Saturday, July 30, 2016

The KMT Assets Bill: transitional justice in action

Pigeon cages.

This week the focus was on the asset bill directed at the KMT. The bill has solid support: yet another poll came out showing public support for the recent passage of the KMT assets bill: 53.9% say that it is an important step in transitional justice. Solidarity translated the recent TISR poll on it, noting that 61% support the bill and only 11% believe the KMT's story on its assets. The public is on board with the idea of KMT assets being transferred to the state as a form of transitional justice...

The legislature approved the law on Monday. The Taipei Times reported:
The legislature yesterday passed legislation governing ill-gotten political party assets, which states that all properties obtained by political parties after 1945 — not including party membership fees and political donations — are to be considered illegal and must be returned to the state.


The act states that all assets of a political party are considered frozen the moment the act is promulgated, with violators facing a jail term of up to five years. Any attempt to avoid, deny or obstruct investigations into party assets could lead to a fine of between NT$100,000 and NT$500,000.

The legislature also voted to approve a key provision of the act that stipulates that assets obtained since Aug. 15, 1945, would be subject to the proposed law.


The DPP moved to amend the official name of the draft from the “act on handling ill-gotten party assets” (不當黨產處理條例草案) to the approved version to include assets held by the KMT’s affiliate organizations, such as the China Youth Corps and the National Women’s League of the Republic of China, as the funding of these organizations has always been included in the party’s fiscal budget.
Several pieces of interesting information here. First, the KMT has a year to do the accounting. Lots of stuff will disappear -- I hear interesting stories from my friends in the financial community about seedy attempts to sluff off these assets. Second, the law does have language allowing for seizure of assets if they have been offloaded. Third, only 31 legislators voted against the legislation from the KMT, which has 35. This means that four legislators defied their party. The KMT wants to send the bill for constitutional review -- the courts are packed with KMTers from the previous Ma Administration -- but it needs 38 votes -- 1/3 of the legislature. It is now attempting to find votes from other parties.

Ralph Jennings, the Taipei-based journalist, who manages to be both cynical and centrist at the same time, had a really great comment on the assets bill in our ICRT radio broadcast of the other day. He pointed out that the KMT will likely tie up all these asset seizures in court for years to come. That to me suggests the ultimate solution may well be a massive settlement. But that's years off...

This tale is only beginning...
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China tourism query: Taiwanese are so dumb, they don't even understand their own island

One thing I like about Taiwan: dogs and cats go everywhere with their people.

A while back I was having some tests done at the hospital. I'm lying there on the table (biking bonus: resting pulse is 61) and the tech is having a chat with me while we wait for the meds to kick in: where are you from, how do you feel about Taiwan? etc. "Oh, I love Taiwan. People are so friendly." "Yes," he agreed, "we are friendly to everyone except to those..." his voice drops "mainland Chinese."

It should be obvious by now to anyone who has spent at least twenty minutes on Taiwan that (1) Taiwanese do not like their Chinese counterparts and (2) the drop in Chinese tourists is widely welcomed in Taiwan because (3) Chinese tourism, especially tour groups, is a net negative for the island.

Nevertheless, surprisingly, this got posted to ChinaPol by a leading Taiwan scholar and was leaked to me with knowing winks by several people, and crossed over to other discussion groups which I am on (this frequently happens with ChinaPol posts, it's so cute that they think they can keep stuff on the internet secret). ChinaPol has never let me join, because god knows what would happen if bloggers and other riff-raff were permitted to join. Here's the comment. After the author is surprised to find unconcern about the tour groups vanishing during a recent visit to Taiwan, the author writes:

To be honest, I’m skeptical. I heard the same thing last summer in Greece (about German tourists: who cares whether they come or not? They just stay at German-owned hotels anyway), and it sounds a lot like a rationalization. I also don’t know how pervasive these views are.

However, if what we care about here is the politics, if people believe the benefits of Chinese tourism are limited, that’s what matters. If Taiwanese have persuaded themselves that PRC tourists are not really helping the economy, reducing their numbers is not going to put pressure on Taiwan in the way Beijing might hope.

I would be interested to know if anyone is asking about this in surveys.

"Surprisingly unconcerned!" I don't know how anyone who knows anything about Taiwan could find the Taiwanese attitude "surprising". More like, inevitable...

First of all, let's look at some survey data, and then we will take the Scholar's remarks. Here is survey data from Taiwan ThinkTank on this issue from Oct 2015:
9. There is word that China will greatly reduce the number of Chinese tourists visiting Taiwan. Some believe that to avoid injury to Taiwan’s tourism industry, the new government should accede to the demand to accept the 1992 Consensus. Some others believe that the new government should use this opportunity to expand tourism from other countries and lower dependence on China. Which stance do you agree with?
Increase Tourism from Other Countries: 78.1%
Accept 1992 Consensus: 13.5%
Undecided: 8.4%

10. If the number of tourists were to increase, would you prefer more tourists from China or more tourists from other countries?
More from Elsewhere: 85.1%
More from China: 6.6%
Undecided: 8.3%
More from Elsewhere = 85%. Nobody wants more tourists from China. Taiwanese know China tourists suck. They know that Chinese tourism is part of a larger strategy to hollow out Taiwan's industries and to annex the island. They know that places where Chinese go in great numbers soon become inhospitable and bereft of locals. Many hotels don't accept Chinese tour groups -- they evade censure by having a "no tour groups" policy, which everyone understands is aimed at Chinese tour groups. Many hotels routinely place them on floors of their own, since they wreck whatever rooms they are placed in with their incessant smoking, noise, constant eating, and fights with management. They behave horribly, and why shouldn't they? They are treated like cattle, like crap, like money trees (I've had nothing but uniformly pleasant experiences with individual Chinese travelers). I know this myself, because I sometimes am stuck on those floors when I travel (management has sometimes apologized to me for that). These facts are widely reported in the media, on blogs, on Facebook, Twitter, and other social media. It's 2016, and these things should be known to people who regularly comment on Taiwan and its politics.

But what is this massive economic effect that those dumb Taiwanese who don't know their own country are missing and cover with noise that "sounds a lot like rationalization" and against which they "persuade themselves".

Taiwan's GDP in 2015 was ~$528 billion US (source) or 523 billion US (source). So around $520 billion. Let's take $500 billion as a rough GDP figure for the recent period, because it's smaller.

Tourism as a whole is 2.1% of the Taiwan economy (WTTC). In 2014, Taiwan's international tourism receipts were $14 billion dollars, according to AmCham. Looking at AmCham, in 2014 3.98 million Chinese (~40% of all tourist arrivals) visited Taiwan, spending -- according to inflated government figures -- $241.98 each a day. In our $500 billion economy, that's over $6 billion or right around 1% of the economy. Not very much [update: $242 is a daily figure. Assuming a 7 day stay, multiply accordingly to ~$7 billion. Still tiny compared to the economy as a whole. Thanks for pointing out this error, Kenneth. Remember, the government figures are inflated.]

Now let's imagine that Beijing in its fury at Tsai Ing-wen slashes tourism in half. That means the tourism sector will miss about $3.5 billion, using the inflated government numbers. In our $500 billion economy, that's... not much.

Nobody will miss the Chinese tourists except a few businesses deliberately built to exploit those always political flows. They will be featured prominently in the media, especially the pan-Blue media. But the vast majority of Taiwanese won't miss them and won't even notice they are gone. This is especially true because other inbound tourism from Korea, Japan, and SE Asia is on the rise.

Further, as AP showed years ago, the government numbers are inflated. Those billions aren't really billions. Moreover, as has been repeatedly reported in the English and local language media, tourist companies from China are slow to pay, or don't pay their debts to Taiwan firms. The recent slashes in tourism have resulted in a wave of bankruptcies here in Taiwan. Chinese tourists don't pay their medical debts either. Because this non-payment will disappear, the net effect of Chinese group tourism declines will not be very great.

But there's more. A while back I found this excellent paper looking at the overall effect of Chinese tourism even using those inflated numbers. And it was found to be tiny once you factor in everything. The paper observes, using the inflated numbers:
The results from the CGE analysis show that an increase in Chinese visitors to Taiwan is overall beneficial to the economy: the Taiwanese household’s welfare would increase by US$145.1 million (0.06%).
The benefit per household is pocket change. Again, no one will miss it -- most of it doesn't trickle down anyway, but is captured by a few firms, largely China or Hong Kong based.

But wait. What is the net benefit? Relying on the literature on the effect of tourism, there are two separate negative effects:
This, coupled with an expected appreciation in the Taiwanese dollar, means that Taiwanese computers and electrical goods become more expensive on the world market. The overall effect is a contraction of this sector with a high export component.
The first negative effect occurs because Taiwan has X capital and labor resources to put into its different markets. If lots of resources, such as investment capital and trainable labor, are going into the tourism sector because returns are suddenly good, that means they are not going into the technology export sector. That hurts that sector. The CCP and the KMT both know this -- that is why they are pushing tourism: it hurts Taiwan's real export industries. Moreover, if tourists are suddenly cut, all that investment is sunk and not easily transferred to other industries. That hurts Taiwan.

The other effect is the value of the NT dollar. When Chinese tourists enter Taiwan, in order to engage in economic transactions, they purchase NT dollars. Like any other good, when demand for money rises, the price of money rises. This pushes the NT up. That rise in the NT pushes down exports. When those tourists stop coming, the upward pressure on the NT relaxes. The NT falls slightly, helping our real exports.

Thus -- let's savor this for a moment -- when Chinese tourists fall, our tech export sector rises. And that export sector drives increased knowledge externalities, production skills, and rises in standard of living -- the tourist sector has no comparable effect.

I don't know what the numbers are, so it I don't know whether the effect of the investment shift and currency fall offsets the effect of the fall in tourists. But there is a definite upside to the drop in Chinese tourists that has nothing to with the positive effect of the tour groups vanishing from our roads and scenic areas.

The Taiwanese may or may not be aware of this, but it is abundantly clear that certain sectors of the scholarly world need to install Google in their computers.

But let's address one final point. Is Beijing "putting pressure on Taiwan?" Well, maybe...

Outbound tourism is, by definition, an import. Like any import, you send money out, and something comes back -- refrigerators, clothing, food, or, in the case of tourism, experiences.

As everyone not living in a cave knows, China's economy hasn't been performing well of late. Suppose you were Beijing and wanted to cut imports to maintain your export surplus in a time of struggling economic performance? Well, you can't really cut certain imports like oil or food or electronic parts or minerals, because you need them to make stuff that you export. But outbound tourism? That's easy. It doesn't hurt Beijing at all if tourists spend money in Szechwan instead of Suao. The overall effect is tiny, but it doesn't hurt.

Taiwan is usually one of China's top markets for outbound tourists. For example, in the second half of 2015, Taiwan was number 2. By cutting outbound tourism to Taiwan, which has always been political anyway, Beijing not only plays to the international media and academic worlds, which love a good ZOMG TAIWAN IS TENZ! story and are always happy to spread Beijing propaganda by noting that Beijing is "punishing" Taiwan, but also reduces its imports.

So what's the real driver of the tourism cut to Taiwan? You tell me.
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Friday, July 29, 2016

On ICRT at 8:15 or so tonight

On ICRT with Ralph Jennings, who had some sharp observations on the KMT asset law, and with Ian Rowen, who delivers on tourism. Hosted by the awesome Keith Menconi. Gavin Phipps was on break, so we Americans had no one to rein us in.

Link to the blogpost

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Tuesday, July 26, 2016

Links for Tuesday

From the Democratic Party Platform: nice things about Taiwan.

Totally quotable: from presentation today on IP tweeted by Peter Dernbach: Total page views to top 5 pirate sites in Taiwan are 5 times more than total page views to top 5 legitimate sites.
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Sunday, July 24, 2016

Tsai interviewed in WaPo

A little community lake in Miaoli

It's nice that the Washington Post interviewed President Tsai. Unfortunately -- as is all too common -- the Post interview went to someone who obviously knew nothing about Taiwan and apparently had hurriedly boned up on it. This was regrettable, all the more so because the Post employs Emily Rauhala who has already interviewed Tsai.

The introduction of the interview observed:
...Although China and Taiwan have been able to paper over their differences to date, tensions have been mounting since Tsai’s inauguration, when she did not restate the so-called ’92 consensus, in which Taipei and Beijing agreed that they are part of “one China” — but with different interpretations.
Um, nope. Beijing does not accept the "different interpretations" codocil. There is no excuse for regurgitating this piece of KMT propaganda -- explanations are all over the internet. Please stop, journalists. The two authoritarian, unelected governments in Taipei and Beijing did not agree on anything in 1992. At least, as the Taipei Times pointed out in an editorial, the interviewer used "so-called". My man maddog called attention to the KMT's response: the party said it was disappointed that Tsai had chosen to go with the will of the people on the 1992C (which has only minority support in Taiwan).

Someone needs to prepare Tsai for this nonsense so she can instantly point out Beijing never accepted that codocil.

A keen observer of local affairs pointed out in a couple of discussion groups that WaPo "paraphrased" Tsai's responses into laconic oblivion, and that of the interview's 1300 or so words, over 500 were the interviewer's questions. Reading Tsai's responses from the Presidential office transcript was thus a bit like reading the English subtitles of the 4 PM Godzilla movie when I was a kid:
CHARACTER SPEAKING JAPANESE: asajhaksd qwqiuey ;pteprofkepokf kaak alkje aaoijde alijl aiosudh! oasjudj llaije jliajdelij lalajd owoirjgw! aliaedj!

Keen Observer pointed to the WaPo question about which presidential candidate would be better for Taiwan (just think of all the questions the interviewer could have asked, but instead chose this pointless, disrespectful, and impolite question).

WAPO: "As the leader of a different country, it is not very wise for us to comment on the presidential election in the U.S."
The second half of the response, in which she expresses the hope that whoever is elected, current relations would continue, is simply removed, making Tsai sound almost truculent. Similarly, compare the length of WaPo's "question" (actually a pro-Beijing accusation) to Tsai's answer.
Q: It doesn’t seem that way. I think it was China’s Taiwan Affairs Office, part of the State Council, which said that your speech was “an incomplete exam.” There is no public indication that they appreciated your position. Are you, the president, in touch with your counterparts in the Chinese government?

A: Different levels of the government have different ways of communicating with their counterparts in China. At this stage, I cannot go into too much detail.

總統:就像我講的,現在所暫停的是兩會的管道、陸委會與國臺辦的管道,這在官方的意義或許是存在的,但問題是長久以來,雙方之間管道確實是很多元的,現在看到的兩會,也就是海基會與海協會兩會的溝通體制,只是整個多元管道中間的一部分。當我講到多元,其實它是有多層次的面向,不僅是政府在交流的過程中,很多政府機關跟他們在中國大陸的對口,也都有一定程度相互通訊息與交換意見的機制。I’m saying different levels of the government have different ways of communicating with their counterparts in China.(我政府各層級都有和中國大陸對口機構聯繫的管道)我不能在這個階段進入太多細節。
Sshe emphasizes that there are many communication channels between China and Taiwan, not only government bodies, but quasi-governmental bodies, and that many governmental bodies have their own communications channels with their Chinese counterparts. The second sentence about detail makes her seem abrupt.

Note that most of the questions have a China focus or a pro-Beijing slant:

  • Q: What is your impression of Chinese President Xi Jinping? (who cares? What answer could Tsai give as the leader of the Taiwan government? "I think Xi is a mass murdering authoritarian and dangerous to peace in Asia." That was a wasted question.)
  • Q: Some academics say Xi has a certain deadline by which he wants you to agree to the ’92 consensus. Is that right? (asks Tsai to respond to alleged China demand).
  • Q: Since your inauguration in late May, the Chinese have cut off the official channel that was used to communicate between Taiwan and the mainland. How do you plan to handle day-to-day relations with Beijing? (China focused and then repeated below...)
  • Q: It doesn’t seem that way. I think it was China’s Taiwan Affairs Office, part of the State Council, which said that your speech was “an incomplete exam.” There is no public indication that they appreciated your position. Are you, the president, in touch with your counterparts in the Chinese government? (...same question as previous, this time half accusation. Also the comment "no public indication" is assumptive -- some observers regarded China's "incomplete test paper" response as indicating flexibility and some dim appreciation of Tsai's position.)
  • Q: Do you feel you are closing the gap between Taiwan and the People’s Republic of China?(Assumes "gap" -- whatever that means -- needs closed, and a lot like the last two questions. A completely unnecessary question. Was there nothing concrete to ask about?)
  • Q: Is it fair that Washington has considered Taiwan an entity, not a country, since 1979, when the United States changed sides and recognized the People’s Republic of China (with its capital in Beijing) — in lieu of the Republic of China in Taiwan (with its capital in Taipei) — as China? (this question is also stupid. What could Tsai answer? "No, you people are rotten bastards for switching recognition." Sometimes I wish she would. Think of all the other things that could have been discussed even if the interviewer wanted a more American focus: the pork and beef situation, the TPP, US investment, technology exports, the Taiwan Caucus in Congress, Taiwan's position on Capital Hill, the large Taiwanese population in the US...)
  • Q: So isn’t it unfair that Taiwan is not recognized in the world? (variant of previous question)
  • Q: American readers would find it hard to understand that you, as a Taiwanese president, are only allowed to come to the United States for 48 hours, and then only if it is a transit stop. (not a question, a teachable moment wasted. Three questions on this topic. LOL.)
  • Q: There has reportedly been a drop-off in tourists from the mainland. Will that hurt your tourist industry? (possibly a good topic, but phrased so simply)
  • Q: China could bring more pressure on Taiwan if it chose to. They could frighten away your diplomatic allies by threatening to weaken your bonds with them. Are you worried about that? (Seriously? "No, I'm not worried at all. Now where is my Prozac." China won't chase off all the ROC's friends for reasons that are obvious. Except to this interviewer. Tsai correctly shifts the issue to economic attacks.)
  • Q: So you think as far as your alliances go, they will stay as they are today? (asked and answered)
  • Q: Your predecessor, President Ma Ying-jeou, wanted to buy 66 F-16s from the United States. Even though 47 senators wrote in support of his request, nothing happened. Do you intend to repeat that request? (uninformed -- that was Chen Shui-bian who requested the F-16s. Ma did not want F-16s and dilly-dallied. Will Tsai repeat this request? F-16s have been DOA since requested...)
  • Q: I think Ma also asked for diesel submarines and got nowhere. Will you repeat that request? (Let's ask a question about a topic that's been DOA for a decade now. I mean, why ask about beef, or students, or the TPP, or the WHO, or the UN...)
  • Q: I understand that the focus of your program is domestic — that you want to raise wages, to give people more time off. But with a growth rate under 1 percent, how can you spur the economy while delivering increased social services? (Be still my beating heart. A question about domestic policy. [FAINTS])
  • Q: Isn’t China your No. 1 trading partner? (aaannnnddd back to China. That didn't last long).
  • Q: So China has become a competitor of Taiwan? (oh, China again. Couldn't use this space to ask about ASEAN? Japan? The EU? Defense cooperation with Japan and US? Chinese ADIZ over SCS? etc etc etc).
  • Q: I saw that you expressed disappointment over the ruling by the Permanent Court of Arbitration in The Hague on the South China Sea. It held that Taiping Island, which you claim as part of Taiwan, is a rock, not an island, and thus cannot enjoy an exclusive economic zone. Will you abide by the ruling? (this question is so well informed it seems like a question the Tsai team might have suggested. Which is very scary).
  • Q: It must have been difficult to be a woman leader in such a male-dominated society.(asked and answered in previous question, and ignorant too. Taiwanese are far more accepting of females in power roles than the US is -- it is a merely a US cultural prejudice that people in the US believe otherwise. Interestingly, while Tsai was allotted little space to answer in many of the previous important questions, WaPo let her speak fully on this minor issue -- which exoticizes Tsai as coming from an inferior country which is male-dominated, assumed to be unlike the US -- which has had precisely zero female presidents or vice presidents in 200 years. Taiwan has had one of each.)
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Saturday, July 23, 2016

The SCS Tribunal Demagoguery Continues...

Shijhuo town above Chiayi

On the 20th legislators from both the KMT and DPP headed out to Taiping Island, or Itu Aba as the world knows it, to demonstrate sovereignty on the taxpayer dollar. Taiwan Today reported:
Lawmakers Chen Ting-fei, Lo Chih-cheng, Tsai Shih-ying and Wang Ting-yu of the ruling Democratic Progressive Party, as well as Chiang Chi-chen, Hsu Chih-jung, Huang Chao-shun and Lu Yu-ling from the main opposition Kuomintang, flew from southern Taiwan’s Pingtung Airport to Taiping Island on a military transport aircraft.

During a roughly two-hour visit, the legislators inspected a number of facilities on the island, including its satellite and solar power equipment and weather station. “Taiping Island is absolutely not a rock, as described by the arbitral tribunal, and is in fact an island,” said the KMT’s Chiang, who led the team of lawmakers. “The ROC has administered Taiping Island for seven decades and has continuously worked to improve the facilities on the island, which is fully capable of sustaining human life.”

DPP lawmaker Wang praised the high quality of local agricultural produce after sampling coconut milk from fruit grown on Taiping Island. He also lauded the dedication of personnel stationed there, adding “there can be no question that Taiping Island is an inherent part of the ROC’s sovereign territory.”
The Tribunal ruled that Itu Aba cannot sustain life, since all of its human residents were there only temporarily for extractive purposes, and the island never hosted an indigenous population. Nevertheless, this reality has not stopped a barrage of nationalistic posturing, which harnesses Taiwan nationalism in the service of ROC territorial nationalism. Taiping Island might be a sovereign territory of the ROC but it can never be part of any independent Taiwanese state. The DPP should be downplaying this mess, not stoking it. And it certainly should not be mixing up Taiwan nationalism and ROC nationalism...

Many of us had commented in the run up to the election that Tsai would likely be more rational than Ma Ying-jeou in the South China Sea. She is not off to a good start...

President Tsai herself reiterated this dangerous position in her recent interview in WaPo:
“We will not accept their decision, and there are several reasons for that. First, Taiwan is an important party of interest in this case, but we were not invited to participate in the proceedings. Second, we found it unacceptable that we were referred to as the ‘Taiwan Authority of China.’

“The third reason is that Taiping is indeed an island.”
ROC diplomats have also gone on an offensive with letters in numerous publications explaining the government's position. From WSJ:
The PCA neither formally invited the ROC to participate in its proceedings, nor did it solicit the ROC’s views. In addition, ROC-governed Taiping Island wasn’t originally included in the Philippines’ submissions for arbitration. However, the tribunal took upon itself to expand its authority, declaring all features in the Spratly Islands to be rocks, including Taiping Island, which beyond dispute meets the criteria of an island as defined by the U.N. Convention on the Law of the Sea, as it can sustain human habitation and an economic life of its own.
The letter contains a confusion that many people, including myself, fell for: the Permanent Court of Arbitration issued the ruling. Actually, it wasn't that court, as Jerome Cohen explained, but a different arbitration panel appointed for this case. UPDATE: Here is another one from the Taiwan rep in Phils

The language "the tribunal took [it] upon itself to expand its authority" is the Taiwan government position. Itu Aba was, according to Philippines media reports, originally not part of the Phils submission....
“In the beginning, nobody said, ‘Include Itu Aba.’ Nobody. Not (Paul) Reichler (the Philippines’ lead lawyer), not the Department of Foreign Affairs (DFA). Nobody,” Jardeleza told the Inquirer in an interview on Thursday.

“Nobody wanted to mention Itu Aba because the risk was, if the tribunal ruled that it was an island, there would be an overlap of the EEZs,” he said.

The feature was not in the original complaint against China that the Philippines brought in January 2013.

In the following months, Jardeleza’s said scholars started taunting the Philippines in news reports for missing the largest feature in the Spratlys in its case.


Still, Reichler, of the international firm Foley Hoag who was commissioned for the case because of his experience in international arbitration, wrote 17 paragraphs about Itu Aba in the Philippines’ “memorial” in the case.

The memorial—a “long explanation of the complaint,” according to Hilbay—was in the works at the time.

Then President Benigno Aquino III eventually decided to include Itu Aba in the memorial, which was filed in March 2014, through mere mention, which made it “an incidental issue that might be relevant for deciding the major issues,” Hilbay said.

Later, it was the tribunal itself that asked the Philippines to submit further pleadings tackling Itu Aba—the strategy that Hilbay and Jardeleza said they had been eyeing all along.

“[The tribunal] knew Itu Aba was going to be crucial because it’s the largest feature. The tribunal itself was the one who compelled us to discuss Itu Aba, so it’s they signaling to us that we could not decide a lot of the issues you raised without looking at Itu Aba. But it’s the tribunal, not the [Philippines, that raised it as a feature whose status must be clarified],” Hilbay said.
The Philippines' legal strategy was apparently to get the Tribunal to ask for more information about Itu Aba. The Tribunal did not "expand its authority" since it was authorized to explore the Philippines' complaint against China, and anything that Phils included in the complaint was fair game.

The position that the Taiwan government was not invited and thus rejects the conclusions is mere cant. Only two governments were invited, China and Philippines, since the case was between them, and Beijing rejected participation. Other governments with territory in the area, such as Malaysia and Brunei, were also not invited. The tribunal looked at Beijing's public statements, however, and accepted briefs from Taiwan. In fact, Philippines told the Tribunal that in lieu of China's participation, the tribunal could accept materials from Taiwan. China, which makes the exact same case for Itu Aba as the ROC does, sent several letters to individual members of the tribunal, though it emphasized that the letters did not constitute a plea or participation. Paragraph 438 of the Tribunal's decision observes:
438. The Philippines considers the Taiwan Authority’s submission of additional materials concerning the status of Itu Aba, such as a “Position Paper on ROC South China Sea Policy Republic of China (Taiwan)” and an “Amicus Curiae Submission by the Chinese (Taiwan) Society of International Law,” similarly unavailing. Even on the basis of the materials submitted by the Taiwan Authority, the Philippines argues that Itu Aba has neither a longstanding history of human habitation nor possesses sufficient fresh water and soil resources to sustain such a population, and notes that any attempts made to carry out “meaningful economic activity” on Itu Aba uniformly “ended in failure.”459 The Philippines attaches a supplemental expert report by Dr. Ryan T. Bailey, who questions the Taiwan Authority’s measurements of water quality and salt concentration on Itu Aba’s wells. 460 The Philippines considers the historical account presented by the Taiwan Authority relevant insofar as it undermines China’s claim to exclusive rights within the ‘nine-dash line’.461
Taiwan may not have been invited to participate, but it clearly participated (the friend of the court brief from the ROC body is here and hosted on Scribd, the position paper is online here). Both of those were submitted under the Ma Administration. As Francis-Xavier Bonnet has shown, the "markers" referred to in both texts that assert older Chinese sovereignty over the islands were planted in the 1930s and again in the 1950s.

And none of the PRC or ROC presentations addresses the key Philippines' argument: there was never a population of indigenes on the island.
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Friday, July 22, 2016

Politics is the Way of the Gods

A hilly street.

Jules Quartly over at the News Lens offers a conventional and oft-written piece on religion in Taiwan (originally for AmCham)...
To an outsider, this religious practice might seem at odds with Taiwan’s status as a decidedly modern and technologically advanced society. Yet the past and present coexist without contradiction in the minds of most of its citizens. The reason is partly historical. While the Communist Party repressed traditional culture, including folk religion, following its takeover of China in 1949, these practices thrived under the Kuomintang (KMT) government in Taiwan.
Actually, the KMT attempted to suppress and reshape local religious practice well into the 1970s, because in many cases it was a source of resistance to the regime and to KMT rule. Folk religion eventually thrived because unlike Communist China, the locals were able to draw on great resources to defeat the Leninist authoritarian party's commitment to suppressing and co-opting local religious practice.

These policies are documented in several scholarly works over the years. They ranged from outright bans on certain songs, to pressure to reduce the size of religious festivals as "waste" (for example to reduce sacrifices or to combine festivals) under the slogan of "Simplify Customs and Save Waste", to taxes on the performances of folk opera for the gods in certain areas. Sometimes county governments would withhold subsidies to local governments hosting festivals felt to be too "wasteful" by the KMT. Thus, religious festivals became acts of resistance to KMT rule and modes of communication between rulers and ruled, and ways to recapitulate and experience the Taiwanese identity of the day (also true of the Japanese period). These attempts by the KMT to suppress local religion eventually died off. After that the KMT adopted a new line, one repeated by Quartly here, that the vibrant local religious scene demonstrated the superiority of KMT rule. What it really demonstrated was KMT failure...

Quartly's piece also demonstrates the very common failure of journalists marveling at the world-famous Matsu procession. He scribes:
One of Taiwan’s liveliest festivals is the Matsu Holy Pilgrimage, which recreates the journey of 19th century devotees who traveled every 12 years from Taiwan to the goddess’ temple in Meizhou Island, off the coast of Fujian in China. The now eight-day pilgrimage from Zhenlan Temple in Taichung to Fengtian Temple in Chiayi is internationally famous and recognized by UNESCO as a world intangible cultural heritage.
...without mentioning its close connection to the KMT and the fact that it has long been run by Yen Ching-piao, widely reputed to be the island's biggest gangster, and his temple association. Years ago I took BBC to task for neglecting this aspect of the pilgrimage. In addition to its local political function and its pro-KMT political functions, the Matsu cult is a key nexus of pro-China annexation efforts (read that post on BBC above). Longtimers here may recall that one of the first direct sailings from Taiwan to China in the modern era was a Matsu ship in May of 2009, heading up by one of Yen's right-hand men. Remember also that one of Jason Hu's projects as mayor of Taichung was to build an enormous Matsu statue facing across the Strait.

Quartly's neglect of the rich political associations of the Matsu cult is all the more strange since he briefly discusses the connection between religion and politics at the end of the article.

This widespread conventional presentation needs to stop...
To an outsider, this religious practice might seem at odds with Taiwan’s status as a decidedly modern and technologically advanced society. Yet the past and present coexist without contradiction in the minds of most of its citizens.
"Past and present coexist without contradiction" is true of any society. I don't know why folk religion would seem at odds with Taiwan's status as a modern and technologically advanced society, since religious practice in every society coexists with what is considered modernity. It should be taken for granted that all societies are like that, and no explanation or mention is necessary. We do not write like that about our own societies, let's not do so about others...
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Thursday, July 21, 2016

The politics of delusion: Tourism Gains from China

Getting an oil change.

Tourists from China fell month to month and year on year again in June...

May 327,254
June 271,478

Hong Kong and Macao tourists rose, however...

May 125,302
June 143,276

Overall tourists fell as well, from 882K in May to 817K in June. That's more serious, than the always political and always transient flow of territorial imperatives from China. Note that the fall in Chinese tourists has made Hong Kong tourism equal to more than half of all China.

The dramatic news of a bus fire that killed 24 tourists from China and two Taiwanese overshadowed another reminder that Chinese tourism is a massive loser for Taiwan. The Taipei Times reported that one Kenting restaurant has banned Chinese tour groups:
As a growing number of travel agencies that cater to Chinese tourists find themselves in debt, restaurant owner Wu Po-min (吳柏旻) said he hopes to draw individual foreign and Taiwanese tourists, rather than undercutting offerings for tour groups and lowering standards.

“Bringing annual losses of nearly NT$1 million [US$31,260], Chinese tourists are poison wrapped in honey,” Wu said. “When Taiwan was first opened up to Chinese tourists, business appeared to be great. Every day there would be bus after bus of tourists parked outside. It was an endless stream of traffic and, for a time, lots of money was made.”

“However, in recent years travel agencies have been settling bills on a monthly basis — the nightmare has begun for many restaurants that depend on tourism,” he added.

Large travel agencies often transport busloads of tourists to restaurants for a commission, but in the past couple of years, as these agencies have started going bankrupt, they have been leaving as much as NT$1 million in unpaid restaurant bills, Wu said.

Bankruptcies have been occurring all over Taiwan, with proprietors generally forced to absorb unpaid bills themselves, he said.
This problem has been ongoing for years, with the media reporting that Chinese travel firms are not remanding monies to local firms. The "gains" that the media reports come from the Ma government's surveys of tourists at airports, asking them what they spent. Not reliable data, as the media has shown many times over the years. The numbers are inflated, and even the lower and more rational numbers were still too high, because of the unpaid debts to local businesses: the alleged money never actually arrives. Chinese tourists also do not pay their medical debts -- up to US$31 million worth.

Luckily some netizens gave us some comic relief, posting mocking ads that said that advertized that Taiwan's famous tourism sites were once again enjoyable as Chinese tour groups were no longer visiting...
The online ads, with Mandarin, English and Japanese headlines, say that the quality of tourism at popular scenic spots such as Sun Moon Lake (日月潭) in Nantou County and Alishan (阿里山) in Chiayi County has improved as a result of a decline in the number of Chinese tourists.
The drop in Chinese tourists will benefit Taiwan in the long run.

Beijing's cut in tourists is a tactic that benefits Beijing, since outbound tourism is an import. Beijing could be hurting Taiwan businessmen in China, or refusing to trade, or doing something serious. Instead, it has chosen harmless symbolic actions that are good for China -- and probably for Taiwan as well.
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Tuesday, July 19, 2016

Economic growth forecasts = grim

Focustaiwan sent around this graphic above, observing...
The Taipei-based Chung-Hua Institution for Economic Research (CIER, 中經院) has lowered its forecast for Taiwan's gross domestic product (GDP) growth in 2016, citing prolonged weakness in the country's exports amid a slow global economic recovery.

The economic think tank on Tuesday predicted growth of 0.84 percent for the year, down from a previous projection of 1.36 percent in April, and it also cut its forecast for economic growth in 2017 to 1.8 percent from 2.06 percent previously.
Japan, Europe, and China continue to pull down the world economy, said CIER. The Asian Development Bank also downgraded its economic forecast for Taiwan, from 1.6% to 1.1%.  Private sector investments are too low, meaning that excess cash is running around the economy, pointed out another piece.
Speaking to the press, CNFI Chairman Hsu Sheng-hsiung (許勝雄) said that in the past 10 years, local investment only rose 17.19 percent, while the country witnessed its excess savings rate rise to 14.62 percent from 5.73 percent during the period, indicating that the local market is awash in idle money.
One driver of the real estate bubble is that excess of cash in Taiwan...
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Monday, July 18, 2016

Economist turns in another laffer, ATM thieves caught + links

A lovely butterfly from a recent trip

The police captured the fugitives allegedly involved in NT$83 million heist from ATMs recently. According to local news reports, one of the men was in Dong-ao having a meal at a local restaurant when an off duty policeman came into the restaurant and spotted him. Apparently the majority, though not entirety, of the money has been recovered. Good news!

The Economist turns in another of its uniformly crappy articles on Taiwan, this one on Kawaii culture...
The craze is about more than infantile consumerism: Hello Kitty has become an unlikely token of Taiwanese identity. She is part of a wider embrace of Japan’s kawaii, or “cuteness”, culture. And this is a way for the Taiwanese to define themselves as different from China, which lays claim to their island, by cleaving to Japan, their former coloniser.
Yes, that's right, everything relates to China! The article wrong attributes the Hello Kitty craze to McDonald's in 1999, but that is incorrect. YM Ko, who wrote several articles on Hello Kitty culture in the early 2000s, has a good history and review from 2000 when Hello Kitty was already super popular, as I knew from having lived in Taiwan at that time (I have a running joke in all my classes about Hello Kitty since I started teaching at universities in the 1990s)...
Hello Kitty was released after W.W.II in Japan and has always been very popular. In Taiwan, it was expensive in the early days and could only be found in a few boutiques. Not until the 80s were the economical conditions of Taiwan able to afford Hello Kitty; in many department stores Hello Kitty became a popular commodity. In the 90s, counterfeits of Hello Kitty could be spotted in night markets and vendor stands. At first Hello Kitty targeted at the teenage girl market, only in recent years did its consumer age move onward to mid-aged females. Amongst the animation cartoon figures‘ products, Hello Kitty is the only one that successfully developed a mid-aged female market.
Since this is the second article you hit in Google Scholar if you search 'hello kitty culture taiwan' it is hard to see how The Economist could get everything so wrong. Well, it isn't hard, actually. The Ko piece concludes:
Hello Kitty has different roles: the popular culture, the night market counterfeit, the conspicuous consumption, the residue of colonialism, the elite and mass distinction, the sabotage of gender politics. Hello Kitty doesn't invent new cultural identity or meaning. The fact is, the latent social politics and relationships, antagonistic or not, seize Hello Kitty as their vehicle to surface. Various meanings are attached onto the object-sign Hello Kitty and thus consumed.
Yeah, nothing about China in that paper, because Hello Kitty has nothing to do with redefining Taiwan against China. *sigh*

Instead, Hello Kitty mania is related to the larger Japanese drive to market itself during the 1980s and 1990s across Asia...
Since the 1990s, Japan-mania has swept East and Southeast Asian countries and brought inbound tourism to the rescue of Japan’s stagnant economy. In 2003, guided by then-Prime Minister Junichiro Koizumi, Japan launched an international ‘Visit Japan’ campaign [Yokoso! JAPAN]. Except for some affluent Western countries, the campaign mainly targeted Korea, Taiwan, China and Hong Kong – markets heavily influenced by Japanese popular culture. Yoshino Kimura, a Japanese actress, was appointed as Goodwill Ambassador for Japan. The tourist initiative regards the ‘globalization of economy’ as a way to revitalize local regions in Japan (Ministry of Land, Infrastructure and Transport, Japan, 2005). Its goal of ‘making Japan more attractive’ evidences an attempt at nationbranding at a time when Japan seeks to reposition itself in the global economy. It also turns the spotlight of international tourism from modern Tokyo to other localities that have reinvented themselves as representatives of traditional Japan.
This marketing drive included pop music, TV, movies, food, and tourism. Taiwan is part of a regional context of Japanese success at marketing itself as a hybrid culture of modernity and tradition and Asian-ness, according to the Huang paper. But I guess under the Economist's rubric, Japan-mania in China is also an example of the Chinese wanting to differentiate themselves from the Chinese...

I needn't go into Taiwan's old Japan links, and the mutual love affair between the two nations. But the Huang piece referenced above points out that Japan-mania has been followed by Korean-mania, widely accepted across Asia for the same reason that Japanese culture was: it is a hybrid of modernity and Asian-ness, slickly marketed and tweaked for local conditions. Korean marketers, noting Japanese success, deliberately copied Japanese marketing approaches. Huang notes:
If strategic hybridism means adapting foreign cultures to the local context, Taiwanese hybridism makes the local culture look ‘foreign’ – that is, Japanese and Korean. There have been sporadic criticisms of Taiwan fawning on Japan and Korea, but calls for boycotts have been rare. Four mechanisms contribute to Taiwanese acceptance of all things Japanese and Korean: (1) the marketing of Japanese and Korean culture industries, (2) the promotion of Japanese and Korean popular cultures by local media, (3) business practice in Taiwan and (4) transnational tourism. These factors emphasize consumption, but they are also relevant to cultural production.
What? No China identity issue? Say it ain't so!

All this stuff is easily accessible on the Internet, which is why The Economist couldn't find it. Because it already knew the answer: China.
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Sunday, July 17, 2016

Tribunal Decision: the pressure on Tsai + Excerpts from the Tribunal Decision Re Taiping Island

Been here many times, still one of my favorite spots on the island

The Blue side is putting pressure on the Tsai Administration, saying its response to the recent ruling on the South China Sea islands was weak. The Minkuotang, a pan-Blue party, is backing sending fisherman to Taiping Island:
Taiwanese fishermen are planning to sail to Taiwan-controlled Taiping Island in the South China Sea to protect the country's fishing rights in response to a court ruling that rejected the island's right to an exclusive economic zone.

A day after fishermen from Pingtung County's Donggang Township proposed to set foot on Taiping to assert Taiwan's sovereignty claim to the island and safeguard their fishing rights, the Liuchiu Fishermen's Association expressed support for the move on Saturday.
The Party Chair, a former KMT legislator, urged President Tsai to take "concrete action". Like what? Bomb the Hague?

The Legislature also put out a non-partisan statement backed by all parties, because stoopid isn't stoopid if it is unanimous:
A statement announced by Legislative Speaker Su Jia-chyuan (蘇嘉全) at 5pm yesterday said that the arbitration ruling has “seriously damaged the rights of the nation to its territory and the regional peace of the South China Sea.”

“The legislature, the ROC’s highest representative institution and authorized by the nation’s citizens, has made a resolution to make an international statement on the basis of facts and jurisprudence,” it said.

“The ROC enjoys the rights conferred by international law over its South China Sea islands and its relevant waters as they are, in terms of history, geography and international law, part of the ROC’s territory and waters. Any country’s claims or occupation or any international arbitration’s arbitrary decision will not be recognized by the ROC,” the statement said.
The CNA got in the swing of things, putting out a video explaining why the ruling is unfair. Yes, the whole government is taking a position sure to antagonize its South China Sea littoral friends and annoy the US and Japan. Not to mention, this puts pressure on the Tsai Administration. Brilliant.

What did the Tribunal say? Was its decision arbitrary? I've picked up some of the highpoints of the decision from the text (501 pages). They will give you a sense of what arguments and issues the Tribunal considered, as well as the thoroughness of the Philippines' case (click read more)(UPDATED: Phils gov't felt Itu Aba was most difficult part of its case, China blew the case by ignoring it). If you read the entire decision it is clear the Tribunal spent a great deal of energy on the environment...

Friday, July 15, 2016

The Red Cross And Transitional Justice

"Front collapse. Do not risk nearly."

The local Red Cross is a good example of the kinds of small but important moves that need to be made as Taiwan moves into its post-colonial transition. The Republic of China Red Cross has operated under a special act passed in 1954, exempt from the usual laws governing civil organizations. The Taipei Times reports:
The first policy negotiations between the Executive Yuan and the Legislative Yuan on Monday night resulted in a decision to abolish the Red Cross Society Act of the Republic of China (中華民國紅十字會法), the Executive Yuan said.

The New Power Party (NPP) and the Democratic Progressive Party (DPP) in February proposed abolishing the act, saying that the society had special legal status and was not subject to the Civil Associations Act (人民團體法) and the Charity Donations Act (公益勸募條例), adding that the abolishment of the act would advance the implementation of “transitional justice.”
In other countries the Red Cross/Crescent operates under different legal regimes, but then it is part of the international organization. The local ROC Red Cross, while appropriating the name, is not recognized by the international Red Cross. Hence, there is no need for a special legal framework for it -- it is a local organization.

Over the years there have been accusations of cronyism in its board and leadership appointments, strongly pro-KMT and pro-China stance, and a lack of transparency in donations. This back story is why many in the DPP and NPP view the elimination of its special status as an act of transitional justice -- and why the KMT is protesting so vigorously against placing the Red Cross under the law.
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The Tribunal Ruling on China vs Philippines: Tsai misses an opportunity

This week my old college roommate from 35 years ago came to Taiwan, so naturally I took him to Alishan.

I took my old college roommate to Alishan on Tuesday and Wednesday, then frantically did all the work I'd been ignoring, then headed up to Taipei for hours of meetings on Thursday and Friday morning. Sorry for my silence.

New President Tsai Ing-wen has to solve three interrelated problems: (1) the ordinary problems any leader faces, from domestic crises to economic growth; (2) Taiwan's relationship with the large state next door that wants to annex it; and (3) Taiwan as a state in a post-colonial transition. The Taiping island mess impinges on all three...

That's why her response to the surprisingly sweeping decision of the Court of Arbitration decision in the case brought by Philippines against Chinese expansionism in the South China Sea was so disappointing to so many of us watching. The Tsai Administration may have lost a perfect opportunity to separate itself from China, to reassure the US that would have a calm and rational foreign policy, to bolster its southward oriented diplomatic policies, and to begin to distinguish Taiwan from the ROC colonial state. There were a couple of bright spots.

There's a pretty simple filter for deciding what to do in situations like this: imagine what the KMT would do, and then don't do that.

First, the Court of Arbitration at The Hague ruled that the ROC-held island of Itu Aba was not an island but a rock under UNCLOS, along with everything else in the Spratlys. That was a massive defeat for China, which refused to participate in the proceedings.

Tsai immediately dispatched a warship to the island and rejected the verdict of the Tribunal...
“Today [Wednesday], the Kang Ding-class Dyi-huah frigate is to embark on a patrol mission in the South China Sea,” Tsai said in a morning speech to the crew of the frigate. “The mission was moved forward by one day and carries particular significance, as new developments occurred in the region yesterday [Tuesday].”

Tsai said a ruling handed down by the Permanent Court of Arbitration in The Hague, Netherlands, on Tuesday, especially the part pertaining to Itu Aba Island (Taiping Island, 太平島), constituted a severe impairment of the nation’s rights regarding its islands and territorial waters in the South China Sea.

“This frigate represents the Republic of China. The uniforms you wear represent the public’s trust in you,” Tsai said. “As for this mission, it is aimed at demonstrating Taiwanese determination to defend our national interests.”

A paragraph in the court’s ruling states that all of the high-tide features in the Spratly Islands (Nansha Islands, 南沙群島) — which Taiwan claims — including Itu Aba, are legally “rocks” that do not generate an exclusive economic zone or continental shelf.

The government has refused to recognize the ruling and deemed it as having no legal effect on the nation on the grounds that Taiwan was not invited to participate in the arbitration process, nor was it consulted about its opinions.
The Czech East Asian security expert Michal Thim explained the ruling succinctly on Facebook:
To put it simply, Taiwan has sovereignty over Itu Aba, but it cannot utilize sea beyond 12 nautical miles economically without Manila consent.
The Tribunal basically declared that there are no islands capable of generating an EEZ within the South China Sea, including Itu Aba (Taiping Island), held by the ROC. This doesn't mean that Itu Aba isn't an island (it obviously is, there's a runway there). What it means is that under the definition of the UN Convention on the Law of the Sea (UNCLOS), Itu Aba cannot generate an EEZ because it fails to meet the qualification of being able to sustain habitation by human beings. Keep that in mind because you're going to see many stupid memes over the next few weeks on social media...

If you want to claim it can sustain human habitation because it has a spring, I suggest you take a look around the Pacific. As longtime scholar of Taiwan's aboriginal peoples pointed out to me, the ancient peoples of SE Asia spread themselves from Madagascar to Hawaii, but they never set up homes in the Spratlys. Why? Because sustained economic habitation is not possible there. The Tribunal may be right or wrong, but it is not being unreasonable. Without an outside source of supplies, Itu Aba is not habitable.

The Tribunal thus defined what an island is under UNCLOS, which is not only its right but its duty (and something urgently necessary!). Note that the Tribunal, while defining Itu Aba as a rock for the purposes of UNCLOS, did not say Taiwan had no sovereignty over it. What the tribunal did was invalidate the infamous 9 dash line, for good. It also may have invalidated Japanese claims that the Senkakus can generate an EEZ, a problem Taiwan will have to deal with sooner or later.

What it means is that sovereign features in that area like Itu Aba -- all of the rocks, spits, reefs, sandbars, and islands -- alike have no ability to generate an Exclusive Economic Zone (EEZ) out to 200 nautical miles, and are restricted to a 12 nautical mile zone around each feature. The remaining waters lie within the EEZs of Vietnam, Malaysia, Brunei, Indonesia, and Philippines. This means that (for example) Philippines can declare an EEZ over much of the area. To use resources from that area outside the 12 nm limit, nations will need permission of the EEZ owner. An EEZ allows ships to transit for research, military, and commercial purposes, but only the owner can access the resources.

The Tsai government responded to that by differentiating itself from China on two key points: it agreed internally to stop talking about the 9 dash line and the "historical waters" nonsense...
President Tsai Ing-wen’s (蔡英文) administration has reached an internal resolution on Taiwan’s territorial claims over the South China Sea, which stresses the nation’s sovereignty over islands in the area, but makes no mention of the so-called “U-shaped line” and “historical waters,” a Presidential Office source said yesterday.
This was a huge advance, and a good way to separate from China. Gerrit van der Wees pointed out in the Diplomat that China's version of that dashed line includes Taiwan. So there's a bright spot there...

Tsai's reaction was deplored in all quarters, showing the many constraints on her actions: there's little she could have done without making the majority of people angry. The pan-Blues felt it didn't go far enough. US pundits felt it was a great error, and I heard privately that some US observers were angered that Taiwan was hurting the Philippines. Many of us felt Tsai ought to have used the 1992 Consensus approach: "We respect the ruling of the Tribunal Yadda yadda" and taken a low key, all-in-a-day's work approach.

The Blue camp editorialized against the decision, saying it was a US orchestrated decision to hurt Taiwan. That's madness, but the appearance of Tsai herself on a frigate looking determined was certain to stoke Taiwan nationalist feelings and it is not a good idea to mix Taiwanese and ROC nationalism. That has been a long-standing goal of the KMT. Tsai should have sent the frigate later in the week, emphasizing the ho-hum nature of an ordinary patrol. Instead the heightened response sent the wrong message to states around the South China Sea that Taiwan is courting. Not a wise move.

Tsai could also have gently raised UN issue to rally the populace and refocus the debate away from the sovereignty issue and back to a real problem, Taiwan's international isolation. She could have said: "We would love to comply with the Tribunal's ruling under UNCLOS but, shucks, we are not in the UN. Shame, ain't it?" This was especially possible since the Tribunal had referred to the government as the "Taiwan Authority of China"...

The hostility towards the ruling in Taiwan is stupid and short-sighted (imagine if the court had sided with China and declared the 9 dash line valid -- would Taiwan have been better off? No! As a longtime observer put it, Taiwan ought to be thanking Philippines for bringing the case in the first place.

Much of the discussion on Taiwan as a post-colonial society focuses on domestic issues of transitional justice, such as the Red Cross (which came up this week with legislation removing its favored status) and KMT assets. But every state in a post-colonial transition faces this problem: given that out territory is the invention of our colonial master in agreement with other faraway colonial states, and inherited from that master, what is our territory?  Itu Aba/Taiping Island is the kind of leftover post-colonial sovereignty issue that many former colonial states confront, from monumental cases like the India-Pakistan problem to little problems few have heard of, like Swain Island.

In the Taiwan case this is a special problem, since the ROC is a shell that keeps China from attacking Taiwan. I expect that sooner or later Taiwan will have to give up its ROC territorial claims (like Mongolia!), especially the Senkakus. It would be a good idea if the Administration had a more well thought out response next time.

UPDATES: ROC has never claimed an EEZ based on Taiping.

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Thursday, July 14, 2016



Still reviewing all sorts of SCS stuff...but have a few links for the nonce...
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Sunday, July 10, 2016

The Economy slumps as tourism rises

Eva and I beat the heat the other day with a midday soak in a local creek

The Transportation Minister said Taiwan posted fewer tourists from China in June...
Transportation Minister Ho Chen Tan (賀陳旦) said Thursday that the number of Chinese tourists visiting Taiwan in June posted a bigger year-on-year drop than in May, although the country received more foreign travelers in the two-month period compared with the same period of last year.
The June numbers are not yet publicly available. Last week the Taiwan Affairs Office of China said that it had not handed down orders to reduce tourists to Taiwan....
It has been widely rumored that Beijing would prohibit Mainland tourists from visiting Taiwan starting July 20. When asked about the rumors, Zhang Zhijung (張志軍), director of the Mainland’s Taiwan Affairs Office (TAO), stated that such rumors were groundless, adding that “The decline in the number of Mainland tourists visiting Taiwan is probably owing to the current ‘atmospherics’ across the Taiwan Strait. Mainland people choose their travel destination on their own. The TAO will not interfere in their choice of travel destinations.”

Zhang stressed that the Mainland side had never set a quota to restrict the number of Mainland tourists visiting Taiwan, adding that it was Taiwan that unilaterally set quotas.
The June stats are not out yet. It is good news for the nation both economically and politically that Chinese tourist numbers are falling off and other more desirable tourist numbers are rising.

Tourism is a tiny part of the economy. What about exports? Lately the media has been on about falling exports. What are the numbers? Total export value and growth rate (year on year, I believe)(source). When the papers report "17th straight month" of falling exports, they are using year on year numbers. As you can see, exports are downtrending but fluctuating.

25,093,167,522  +3.308
19,846,524,741   -6.729
25,257,614,142  -8.94
23,482,016,800  -11.702
25,625,558,387  -3.859
23,054,269,944  -13.958
23,517,096,287  -12.05
23,894,495,087  -14.882
22,528,258,864  -14.682
23,923,758,897  -11.003
22,113,120,107  -16.988
22,047,978,975  -13.903
22,191,177,910  -11.565
17,755,023,168  -10.538
22,720,429,087  -10.045
22,243,697,684  -5.273

The Bureau of Foreign Trade says we're looking grim, with less trade than last year, and 2015 already lower than 2014. Ma's tying of our economy to China was an economic disaster for the island -- eight wasted years. What a shame.

What is masking the falling exports? Rising trade surpluses. Our trade surplus exhibited yuge growth in 2015...

2014 39,669,895,225
2015 51,768,356,740's down a little year on year, but it was $16 billion in Q1, which augers well for the rest of the year.

Economic growth will be crappy this year. Back in February expectations peaked at 1.47%, now they are down around 1%. TIER has more complete numbers here. But a key point for politics...
The salary on average in April stood at NT$ 43,560 or 0.73% less compared with the averaged salary in March this year.
...salaries continue to stagnate as inflation continues to drive up prices. That will hurt Tsai Ing-wen's approval ratings.
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