Friday, August 31, 2012

Blue Moon Over Taiwan

Aug 31, 2012. Canon 550D, Tamron 18-200mm lens.

UPDATED: How perfect: this was my 5,000th post.
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Yuan Clearing MOU signed....

Dollar elbowed aside, reports the CNA:
The MOU, signed between the central banks of Taiwan and China, will pay the way to allow direct exchanges between the Taiwan dollar and the Chinese yuan, so that businessmen will no longer have to use the U.S. dollar as a medium for currency exchanges between the two sides, said Yeh Hui-te, deputy chairman of the All-China Federation of Taiwan Compatriots.

The banks "can help us save time and losses incurred from currency exchanges, so this is definitely a good thing," said Yeh.

However, some of the businessmen voiced concerns such as whether a daily currency exchange limit will be in place. In Hong Kong, the daily currency exchange ceiling is 20,000 Chinese yuan (US$3,139.80).

Taiwan's central bank governor, Perng Fai-nan, told reporters earlier in the day that the MOU is just a starting point for cross-strait currency settlement and that further negotiations will be required to iron out the details of the mechanism.

As for when Taiwan will begin to introduce yuan-denominated financial products, Perng said this will depend on how large the yuan market in Taiwan becomes and also on the types of products released by the banking industry.
One fork of China's Yuan strategy is clearly to reduce the role of the dollar. In simple terms, Bloomberg notes:
After the deal becomes effective in about two months, Taiwanese banks will be able to take yuan deposits and convert yuan into the New Taiwan dollar. The conversion will allow Taiwanese investors on the mainland to cut foreign exchange costs by skipping the current process of first converting their yuan earnings into U.S. dollars.
Another Bloomberg piece says....
China has been expanding its currency relations with trade partners to promote greater use of the yuan in global trade and investment. Nations including Singapore, Japan, and Thailand have signed similar deals with the world’s second-biggest economy as part of their efforts to reduce reliance on the dollar. Exports account for more than two-thirds of Taiwan’s economy and some 30 percent of shipments are bound for China.

“It’s a good development as there’s huge demand for yuan in Taiwan,” said Penny Chen, who helps oversee $160 million in yuan assets as a fund manager at Manulife Asset Management Co. in Taipei. “Taiwan’s exporters and small-to-medium enterprises will be able to reduce transaction costs.”
Taiwan meanwhile wants into the lucrative Yuan clearing business, a business also being pursued by London and other financial centers, and currently a big business in Hong Kong, business Taiwan wants to poach. Bloomberg also identified another factor in the deal:
Taiwan also hopes to attract wealthy Chinese to park their yuan funds on the island, said Norman Yin, professor of finance at Taiwan's National Chengchi University, noting that China has seen an increasing amount of capital outflow despite its foreign exchange control.

"Compared with Hong Kong, Taiwan has more advantage in the wealth management business because its transactions do not come under China's watchful eyes," Yin said.
Yes! We can take those corrupt Yuan gains and hold them as deposits outside China's control here in Taiwan. Wheee! And of course, a key beneficiary will be cross-strait organized crime, one of the major beneficiaries of cross-strait rapproachment, which will be able to repatriate its gains as Yuan holdings to Taiwan banks, as "foreign" cash holdings whose interest will be capital gains and thus, tax-free. Am I ever in the wrong business....

As the several articles note, this is only an MOU and the details need to be worked out. So all this celebration may come to nothing once everyone sits down with their own agenda....
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Wednesday, August 29, 2012


Just too busy today. Enjoy a few links...

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Tuesday, August 28, 2012

EPA Minister's Proposal Makes International Headlines

Diners in Changhua City.

Taiwan made headlines around the world again this week for President Ma's proposal on the islands dispute bike industry increasing shipments typhoon Tembin returning to smack us again EPA Minister Shen's proposal that men sit when they pee to preserve cleanliness in public restrooms. My own experience with public restrooms all over Asia has convinced me that Taiwan does extremely well in this regard. Considering that the EPA is pretty much useless for protecting the environment (for example and this beaut as well), at least it is something about the environment.... so much going on in Taiwan, but this appears in the international news....
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The Senkakus Irritant Redux

She came out into an alley in Changhua city to challenge me.

This little missive to the Washington Times shows how the KMT hopes to use the Senkakus to fire "nationalism" in Taiwan. Written by an advisor to the overseas compatriots commission, its history is bogus, but note how it deploys Taiwan and Taiwanese....
The Senkaku Islands lie less than 62 miles from Taiwan and it is a historical fact the Senkaku Islands constitutes an entity with Taiwan’s territory. The Taiwan government, on behalf of its Taiwanese people, claims ownership of the Senkaku Islands. Japan’s argument is not even worthy of refuting and Japan’s claim that its ownership is recognized by the United States is also shaky.
The article refers only once to the ROC. One of the standard moves of KMT political rhetoric is to conflate the ROC and Taiwan in order to harness Taiwanese feelings of "being Taiwanese" and identifying with Taiwan in the service of the ROC and its goals. The Administration is also trying to stoke anti-Japanese feeling in the finest traditions of Chinese nationalism -- good luck with that, Taiwanese are absolutely mad about things Japanese. Notice that in addition to responding with pro forma historical nonsense about who owns the Senkakus/Diaoyutai, the Ministry of Foreign Affairs also brought up the comfort women issue again this week.

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Sunday, August 26, 2012

Mayor Hau making a move for 2016?

Some interesting news about Mayor Hau of Taipei this week. First, Hau suggested that former President Chen Shui-bian, in ill health after being jailed for defeating the KMT in open elections after being convicted of corruption, be let out on medical parole. This astonishing burst of friendliness on Hau's part received the Chen family's thanks this week....
Former president Chen Shui-bian (陳水扁) yesterday expressed his thanks to Taipei Mayor Hau Lung-bin (郝龍斌) for his public endorsement of Chen’s medical parole request and applauded Hau for his courage and vision in raising the issue.

Chen’s son, Chen Chi-chung (陳致中), yesterday visited his father in prison and said the former president praised Hau for “possessing the character and manners of a national leader” by proposing to grant him medical parole.
... "the character and manners of a national leader." Some quid pro quo there from the President's son? Hau looked to be making a move for the 2016 presidential candidacy with the suggestion, courting pan-Green votes.

This week, after the typhoon blasted the south, Hau made another seemingly  Presidential move to court southern voters. Local news reported (China Times) that Hau had offered residents of Tawu township and Green Island in Taitung money to rebuild after the disaster, later increasing the offer to include Hengchun, Checheng, and other townships in Pingtung. In addition to spending $3000-5000 per household in the affected townships, Taipei city government had also sent $3000 each to 200 households in Hualien. The funds came from emergency funds held by the Taipei government. A spokesman denied that this outpouring came with the 2016 election in mind, and said that it would be offered to anyplace in Taiwan in similar trouble.

Looking at 2016? Hau is a scion of a powerful KMT figure: his father was the regressive right-winger Hau Pei-tsun, an architect and maintainer of Taiwan's notorious security state in the martial law era, and a longtime holdout against democratization. Hau himself served in the first Chen Shui-bian administration, and of course Taipei city mayor has long been considered the springboard to the presidency, since Chen, Ma, and Lee all held that position. Keep your eyes on the prize: the race for the 2016 KMT candidacy is wide open.
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Blast from the Past: 1976

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Some people get it, some don't

Hibiscus Flower, up close.

Weekly Standard book review... some people get it:
In a brilliant article in March’s China Heritage Quarterly, the Australian sinologue Geremie Barmé traces the history of written and spoken Chinese since the late 19th century and its submergence, since 1949, into the PRC’s officially sanctioned way of speaking and writing:

New China Newspeak was and is used by the Party, its propaganda organs, the media and educators to shape (and circumscribe) the way people express themselves in the public (and eventually private) sphere, and to enable the party-state apparatus to inculcate its ideology by means of relentless verbal/written imposition and repetition. .  .  . [I]t is also commonly employed in creating what I call “translated China,” that is the English-language Party langue that has evolved over many decades to present China to the outside world.
Barmé goes on to describe how, in the best Orwellian fashion, Beijing seeks to control not only what Chinese think and say about China, but what everyone else does, too.

Accordingly, we need to guard against what the late Fred Iklé called “semantic infiltration,” which starts with using the language of enemies and adversaries to define reality, and ends with accepting their definitions. America’s discussion of Taiwan—indeed, almost all the world’s discussion of it, not least that of the government of Taiwan itself—has been thoroughly infiltrated by New China Newspeak. For example, there is the term “reunification”—except that Taiwan has never been part of the People’s Republic of China, not even for an hour. There is the notion that, historically, Taiwan has been part of “China,” even though there was no political entity with the word “China” in it until 1912. (Before then, what we think of as “China,” and what we now call Taiwan, were both parts of the Qing Empire.) In fact, Taiwan was a part of the Japanese empire from 1895 until the end of World War II.
...and some just replicate Beijing's propaganda. From Foreign Affairs, where a hamster could get published provided it was sufficiently pro-Beijing, comes 'How China Sees America':
But widespread perceptions of China as an aggressive, expansionist power are off base. Although China's relative power has grown significantly in recent decades, the main tasks of Chinese foreign policy are defensive and have not changed much since the Cold War era: to blunt destabilizing influences from abroad, to avoid territorial losses, to reduce its neighbors' suspicions, and to sustain economic growth. What has changed in the past two decades is that China is now so deeply integrated into the world economic system that its internal and regional priorities have become part of a larger quest: to define a global role that serves Chinese interests but also wins acceptance from other powers.
"The main tasks of Chinese foreign policy are defensive". How could any thinking human write such tripe!?
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Friday, August 24, 2012

Typhoon Updates UPDATED X 3

Typhoon skies over Douliu this morning.

UPDATE 3: A reader was in Hengchun and sent in his pics of the typhoon on Flickr.

UPDATE 2: Saturday's Taipei Times article on Tembin flooding. Note that Tembin is still wandering the east coast.

FTV reports: 50,000 households without power, Hengchun, Pingtung area (Kenting) smacked by the typhoon (Video).

FTV reports: Fangliao in Southern Pingtung hard hit, Hengchun suffers biggest rainfall in 69 years. (Video)

On Facebook, Taitung Let's Go has a bunch of S Taiwan photos. Here are three, the first two of Hengchun town in Kenting, the third of Taitung city.

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True Crime: the Justin Lee case

While the rest of the world is riveted on the Senkakus, Taiwan has been riveted by the Justin Lee case.
Justin Lee (李宗瑞), who is wanted by prosecutors for allegedly raping a woman and filming bedroom trysts with a number of celebrities and models, turned himself in last night.


The case has attracted widespread attention after investigators said there could be more than 40 victims, including showbiz performers, models and A-list actresses.

The scandal sparked a media frenzy because Lee is the son of Lee Yueh-tsang (李岳蒼), a board member of Yuanta Financial Holding Co (元大金控). Lee Yueh-tsang on Monday last week resigned from the company, reportedly because of the scandal.
Media frenzy! Half of Taiwan's actresses, the lurid talk show hosts claim, are waiting in agony to see whether their images will surface. The alleged girlfriend of Lee, who allegedly was hiding him in Pingtung somewhere, according to many media reports, was also wanted for drug dealing. Daddy Lee, big board member, also had a passel of children by several women, the media has reported in its best moralizing style. The media has also had fun questioning women about their relationships with him. News videos with animation here and here.

Videos of celebrities, surfacing. Surfacing how? Somebody needs to pursue the strange phenomenon of material that should be part of the investigation being made available to the public in case after case.

More tawdry: a senior police official busted in bribe case.
The prosecutors said that they were tipped off earlier this year that operators of an illegal casino, which usually moved venues between Zhongshan District in Taipei City and Sanchong District in New Taipei City, had regularly wined and dined law enforcement officers in the precincts and paid them bribes in exchange for covering up their illegal activities.

During the investigation of the bribe-taking case, while tapping the phone of a CIB police official surnamed Huang, who allegedly took bribes, the prosecutors were surprised to discover that Huang had duly reported back to his superior, i.e, Hsu Jui-shan, chief secretary of the CIB.

Hsu, who has been part of the police force for over 20 years, rose from the ranks. He has been regarded as a rising star, so his involvement in the scandal took many people by surprise.
Cases like this, so common, show, as if further demonstration were needed, the intimate links between local police and major organized crime operations. Hsu was even the head of the cross-strait crime-fighing unit..... if only the media had frenzies over this kind of system corruption...
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Book Review: A Foreigner's Travel Guide To Taiwan's Indigenous Areas: Central and Southern Taiwan, by Cheryl Robbins

A Foreigner's Travel Guide To Taiwan's Indigenous Areas: Central and Southern Taiwan
Cheryl Robbins
211 pages

Cheryl Robbins gave me a copy of this volume, the latest in her series of books on travel in Taiwan's indigenous areas. It looks extremely useful. Written in clear, accessible English and chock full of maps, photos, and cultural and historical information, this book has a special bonus: it is a bilingual text, written in both Chinese and English.

Robbins is a longtime expatriate on the island. She has a passion for local indigenous culture and a deep knowledge and love of Taiwan's mountains and the peoples who call them home. For several years she has operated Tribe-Asia, a social business project specializing in local indigenous art and handicrafts. Using her extensive network of contacts within local indigenous communities, Robbins, a locally licensed guide, is currently putting together a set of travel packages for tours in indigenous communities in conjunction with a local travel agency. I look forward to traveling with her early next year when everything comes together. This book is an outgrowth of her rich experience of local indigenous communities.

The book presents specific locations and their interesting aspects, such as monuments, trails, foods, museums, artist workshops, and so forth. Navigation is presented in typical travel book style -- Getting There by bus or car, contact phone numbers and website links, clear maps, and similar. This book is focuses on supplying useful information in accessible formats. Local eateries are presenting in a friendly style:
This is a great place for a late, leisurely breakfast as it does not open until 9:30 a.m. Try a thick piece of toast with chocolate, ham and egg, tuna, butter, jam, or peanut butter (NT$20-55). There are also a range of coffees and teas available (NT.....
"Address boxes" set off addresses from the text making them easy to find. Text boxes present historical discussions or descriptions of things such as local artists or cultural artifacts.

A especially appealing aspect of this book is the photographs. Far from the usual useless manner of travel books that put 16 color plates in the center of the book which are gorgeous but unreal and nowhere near the pages that discuss them, most of the photos were taken by Robbins herself with a simple point-and-shoot camera. These photos present the experience as the traveler herself might encounter it, right where it is being discussed, a useful and practical perspective. They enhance the text by giving it an appealing reality.

This book will be an extremely useful introduction for travelers who are interested in a deeper experience of the island of Taiwan and its peoples. It lacks only one thing: bike routes! Next edition?
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Economic Slump, Government Reaction

Falungongers in Douliu in the town center performing exercises

In case you were wondering, while there may be rain somewhere [UPDATE: Kenting is getting pounded], most of Taiwan is having a pleasant, cool day, apparently. The typhoon appears to have wandered off to the south of Taiwan. Meanwhile, the economy continues to have a pronounced limp....

Keith Bradsher at NYT reports:
The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.

The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government — all part of an effort to prop up confidence in the economy among business managers and investors.
....and the Taipei Times reports...
The unemployment rate — a lagging indicator of economic performance — climbed for the third consecutive month to 4.31 percent last month, from 4.21 percent in June, the agency said in its monthly report.
Real wages fell a whopping 1.68% year on year, according to the report, as rising unemployment is putting downward pressure on wages. The rising inventories in China means that companies there will attempt to export more, putting downward pressure on prices and probably impacting East Asia's other exporters, including Taiwan. Economic growth forecasts from the various think tanks and investment houses are mostly clustering below 2% this year.

The government claims that next year's budget is an economic development budget....LOLz. (TT report)
The proposed budget allotment for economic development projects was set at NT$272.6 billion (US$9.1 billion), an increase of 1.6 percent, or NT$4.4 billion, compared with this year.

That would account for 14 percent of total government spending of NT$1.9446 trillion for next year. The additional NT$4.4 billion is to be used in the construction of railways, mass rapid transit systems, and agricultural and farm village development projects, the proposal showed.

“The problem of economic adversity was of most concern when we wrote the budget,” Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Shih Su-mei (石素梅) told a press conference after the meeting.

Compared with this year’s budget, the Cabinet proposed cuts in expenditures for defense; education, science and culture; community development and environmental protection programs; and debt repayment items, except for expenses in economy and statutory spending in social welfare programs, retirement pensions, and general fund subsidies for local governments.


What we focused on for next year was mainly to enlarge the budget for public construction projects to stimulate economic growth,” Shih said.

For economic development, the government has earmarked NT$191.2 billlion in public construction projects, an increase of NT$6.1 billion, or 3.3 percent, compared with this year, the proposal showed.

However, if expenditures from special budgets and state-owned enterprises’ budgets were included, the total budget for public construction projects next year would be NT$379.1 billion, a decrease of NT$19.4 billion compared with this year, mainly due to the completion of a project by state-owned oil refiner CPC Corp, Taiwan (CPC, 台灣中油) at the end of this year, Shih said.
Note what is not getting cut -- direct payments to voters, subsidies to local governments (read: patronage networks) and the focus is on public construction (read: patronage networks). Defense, which still has not reached Ma's promised 3% of GDP, is being cut. There is apparently no real stimulus in this budget, instead it looks like a pretty typical KMT budget, relying on infrastructure spending to keep the economy going.. The next big round of local elections is in 2014, meaning that the KMT could well take a beating if the Administration displays the same indifference to Taiwan's general economic welfare and the same mindless, cargo cult obsession with China as it did in the first Ma Administration.
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Thursday, August 23, 2012

Typhoon on the way

Typhoon tomorrow, everything is closin... so I'll be blogging like crazy with all the free time. In the meantime see if you recognize this Old Street in the town where I am trapped tonight....[It's Douliu]
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Wednesday, August 22, 2012

The Paradox of Ranks and scores in Taiwan

Here's a culture that's obsessed with ranks and scoring. Companies proudly display awards. Bushibans advertize student scores. Schools rate professors based on publications in prestigious journals with high impact factors. A nation awaits, eagerly, for the latest rankings in competitiveness, math education, and a thousand and one other topics.

Here is a culture where scores and ranks are so often assigned, not on merit, but are handed out based on seniority. Or arbitrary quotas unrelated to performance. Or teachers are told to have all grades averaged out to 80, or no scores over 90 will be given. Or scores and awards are rotated among individuals and departments, so that they have no meaning. Or awards are bought, not earned in any way.

Reconcile, please.
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Monday, August 20, 2012

Senkaku Irritation Level Rises

Good lord. I leave for a few days and all hell breaks loose in the Senkaku Islands.

The story of this mess is quickly told. A group of right-wing Chinese actually managed to land on the Senkakus despite Japanese obstruction and plant PRC and ROC flags there. Officials of the administration of President Ma Ying-jeou -- you remember him, the pragmatic one (O what romantic tales were told in the golden naivete of our youth) -- spoke approvingly of the appearance of the ROC flag on the Senkakus. Japanese rightists, not to be outdone, immediately riposted with their own flag....
About a dozen members of the right-wing group Gambare Nippon (“Hang In There, Japan”) swam ashore, an Agence France-Presse (AFP) journalist witnessed, from a 20-boat flotilla carrying activists and lawmakers.

The landing comes just days after Tokyo deported pro-Beijing protesters who had landed on the island, part of a chain administered by Japan, but claimed by China, which had warned against acts “harming” its territorial sovereignty.
Next -- I'm not making this up -- the Taiwan government summoned the Japan ambassador to protest this incident of Japanese landing on a Japanese island. The ROC claims it owns the Senkakus, a manufactured claim coined in the early 1970s, like the PRCs, after Japanese scientists announced the potential for oil in the seabed below. Prior to that time, as anyone can find out for themselves, neither Chinese government had considered the Senkakus to be Chinese. Since 1895, when Japan first grabbed them.

Aside: hopefully this Senkakus-are-ours nonsense behavior will forever put a stake in the zombie idea that the KMT and Ma Ying-jeou are "pragmatic." I've got a great idea! Let's call in the Japanese ambassador and upbraid him! Because that's just so fewking pragmatic! But you and I both know that reporters and commentators nattering about KMT pragmatism will continue to write as if the Senkakus were an island group located on one of Jupiter's moons that demonstrated nothing about KMT behavior.

Back to the story. Anti-Japanese protests broke out in China (WSJ's excellent piece). The Ministry of Foreign Affairs recycled bogus arguments to claim Japan "stole" the Senkakus and said Japan was "furtively occupying" them.

Furtively occupying! Laugh if you may, but this represents a rise in the level of rhetoric....

I know by now your head is spinning and you are groping for whatever painkillers and alcohol are near at hand. So let's point out a few things....

The Deputy Minister of Foreign Affairs spoke approvingly of Chinese right-wingers putting the ROC flag on the Senkakus. TT reports:
“We thought that the appearance of the ROC national flag on the islands was in accordance with our sovereignty claims over the Diaoyutai Islands,” Deputy Minister of Foreign Affairs Tung Kuo-yu (董國猷) said.
As the Taipei Times pointed out, this skirts close to cooperation with China on the Senkaku claim, something the ROC government has said it would not do. This kind of behavior, especially coupled with the government's upgrading of its defenses on the islands it occupies in the South China Sea (a move one expert argues means that it will no longer put up with being ignored by the other claimants) also gives lie to Ma's 2008 promise -- O what romantic tales were told in the golden naivete of our youth -- that Taiwan would be a peacemaker not a troublemaker. You can look for that one in the memory hole too, next to the entry for pragmatism. It's a solid bet that no one in the international media will raise a peep about that.

Probably the least provocative thing the government has done is suggest an essay competition on the issue....

I'm not the only one who has noticed the government's apparent strategy here. I didn't have a chance to comment on it but Apple Daily ran a piece last week arguing that the government is using the Senkaku issue to irritate Taiwan-Japan relations. Yep. Recall that with the beef issue DOA, the Ma government was temporarily out of irritants to perturb its relations with the US. Making trouble in the Senkakus hits both nations at once....
  • US and Japan have a security treaty. If war breaks out over the Senkakus, the US is pledged to defend Japan and has placed the Senkakus under the umbrella of that treaty. Making trouble in the Senkakus dangles that possibility before US eyes. Remote, but there it is.
  • Flogging the Senkaku issue also dangles another appalling possibility before US eyes: that of Taiwan-China cooperation on political and military issues, especially related to Chinese territorial expansion. Of course there is no public support for such actions in Taiwan and the chance of such cooperation is remote, but whether Washington will understand that in an election year when attention spans are narrowing drastically as the election looms is another question
  • It is obvious that kvetching at Japan over the Senkakus irritates Taiwan-Japan relations. Wasn't it especially pettily delightful to summon the Japanese Ambassador? How they must have enjoyed that, like small children furtively knocking over someone else's sand castle on the beach.
In the short term it is likely that this will blow over, as it did a couple of years ago when a Chinese "fishing boat" skipper rammed a Japanese ship in the area. However, with China expanding its military and Japan determined to defend its sovereignty over the Senkakus, the long-term prognosis doesn't look good.

MEDIA NOTE: The international media is studiously avoiding commenting on the history of the dispute. This creates a false balance between Tokyo and Beijing that, by omitting the spuriousness of China's territorial claim, actually serves Beijing by giving its claim the same weight as Japan's....
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Gorge-ous Riding on the East Coast: Hualien 64

This weekend my friends Kenji and Jeff, trailed by my slow but steady self, did a wonderful little loop out of Hualien. Leaving Hualien on Saturday morning, we rode down to the fishing port of Shiti and had lunch. After lunch we spun around the little headland to the Great Red Bridge and just before the bridge, got on Hualien 64, the Ruigang Rd. We took that to Rueisuei, and overnighted. On Sunday morning, with glorious weather, we sped back to Hualien and picked up the 1:03 express home to points north and west. Click on READ MORE for the rest of this gorgeous journey....

Wednesday, August 15, 2012

Investment Pact Protects Who?

AP writes on the investment pact signed Thursday...
The pact, which took two years to negotiate, offers investors from the two sides formal channels for dispute arbitration, while falling short of a Taiwanese demand that arbitration take place under international oversight. It is the 17th economic agreement between the sides since China-friendly President Ma Ying-jeou took office in Taipei in May 2008.


....But with this year's growth rate predicted to come in at less than 2 percent, broader tariff cutting and other trade promotion measures appear to have fallen short of Ma's promise that closer China ties would energize the Taiwan economy. The trade-reliant island is suffering from sagging demand for its trademark high-tech exports.

Chinese investment in Taiwan amounts to only about $300 million, far short of the more than $120 billion Taiwanese have invested in the mainland over the past 30 years. While the new pact could spur more Chinese investment in Taiwan, some restrictions aimed at preventing China's economic domination of the island remain in place.

Taiwan's opposition claims the new pact, like many of its predecessors, is helping to clear the way for increased Chinese economic influence on Taiwan, and setting the stage for an eventual Chinese political takeover of the island. That has been the ultimate goal of Beijing's Taiwan policy since the two sides split amid civil war in 1949.


But opponents point to Taiwan's continuing poor economic performance — its predicted 2012 GDP growth rate would make it one of Asia's most conspicuous economic laggards — as proof that Ma's highly vaunted China connection has failed to deliver the goods, and say the island needs greater balance in its trade ties.
No kidding.... not just the 2012 growth rate, but the economy hasn't gotten much help at all from China, certainly not like the golden days of CSB's latter years. With his usual mediocre luck, Ma seems to have both missed the best years of the China boom while getting hit by the Euro-American slump. Thus Taiwan's trade with China, Europe, and the US is all falling year on year, while with ASEAN Taiwan runs a trade surplus and trade volume is rising. Remember when Ma claimed we had to have ECFA in order to save our economy? We have ECFA, and growth is running 3-5% below what it was in the latter years of the CSB administration. This investment pact is years too late.

Another issue the paper raises is investment from China to Taiwan. It's easy to look at that only in the context of China-Taiwan relations and blame, as the AP report does, investment restrictions. But I pointed out a couple of years ago when ECFA was still being "debated" that restricting FDI in its trade partners is a longterm policy of Beijing's:
The trade and foreign direct investment (FDI) figures are not encouraging either. Since 2004, tariffs between the two sides have been coming down, and Asean's trade deficit with China has widened. From 2000 to 2008, China-Asean trade grew sixfold to US$198 billion (S$280 billion). But Asean's trade deficit also widened five times to US$21.6 billion. Asean's cumulative FDI in China was US$52 billion in 2008. By comparison, China's FDI in Asean was just US$2.8 billion.
Total Chinese FDI in ASEAN is now over $10 billion. The FDI situation is complex because "Chinese" FDI can be many things:
China’s share may be higher than official home and host country data show as the example of Vietnam illustrates. As large amounts of Vietnamese FDI inflows originate from Hong Kong and the British Virgin Islands, Frost (2005) suspects significant further amounts of Chinese capital to be routed to Vietnam via these and other offshore financial centres. On the other hand, there are also reasons to assume that China’s share is overestimated in some host countries. During the field research in Cambodia and Vietnam we found that a number of companies that were identified and registered as mainland Chinese were in fact owned by a parent company from Hong Kong, Macao, or Taiwan. In some cases, these parent companies were established in mainland China and later moved to Hong Kong for reasons like taxes, logistics, or proximity to clients. In other cases, however, companies originated from Hong Kong or Taiwan and were incorrectly registered as mainland Chinese.
Recall also that in the glory days of the early 2000s when massive foreign investment in China was being touted, much of that "foreign" investment was Chinese money recycled through global offshore financial centers and reinvested as "foreign" investment in order take advantage of FDI investment benefits.

What about Korea? Well...(Asiaone):
South Korean statistics showed China's investment in its neighbor was US$3 billion last year, and was mainly in the tourism and entertainment industries. South Korean investment in China reached US$36 billion (S$45 billion) in 2011.
China has invested a lot more in South Korea, yet the same lopsided investment pattern shows up -- S Korea invests twelve times more in China than China does in South Korea. (Actually, if anything could motivate Taiwan to sell itself to China via FDI, it's the knowledge that China sends more FDI to Korea....ZOIKS! The Koreans are kicking our ass!)

So, looking at the overall Chinese investment situation in Taiwan and China's investments in other nearby small economies, it is hardly surprising investment in Taiwan is so low. After all, it's not like we have a booming economy here, with growth probably going to come in under 1% this year and inflation on the march, and it's not like China sends large allotments of funds overseas to nearby economies.

Two other points need to made. First, FDI in Taiwan must satisfy Beijing's political goals. This places an additional constraint on such FDI. Second, FDI in Taiwan, which ostensibly helps Taiwan's economy, actually conflicts with Beijing's longterm goal of hollowing out the island's economy and stealing its technology. Given the current economic growth in China and the cross-strait political situation, why should China want to invest in Taiwan unless furthers its political and technological goals?

This discussion of Chinese investment also hits on another issue: the housing boom here. Everyone talks about China's ghost cities and massive real estate boom. We're having an under-the-radar boom here in Taiwan -- it doesn't get any play in the global media, but here in Taichung building after building, estate after estate, new hotels, all going up in the best cargo cult style. Yet something like 40% of residences in Taichung are unoccupied and will probably never find buyers/renters. Think Chinese money will step in to prop up this bubble? LOL.

Finally, ETRC points out the obvious: Eighteen agreements in four years, what's next? What's next is obvious: the (open) political talks.
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Tuesday, August 14, 2012

What? No reduced F-16 request?

Riding on the bike path in Dongshih.

BREAKING: Just heard that President Ma wouldn't let the "activists" who were heading to the Senkakus with Hong Kongers aboard dock in Taiwan. News report on original plans. FocusTaiwan's report from earlier today saying the gov't had no information on any such boats, although the Coast Guard was going to accompany them. It also says Japanese lawmakers slated to visit the islands Sunday. Looking forward to the news reports tomorrow...

This was all over the news yesterday...Taiwan to request fewer F-16s
Local media reported Aug. 13 that Taiwan had renewed the call during the just-concluded “Monterey talks” in the U.S., the highest-level annual meeting between U.S. and Taiwanese military officers.

“But the number of desired F-16 C/Ds has fallen to 24, down from 66 when the Taiwanese delegates put forth the proposal,” the Taipei-based China Times quoted an “authoritative military source” as saying.
Suddenly the Defense Ministry is denying it discussed a smaller number of F-16s. Change the number, ask for different aircraft, it's all just yanking America's chain. Or perhaps the American side was planting stories, just to confuse the issue. Round and round we go. The KMT Administration doesn't want the F-16s, and the Americans don't want to sell them. For the moment....
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Monday, August 13, 2012

Daily Links, Mon, Aug 13, 2012

Lovely sunset in Taichung yesterday.

Enjoy some links and stuff.

SPECIALOne author's moving plea for a gentler Chinese nation. Yglesias has a good perspective on Romney's pick of Ryan.

VIDEO: Bloggingheads on South China Sea, US-China war, etc

TYPHOON: On the way this week.
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Saturday, August 11, 2012

Saturday night short shorts

I got a set of 3 Meike extension tubes (NT$2100) today. Fried tofu, up close.

Don't forget, tonight is the Perseid Meteor shower. It seems here in the Chung we are under clouds all night. In all my years here this has been the crappiest summer ever: cold, wet, and cloudy. I guess Taipei is getting revenge on us for enjoying good weather all those years....

I stumbled across this interesting post on religion in Taiwan. It has some good discussion of the way religious believers are counted in Taiwan -- did you ever hear of BAROC? -- and then talks about institutions:
Although Catholicism [天主教] is a minority religion in Taiwan, it is massively institutionalized: in 2011, Taiwan was home to 9 Catholic Hospitals, 7 Catholic Clinics, 16 Catholic Middle Schools, and 142 Catholic Kindergardens and Nursery Schools (exceeding the number of Buddhist institutions in every category mentioned; see the charts for some other examples). This type of institutional depth probably produces paperwork documenting the membership of a larger proportion of their followers. Religions, also, will vary as to their requirements for people to "enroll" to receive various rites of passage (and, again, the litigious nature of baptism, marriage, etc., in the Catholic tradition is a point of contrast).

The raw data for the number of religious institutions (shown here as eight pie-charts) can be misleading in many ways: there is no correlation between the number of institutions and their number of beneficiaries. 10 small schools may have fewer students than 1 large one, and so on for the number of patients in hospitals, or the number of homeless people assisted by a shelter. There are nevertheless a few interesting facts that seem to leap off of the page here. The focus of Catholicism on early childhood education is an interesting contrast to the emphasis that Taiwanese Daoism (apparently) places on retirement homes for the elderly, and "welfare foundations" (presumably for the poor?). The underwhelming performance of Buddhism in all categories is self-evident.
I got to wondering about the numbers. There are 6 Tzu Chi hospitals alone but I couldn't think of any other "Buddhist" hospitals in Taiwan. Then I got to thinking about how "religious hospital" is defined in a way that benefits Christianity here -- after all, many Chinese medicine clinics apply spiritual principles in their healing practices. So are we really looking at a performance of Buddhism that is underwhelming, or a performance of Buddhism that is so completely diffused that we can't see it?

Le Monde has a pretty good article on Taiwan's fading Chinese identity.... with a couple of nice quotes:
For Wu Chi-chung, professor in political science at the Soochow University in Taipei: "after every presidential election, the feeling of Taiwanese identity becomes stronger. It's as if the act of voting, even for a candidate of the Kuomintang (KMT; the party in power), pushes the Taiwanese people to feel even more Taiwanese." In the eyes of younger generations, Taiwanese democracy, which has been reinforced by five presidential elections, has contributed to creating a common identity.
The reality is that the "Chinese" identity that overlaid the identities of the locals was a faux creation of the KMT, just as fakey as its mock Ming architecture. It could never last because it was founded on nothing but political propaganda. But this quote above nicely illustrates how Taiwanese have incorporated democratic practices into their evolving local identity, how valuable democracy is. The real "Chinese" identity of Taiwanese -- languages, religious practice, arts, cooking -- these are alive and well and also evolving. Which is another reason the KMT "Chinese" identity faded -- determined by diktat, it contained neither potential nor provision for its own authentic evolution at the hands of the people.

The staidly Establishment TISR, the old social survey unit of Global Views, allegedly shut down after KMT pressure in the run-up to the 2012 presidential election when it reported that Tsai was leading Ma, reports that independence is the long-term goal of a majority, 55.4%. These numbers are probably too low....

FocusTaiwan has an article on a call from the European Chamber of Commerce for Taiwan to make itself more attractive to foreign investors. The ECCT had some good suggestions for the island to go low carbon...and then:
The ECCT also said that although Taiwan provides a standard of living, the availability of English and other foreign language channels on cable TV is very poor.

For example, James said the local cable TV company servicing Taipei's upscale Xinyi District, where he lives, produces a limited number of English language channels, compared with cities in Malaysia and Singapore, where he lived previously.

Over the past 12 months, James said he has lost Star World, Universal and Diva Universal TV, which carry many popular English language TV shows, such as "American Idol" and "Law and Order."
Heartbreaking, eh? We haven't had cable TV since the 1990s. In those days it was illegal and service was excellent and the number of channels offered was enormous. Anyway, try the internet, it has a much better selection than your cable company....
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English Services in Taiwan Video Contest! First prize = $50,000!

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Friday, August 10, 2012

Olympic flag success

Some good progress on international issues made these Olympic games by Taiwanese the world over. First, the stream of complaints led the London Olympic games committee to reverse its decision on representations of the ROC flag....

Hsu Mien-sheng (徐勉生), the director-general of the ministry’s Department of European Affairs, described the move as a “gesture of goodwill” extended to Taiwan after an ROC flag was removed from an array of 206 national colors, representing the nations competing in the Olympic Games, in a London street. The display was organized by the Regent Street Association.

The Taipei Representative Office in the UK had reached an understanding with the LOCOG that Olympic-venue security staff would allow spectators to dress in the colors of the ROC flag, paint the ROC flag on their faces, or bring small ROC flags with them to the venues, Hsu said.


The association was “overloaded” with telephone complaints and e-mails from UK politicians, ordinary British citizens and people from other countries about the replacement of the ROC flag in the display, Hsu said.

Some members of the UK parliament also sent letters to the association to express their disapproval and demand a remedy, Hsu added.
Can't wait until some low-level Chinese athlete stages an over-the-top protest. Another change widespread this time around is that the sports media is using the ROC flag to represent "Chinese Taipei" and often using "Taiwan" as well when they list medal counts. Good work, folks.
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Thursday, August 09, 2012


Piles of stuff. Part of our lives, found everywhere in Taiwan, like this pile of TVs on its way to the recycling center.

I moved this post below READ MORE....

Wednesday, August 08, 2012

Continuing to be Breaking News: the Flag

CNA reports that Olympic venue personnel warned Taiwanese students that they will be kicked out if they wave the ROC flag.
奧運跆拳道擂臺旁,中華民國國旗陣陣飄揚。倫敦時間今天上午比賽結束後,現場工作人員已向台灣的留學生下通牒:「如果再把國旗拿出來,很抱歉,我必須把你們趕出去。(If you take that flag out again, I'm sorry, but I will have to kick you out).
Silence on this issue isn't helping Ma, who as maddog pointed out on Facebook, once took out an ad to thank everyone who ever waved the flag. Meanwhile we watch as the flag is appropriated by locals, especially the young, and taken to symbolize Taiwan, not the ROC.
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Taiwan: Snapshots of Democracy in Action

German reporter Klaus Bardenhagen writes:

Having been an eye witness to some political key developments, I have just published an English/Chinese book called 'Taiwan: Snapshots of Democracy in Action' (我鏡頭下的民主時刻).

Living in Taiwan, during the last few years I have been intrigued by all the demonstrations and social movements trying to raise awareness for their causes and to change Taiwan's society.

I realized that many Taiwanese (and definitely most people abroad) are not really aware of all that has been going on. So I decided to compile this book with 80+ photos to highlight some key moments 2008-2012.

For example, who still knows what CKS Hall looked like when there was an exhibition on Taiwan's democracy movement, which was taken down in 2008?

The place to preview and order the printed book as well as the eBook (iPad) is

Taiwan: Snapshots of Democracy in Action



Since 2008, I have been reporting from Taiwan for German media, including print, radio and television. Trying to make sense of what is happening around me, I hope to eventually raise some awareness for Taiwan and its democracy.





One country, many faces

My first impressions of Taiwan included a lot of shouting, cheering and flag-waving. It was election time. The emotionally charged street rallies were very different from the somber campaigns I was used to from Germany.

Living in a democracy, Taiwanese needn't be afraid to make their voices heard. There is a lot they don't agree on, and the stakes are always high. Over the years, I have been lucky enough to witness some key moments.

From Taiwan's 2008 presidential campaign to the aftermath of the 2012 elections, these are my snapshots of democracy in action.

Preview and order the printed book or the eBook (iPad):
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Tuesday, August 07, 2012

Economy Continues to send negative signals

Amid the news about the domestic terrorist incident in Wisconsin, the Mars Rover landing, the Olympics, and sundry other incidents, Taiwan's economy continues to slow....WaPo says:
Taiwan’s exports fell 11.6 percent to $24.8 billion in July from a year earlier, contracting for a fifth consecutive month amid weak foreign demand for the island’s high-tech and other goods.

The Finance Ministry said Tuesday that imports declined 3.2 percent to $23.9 billion in July.

Exports to China fell 11 percent to $10 billion. Exports to the U.S. dropped 20 percent to $2.8 billion, following a sharp decline in smartphone sales by HTC Corp., Taiwan’s top handset maker.
RTT News had a nice graphic of Taiwan's exports... note the overall downward trend....

RTT reported that shipments of 3C stuff plummeted 34.5% YOY. Ugly. The RTT report observed:
Inflation surged to a near four-year high 0f 2.46 percent in July on higher food costs, limiting room for the central bank to ease monetary policy in response to flagging economic activity. Core inflation was 0.96 percent.
The recent surge in food prices is due to the typhoons and rain that have been battering us (FocusTaiwan says veggie prices rose nearly 33%, while fruit prices went up nearly 20%) , but with the massive drought in the US worldwide food prices are going to surge. This fall things are going to be tough...
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Ma the Ideologue Peeks Out Again

Yesterday the Taipei Times reported on President Ma Ying-jeou's public reiteration of longstanding KMT catechism: the Treaty of Taipei gave Taiwan to the Republic of China:
The Sino-Japanese Treaty is a treaty verified by international law that clearly states that Taiwan was returned to the Republic of China (ROC), President Ma Ying-jeou (馬英九) said yesterday.

Ma made the remarks at an exhibition held by the Academia Historica and the Ministry of Foreign Affairs marking the 60th anniversary of the signing of the Sino-Japanese Treaty, also known as the Treaty of Taipei.

Ma said that according to the Cairo Declaration jointly issued by the ROC, the US and Britain on Dec. 1, 1943, Article 8 of the Potsdam Declaration, issued on July 26, 1945, and the Japanese Instrument of Surrender, all three stated clearly that after World War II, Japan agreed to return what was then known as Manchuria, including current-day Liaoning, Jilin and Heilongjiang provinces, Taiwan (Formosa), and Penghu (the Pescadores) to the ROC., that fine repository of the pieces of paper that define Taiwan's status, has the Treaty of Taipei on file. You can read it yourself -- it is very clearly subordinate to the San Francisco Peace Treaty, under which Japan gave up Taiwan but no recipient is named. Ma also instances two ROC favorites, Cairo and Potsdam. The last time Ma did this, I explained why these claims about the Cairo Declaration are rank nonsense. Nothing has changed since then.....

It's not very interesting to have yet another iteration of the same nonsense from a ranking KMT member assault the ears, but all good propagandists know that propaganda must be repeated if it is to have any effect. More interesting is, once again, what it reveals about Ma, the pro-China ideologue (here, for example)  -- as well as the impotence of this discourse, its essentially pro forma nature...

Remember when Ma was the cool, pragmatic leader in the fawning media reports? Yeah, that discourse has gone down the memory hole.....

UPDATE: A friend reminded me of J Tkacik's letter in the TT from 2009:
ROC foreign minister Yeh explained this provision in Legislative Yuan interpellations, noting that the Taipei treaty made “no provision ... for the return [of Taiwan and the Penghus] to China.” He asserted, instead, that the ROC had “de facto” control of the islands, and therefore, “Inasmuch as these territories were originally owned by us and as they are now under our control … they are, therefore, in fact restored to us.” Still, he had to admit that “no provision has been made either in the San Francisco Treaty of Peace as to the future of Taiwan and Penghu.”

This raised anxieties among the legislators during the Legislative Yuan interpellations on the Taipei Treaty who bluntly demanded to know: “What is the status of Formosa and the Pescadores?” He replied: “The delicate international situation makes it that they do not belong to us. Under present circumstances, Japan has no right to transfer Formosa and the Pescadores to us; nor can we accept such a transfer from Japan even if she so wishes.”
COOL STUFF: Taiwan-based professional photographer Craig Ferguson has opened a Facebook page for Taiwan professional photographers.

JUST FOR FUN: Raunchy graffitti from the ruins of Pompeii, faithfully and lovingly translated.

EVENTS: Don't miss the annual Perseid meteor shower, which will peak on Aug. 11-12.
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Sunday, August 05, 2012

Yeah, some bugs

Actually had some free time today, so I went out to try my hand at some bug pics. Enjoy. Click on read more to see more....

GOOD NEWS: Scientist Shieh found not guilty.

Corn knocked down by Soala.

Longtime readers will remember this case. First a bit of background from one of the Taipei Times pieces today:
Ten defendants, including Shieh and Hsu Hung-chang (許鴻章), owner of Sheus Technologies Corp — also known as Hung Hua Engineering — were indicted in December 2006 on corruption charges after Sheus won an NT$8.05 billion (US$262 million) construction tender to reduce the vibrations caused by the high-speed rail as it passes through the Southern Taiwan Science Park.

High-tech companies with operations in the park, such as chip manufacturers, are affected by vibrations above 48 decibels.

The Tainan District Court found Shieh not guilty in August 2008, and after Tainan prosecutors appealed the ruling with the High Court’s Tainan branch, the branch again acquitted Shieh in June of 2010.

Prosecutors then appealed the case with the Supreme Court, and the top judicial authority ordered the High Court’s Tainan branch to retry the case. On July 11, the Tainan branch found Shieh not guilty for a second time. This time, prosecutors said they would not appeal the case, therefore the verdict finding Shieh innocent is final.
Shieh's remarks from an interview in the Liberty Times summarized in the Taipei Times:
Shieh said he was thankful to all the family members and friends that had cared for and encouraged him while he had been imprisoned, adding that “in comparison to the people jailed for decades over the Kaohsiung Incident or former president Chen Shui-bian (陳水扁), who is still behind bars, I’m pretty lucky.”

Born in Cigu District (七股), Greater Tainan, the 70 year-old Shieh received his PhD in aerospace engineering at the University of Michigan and had worked at the Rockwell Automation as a guidance and control analyst prior to his return to Taiwan.

After his return, Shieh became the nation’s main promoter of aerospace technology, presiding over the launch division when the Formosat-I satellite — formerly known as ROCSAT-1 — was launched in 1999 by Lockheed-Martin at Cape Canaveral Air Base, and was also on the planning committee for Formosat-3.
This appears to be most contemptible cases brought in the wave of prosecution cases against DPPers for "corruption." Not only was Shieh an important figure in Taiwan's technology world, he was blacklisted for many years and could not return to Taiwan (old post). To really get the flavor of how appalling the case was, this old post at Taiwan Matters should be consulted.
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Friday, August 03, 2012

Have the Strawberries Found Their Voice?

Taipei Times editorializes on the Strawberry Generation:
For those who have long complained about the seemingly apathetic Taiwanese youth on matters of politics, the past two weeks must have had elements of both surprise and relief, with two large student mobilizations taking place in two cities on two different continents: London and Taipei.

The catalyst in both instances was injustice — the removal, following official complaints by China, of the Republic of China (ROC) national flag at a non-Olympic venue in London, and the creation of a pro-China media monster through the acquisition by the Want Want China Times Group of China Network Systems’ (CNS) cable TV services, and the subsequent threat of lawsuits by a Want Want employee against a student.

Hundreds gathered on Regent Street in London, proudly showing the ROC flag, while about 700 protested in front of the CtiTV building in Taipei, calling for freedom of speech to be respected. In stark contrast to the protests organized by the pan-green camp, where the majority of participants are usually above the age of 50, those two events involved students and young professionals who were educated, connected and angry. They were, in essence, the same type of people who took to the streets earlier this year when two houses were flattened in a suburb of Taipei to make way for an urban renewal project; or those who turned up in large numbers to confront police and contractors when farmland was seized to accommodate large-scale industrial projects.

Issues of justice, rather than abstracts of ethnicity or nationality, are what lights the fire in the belly of Taiwanese youth today. For them, the past is in the past and the issue of who they are has already been settled; what they look to is the future and the uncertainties created by injustice. That is why one can hardly find anyone below the age of 30 at protests against, say, the so-called “1992 consensus,” but thousands will roll up their sleeves when someone’s property is threatened by state rapacity.

All of this occurs at a time when policymaking within the Ma Ying-jeou (馬英九) administration appears to have been taken over by an old, conservative wing of the Chinese Nationalist Party (KMT), while moderates in the pan-blue camp have grown largely silent.
When I went down south after the Morakot disaster I was struck by the large numbers of young people -- organized by local governments -- who had poured out to help the victims. The Strawberries are not soft, but their causes are not the same as those of their parents.

The TT's claim that Strawberries "know who they are" is entirely correct; the problem is that their identity is incomplete -- as I've noted before, it's a not- identity: "we are not Chinese, we are Taiwanese." But it should be noted that the Strawberry generation maintains harmony amongst its members by avoiding discussion of the Blue-Green divide and papering over those tribal identities with silence. The reason social injustice motivates them is probably fall-out from that general generational decision: social injustice is something everyone across the Blue-Green divide can agree on.

The Losheng Leper Sanatorium was probably the first issue for the new generation. Another key moment was the Wild Strawberry movement, which fought for public assembly rights. Although it worked hard to be non-partisan, the government and its servants struck heavily at it by painting it as a pan-Green tool. Assembly rights are overtly political rights.... what's interesting in the WantWant case is that the side supporting a free and open media environment has successfully avoided the charge of being a pan-Green tool, even though WantWant and its CEO are rabidly pro-China. It seems to me that unlike in the Wild Strawberry case pan-Green politicians appear to have maintained a discreet distance. Moreover, the student who was threatened with a lawsuit for posting pictures on the internet is someone that every young person in Taiwan can identity with; they all use the internet as naturally as breathing and they all post pictures on social networks.....
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