant. Taiwan will be able to reach its goal of obviating the need for nuclear energy by using other alternative energy sources, improving the power generation efficiency, energy conservation, industrial restructuring, and the liberalization of the electricity industry.

Why 2025?
It’s difficult to give up nuclear energy immediately since it requires the consensus of the whole society. 2025 is the deadline for decommissioning the Third Nuclear Power Plant, but Taiwan has to strive to change the power structure so as to stop using nuclear power by 2025.

How could Taiwan replace nuclear power?
(A) Increase the proportion of renewable energy: the DPP’s initiative calls for increasing renewable energy by about 6.5% of total electricity generation by 2025.
(B) Improve the efficiency of thermal power: In addition to increasing power generation efficiency, invest in thermal power plants in order to reduce the amount of carbon emissions.
(C) Construction of natural gas power plants as priority because natural gas is a cleaner energy, and future power plants should give priority to using natural gas.

What are other methods to reduce power consumption in the long-term?
(A) Energy Conservation: the Government can encourage people to use energy-saving products.
(B) Adjust industrial structure: instead of just focusing on economic growth, we should encourage green policies among energy-intensive industries.
(C) Liberalization of the electricity industry: the government should liberalize the electricity market, which not only alters the issue of Tai-Power’s monopoly, but it also encourages the development of the renewable energy industry

Why should Taiwan completely give up using nuclear power?
Of all the world's 564 nuclear power plants in operation, six of them have experienced accidents, and the probability of more accidents is approximately more than 1%. Japan and Taiwan are both in earthquake-prone areas. For this reason, what happened in Fukushima may also occur in Taiwan. If a severe damage happens in one of the three nuclear power plants near Taipei, tens of millions of people will have to be evacuated, which is a plan that cannot be implemented. Also, it may result in the paralysis of state capital. The cost of shutting down the government and rebuilding the damaged area and the risk of trade and economic loss is too high a price to pay for Taiwan.

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Wednesday, July 20, 2011

Short Links For Wed

Way to busy to write a blog post today. So some links for your perusal:

FOR AMUSEMENT ONLY: What is with Brookings lately? Another strange piece, this one from an NCCU person on cross-strait relations. A few observations in it are dead on, but..... My favorite sentence is the reference to the "present euphoria" with regard to cross-strait relations.

WHOA: Senators Webb and McCain warn China on the South China Sea. Webb recently said that the US will soon face "a Munich moment."

D'OH 1: Taiwan falling behind China in cross-strait military balance.

D'OH 2: Beijing Kitty Hawks (hereCanadian politician attempting to suck up to CCP by J Michael Cole.

TRES INTERESTING: How Japan is leveraging Taiwan expertise and firms to enter China market. The Diplomat explains why China wants the whole South China Sea. The superb James Holmes on Sen. Webb's Munich Moment remark.
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Tuesday, July 19, 2011

Soong of Ice and Fire

There are no men like me. There's only me.

Like Lazarus beckoned from his tomb, People First Party (PFP) Chairman and former KMT heavyweight James Soong has risen from the political dead. Despite being defeated for president in 2000, for Veep in 2004, and buried in 2006 for Taipei mayor,  merely by combining the words "President" and "me" in the same sentence, Soong has performed Cardio-Presidential Resuscitation on himself.

First came the untrammeled joy in the pro-Taiwan camp. The Taipei Times reported with barely restrained glee on the will-o-wisp of Soong running as an independent presidential candidate.
Concerns mounted yesterday about an emerging rift in the pan-blue camp amid speculation that People First Party (PFP) Chairman James Soong (宋楚瑜) could run for election in January.

Facing a tough battle next year, some members of the Chinese Nationalist Party (KMT) fear Soong’s entry on a separate ballot would take votes away from the party’s legislative candidates.

Soong, who came within 320,000 votes of winning the presidency in 2000, has refused to say whether he would run next year as a district or at-large legislator, but PFP officials have confirmed that the idea is being considered.
Soong's party, the PFP, has been making noises about running its own slate of legislative candidates against the KMT in heavily pro-KMT districts. This might actually hurt the KMT, maybe even more so than a Soong run for the Presidency -- he's nearly 70, got clobbered in the last election he ran in, and his party is an afterthought to the KMT among the pan-Blues. Can't even say "the pro-China side", as the PFP appears to follow the Han Solo Creed: Look, I ain't in this for your revolution, and I'm not in it for you, Princess.... In the city council election last year, of 314 city council seats at play in the five major municipalities, the PFP won a whopping.....four. That is not the sign of a surging political banner....

That canny politician former President Lee Teng-hui even fanned the flames of the Soong Revival, saying that Soong was qualified to pursue a higher position in politics than legislator. Soong has been playing coy, saying he is considering running for President....or maybe just legislator in Hualien. Hualien has been sturdily pan-Blue since the Deluge; the current County Chief, Fu Kun-chi, is an ardent pan-Blue even though he is technically independent since for some corruption thing he had to leave the KMT and run against the KMT candidate in the last election [yawn]. Fu also came out this week in support of a Soong run for local legislator, saying he did not want to see a split in the pan-Blue side.

Soong is obviously seeking some kind of leverage for something he wants -- a run in Hualien would be a guaranteed pan-Blue seat, so Soong would get elected if there was no competition from the KMT. Yet it is difficult to see him actually getting that seat for promising not to do something -- once he publicly announced he wasn't running for president, his leverage would disappear, and the KMT might still play hardball and run a candidate against him in Hualien, removing him forever from political circulation if Soong is defeated.

Nor would his PFP candidates pack their tents if he ordered; they need those legislator positions to feed and water their patronage networks. If Soong wants to keep the PFP viable, this election has to be taken seriously by the PFP; the KMT has nearly iced the party, reclaiming its politicians or cannibalizing its seats.

Ma and Soong are often said to detest each other and it is easy to fantasize about him running just to spite Ma -- yes, that's right, spending millions of dollars and gallivanting around Taiwan for six months just to be a thorn in Ma's side. Sorry. Can't see that.

Nope, if Soong doesn't get something important out this and then doesn't run for President, no one will ever take the talk of a Soong presidential run seriously again. This. is. it.

Hard to say at the moment, but I am going to go out on a limb here and argue that Soong is trying to gain leverage to keep the PFP alive in the legislative elections. Simply by combining "president" and "me" in the same sentence Soong has riveted the attention of both the pan-Blue and pan-Green camps (thankfully diverting everyone from the unseemly sight of two DPP politicians at each other's throats over allegations of sexual misbehavior). He has also gotten plenty of free PR from Taiwan's Golden Retriever media, always eager for a new story. Smart move by a politician whose name is often paired with the word "canny".....
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Monday, July 18, 2011

Daily Links, July 18, 2011

Jul_random17
What's being harvested on the blogs out there?

BLOGS:


MEDIA:


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Book Review: Bradt Travel Guide, Taiwan

Taiwan
Bradt Travel Guide
by Steven Crook
344 pages
www.bradtguides.com

Steven sent me this book for review a few months ago, and I set it aside to use on my trip to Pingtung in March and April so that I could test it under genuine travel conditions. I am happy to report that it passed beautifully: it's useful, informative, beautiful, and comprehensive, an excellent companion for anywhere in Taiwan.

The book is well organized. It is divided into two major sections, one an overall guide to Taiwan's history, culture, food, religion, and similar. This section also provides basic travel information, and suggests itineraries and budgets. The discussion of Taiwan's history and culture is well-balanced and properly nuanced; the information provided in the travel section is comprehensive and useful. It is aimed at travelers in the brackets above the budget travel that the Lonely Planet guides are focused on. Thus, it seldom lists the myriad el cheapo flophouses available all over the island, but instead lists places to stay that have some unique feature to recommend them, such as a good view or interesting architecture. For example, in Kenting it lists the Chateau Beach Resort, Mykonos, Bossa Nova, and Moon Shy Boutique Lodge, among others.

The sections devoted to individual towns and regions do a good job of including anything an outsider might reasonably want to visit, mostly major tourist spots. For example, for Keelung it points visitors to the Miakow Night Market, the Qingan and Dianji Temples, the French cemetary, and Heping Island. Around Keelung it sends you to Jinguashi, the Gold Ecological Park, and Jiufen. It also gives a good rundown on Keelung's history, including its mini-civil war in the 19th century between rival immigrant groups and its long interaction with outsiders that make Keelung such an interesting place to hang out, hike, and photograph.

Similarly, the section on Tainan not only offers a rich view of history, but concise and informative descriptions of its many historical sites, divided by period: Han settlement, Koxinga, and Japanese. The guide gives information in English and pinyin (with tone marks which I have omitted) so the non-Chinese reader can at least take a stab at the placenames. A typical entry:
Wind God Temple (Fengshen Miao) (8 Lane, 143 Minquan Rd, Sec 3, 0700-2100 daily) This is the only temple devoted to the wind god in Taiwan, which is perhaps surprising given the frequency of typhoons. The Wind God is believed to have influence over all the give elements: earth, fire, metal, water and wood. Smaller icons depict the Thunder God, who holds a hammer in one hand and a nail in the other, and his wife the Lightning Mother, who carries a pair of circular mirrors. At the time of the temple's founding in 1739, the ocean was a stone's throw away (the walking maps posted on street corners show the old waterfront) and the Government Reception Archway (Jie Guanting) was where VIPs arriving from the mainland would disembark. Take a close look at this stone archway and you'll find carvings of dragons, lions, and sages.
Although all aspects of this book are outstanding, including its luscious color photography sections stuffed with gorgeous color imagery of Taiwan, but as a Taiwan history buff, I most enjoyed its rich and detailed presentation of local history. I highly recommend this useful and informative text; both first-time travelers and long-time expats will find this a rewarding addition to their library on Taiwan.
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Sunday, July 17, 2011

China's soft power hard at work

IMG_2182
A brilliant day in Miaoli today. Even the butterflies wanted to be photographed.

I've blogged on those disgusting intelligence and propaganda organs of the Chinese, the Confucius Institutes, several times before (most recently and in-depth). From Australia comes heartening news this week:
A petition with more than 4000 signatures tabled in the upper house of the NSW Parliament calls for the government to remove the Confucius Classroom Program from the schools where it operates: Chatswood Public, Fort Street High, Mosman High, Kensington Public, St Marys Senior High, Kingsgrove North High School and Coffs Harbour High.

The government has confirmed that controversial topics, including the Tiananmen Square massacre and China's human rights record, will not be discussed in the program, raising questions about China's influence over content.
The article also notes how little spending was necessary for China to reap propaganda and intelligence gains:
China pays NSW schools more than $200,000 to promote its language and culture through the Confucius Institute, based at the Education Department's Ryde office.
There's not much more you can say about this.
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Huffpost Completely Misrepresents Taiwan's Status and History

Huffington Post totally misrepresents Taiwan's status and history in a slide show of nations not recognized. Taiwan's status is tricky, but it is possible to get it right with a little research. Clearly that was too great a hurdle.
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Saturday, July 16, 2011

Lin Cho-shui analyzes LTH indictment


Lin Cho-shui, former DPP politician and current political commentator, sets out some of the problems with the Lee Teng-hui indictment:
All the evidence presented in Lee’s indictment is identical to that set out in the charges against former National Security Bureau (NSB) chief accountant Hsu Ping-chiang (徐炳強). Hsu was found not guilty, so there is no good reason to indict Lee on the same grounds.

Based on the principle of double jeopardy, the Code of Criminal Procedure (刑事訴訟法) states that a case in which a final judgement has been reached can only be retried if it meets certain conditions, such as the original evidence or testimony was false, new evidence has been discovered or the prosecutors, investigators or judges in the original case acted unlawfully or negligently. If these conditions are not met, the case cannot be brought to trial again.

This regulation exists to prevent malicious prosecutors from heaping endless litigation on a person. The principle of double jeopardy also preserves the order and stability of the legal system by ensuring that the courts do not get bogged down with frivolous cases.

The case against Lee is based on the same grounds as Hsu’s indictment. The evidence is the same and the conduct of the original prosecution and trial has not been found to have been in any way unlawful, so the case does not meet any of the conditions required for a retrial.
This is a long, ringing defense of Lee and a scathing denunciation of the prosecution and should be read in its entirety.  It has a problem that the Taipei Times editors should have spotted and removed:
It was correct to indict former president Chen Shui-bian (陳水扁) for instances of blatant corruption. It is true that the president’s state affairs fund is much larger than a mayor’s special allowance fund and that Chen and his family employed all sorts of means to misappropriate government money.
Chen Shui-bian was found innocent of misappropriating government funds -- the prosecutors lost the trial and then two appeals on the charge of embezzling the state affairs fund. It would be nice if Lin's antipathy to Chen was smacked down by the editors before it lands the Taipei Times in legal trouble.

ADDED: Maddog comments insightfully below:
Shorter Lin Cho-shui (林濁水): "Despite their history of 'crying wolf' with charges against DPP officials, Itotally believe all of the Chinese Nationalist Party's (KMT) charges against Chen Shui-bian (陳水扁)."
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F-16s? Now's the time

Jul_random51
This earth god shrine is on the Floo Network. Poor fellow got splinched....

In The Diplomat Matt Anderson of CSIS argues for the sale of F-16s to Taiwan:
The first difference is that the F-16 production line could be permanently shut down if no new orders are received by the end of this year. On the surface, it appears that this will prompt the typical reaction by the military industrial complex to push arms sales in order to boost revenues and save jobs. But this time things are different. After the F-16 production line closes, there will be no other similar US fighter jets to sell to Taiwan. And other foreign militaries are probably less likely to anger China with sales of their own planes. After the F-16, the only options that could address the problem would be even more capable planes, like the F-35. If Beijing strongly disapproves of the sale of F-16s to its renegade province, the sale of more advanced aircraft would likely evoke exponentially stronger protests from China.

Another difference is how the debate is coinciding with US electoral cycles. Arms sales to Taiwan have been a part of US presidential politics before. However, awareness of and potential resentment toward China has rarely been so heightened. China’s rise has increasingly taken the lead in US geopolitical calculations of both policymakers and average voters. The last mid-term election saw a trend toward anti-China pandering on the economic front, and, since that time, China’s image has plunged in the eyes of many Americans because of its perceived belligerence. The underdog story of Taiwan, with its liberal, democratic society, could become prominent in the foreign policy debates of the next presidential election if the arms sale debate is still simmering.

A final difference in the current situation is that Beijing and Washington have a rare convergence of interests in the next Taiwanese election. Both sides would prefer to see Ma Ying-jeou re-elected. But to secure victory, Ma will likely have to prove to Taiwanese voters that he isn’t selling out their hard-fought de facto sovereignty with his pro-mainland policies. Ma could help his re-election chances if he could show to the Taiwanese electorate that he’s still prepared to defend the island from any unilateral move toward reunification by the PLA. US arms sales could be a clear signal that Ma is steadfast in his intent to adequately provide for the defence of Taiwan. In the event he fails to secure what is perceived to be a needed arms sale, then more provocative actions or statements may be required to co-opt the Kuomintang’s pro-independence rivals and move Ma closer to the middle.
Aside from the pro-forma hacks on the pro-democracy crowd, which is Provocative®:, Anderson advances the argument that it would actually be better for stability to sell F-16s now than have to sell more advanced fighters later. The idea that Ma is going to become "provocative" if he doesn't get F-16s is laughable -- he need merely make noise in their favor, as he is doing now. But he really doesn't want the aircraft, and the Obama Administration really doesn't want to give them.

Further down he notes that the US public is less happy about China than it used to be, and US corporations, China's main constituency in the US, are also less enthused about China's mercilessly mercantile business environment. This means that the moment to sell F-16s has arrived.

This week Taiwan spokesman Philip Yang was in Washington to ask for the fighters. Yang's public calls for the sale should be read against Peter Lee's piece in the Asia Times which reveals much information about the little game Washington and Taipei are playing. Lee says:
The issue has become a Catch-22 for Taiwan, in which TECRO cannot submit an [Letter of Request] to AIT because [AIT] is under State Department orders to deny it, and then TECRO is told by the State Department that the LoR cannot be processed because it was not received, he said.
This is why we won't get those fighters despite an array of impressive arguments for the sale. But since we can't get the fighters, we should build more missiles, says this analyst in Foreign Policy.

Man, I was saying that in letters to the old Taiwan News 15 years ago. Good to see the rest of the world catching up.
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Thursday, July 14, 2011

Taiwan Market Share in China Dropping: ECFA effect?

Former Presidential advisor Huang Tien-lin argued in the Taipei Times the other day that ECFA has led to a drop in Taiwan's share of the China market because Taiwanese businesses are undertaking a new wave of movement to China in the wake of the liberalization of trade:
South Korea’s market share in China rose from 9.6 percent in 2001 to 9.9 percent last year. It is not a significant change, but the small rise shows that South Korea’s market share has approximated the growth in its trade with China during the past decade. On the other hand, Taiwan’s market share fell from 11.2 percent in 2001 to 10.6 percent in 2007 and 8.6 percent last year. The main drop occurred after President Ma Ying-jeou (馬英九) came to power and embarked on improving relations with China. The largest drop occurred after the ECFA took effect, from 8.6 percent last year to 7.5 percent in the first five months of this year.

So why is this happening?

The answer is simple: It is happening because Taiwan signed the ECFA. After liberalizing trade, the manufacture of products for the Chinese market has been moved to China, meaning that those goods are no longer imported from Taiwan. This trend has been accelerated by the recent ECFA-related relaxation of restrictions on Taiwan’s core high-tech industries.

If the ECFA, a framework supposed to connect Taiwan with China, is carried out in its entirety, a “center-periphery effect” — the attraction of a smaller market to a much larger market — will occur and production of semi-finished products and other Taiwanese products will move to the “center” — China — and Taiwanese businesses will grow roots there. Taiwanese exports to China would stagnate, before beginning to decrease. This implies that the items on the ECFA early-harvest list would be the only ones to have benefited from the agreement, while the harm caused by the ECFA on the overall economy would greatly outweigh the benefits.
Huang closes by noting, correctly, that the tourism surge from China is simply a way of making locals too besotted with money flows to notice their industries are slipping away and their living standards are falling.

If Huang's assertion is correct, what we should see is a dramatic rise in Taiwanese investment in China.  AFP reported in Dec 2010:
TAIWANESE companies have invested US$13.3 billion (S$17 billion) in China this year, up 119.8 per cent from the previous year, a report said on Friday.
However, remember that China's demand for imported goods has been rising for most of the first half of the year, which means that the South Korean share is a larger, faster growing share of a growing pie -- Taiwan's exports to China are not falling. But a problem here is that 2009 was a down year from 2008's economic crisis, meaning that the dramatic rise may merely be a resumption of trends extant prior to 2008 -- and Taiwan's investment in China was rising under Chen as well. A second issue is whether the trend reflects superior South Korean competition rather than Taiwanese industry moving to China. A third issue is the validity of the statistics -- China announced numbers for 2010 that were half Taiwan's, saying investment was only $6.7 billion. That same article reported that Taiwan firms invested in China saw a threefold rise since 2007 in reinvestments in Taiwan.

I would like to see more numbers that can clearly delineate this trend, whatever it may be. I wish Taipei Times commentators would use more numbers.....
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