The Ma Dilemma in Foreign Relations: "If Taiwan can have better relations with China..."

There's a new democratic wind blowing in Paraguay, and according to a report in the Paraguayan paper La Nacion and a recent Taiwan News editorial, things in Paraguay are looking grim for Taiwan (Espanol to Ingles translation by Google):

Taiwan announced today that it will strengthen its communications with the Paraguayan president-elect, former Catholic Bishop Fernando Lugo, with the objective of maintaining the more than 50 years of relations between Taipei and Asuncion, according to a dispatch from the agency Deutsche Presse.

"We have spoken with the president-elect, Fernando Lugo, on the long and close relationship between Paraguay and Taiwan before and after the presidential election in Paraguay," said Foreign Ministry spokesman Taiwanese, Phoebe Yeh.

"We will continue to communicate with him and other relevant authorities, with the hope that Paraguay does not sacrifice the interests of Taiwan to develop relations with other countries," he added.

His comments come one day after he Lugo said at a press conference that Paraguay can not turn a deaf ear to growing calls from both the parliament and Paraguayan society in favour of establishing diplomatic relations with China.

Taiwan News put the implications of this development into perspective with an excellent editorial that can be summed up by the rhetorical comment of the Paraguayan President-elect, from a coalition that:

Ironically, Lugo also cited as a justification for this position the signs that ties between Taiwan and the PRC will warm up after Ma himself is inaugurated on May 20, saying that "If Taiwan can have relations with China, why can't we?"

The editorial goes on to note:

Taiwan's first post-martial law president Lee Teng-hui of the KMT also curried favor with Paraguay's post-dictatorship Colorado rulers and granted loans of US$400 million and drew up unrealized plans to establish an export-processing zone for Taiwanese investors and other "checkbook" moves out of fear of losing ties with Asuncion.

While the DPP government has reoriented Taiwan's aid programs away from blanket "loans" to case-by-case assistance for grassroots projects for low-cost housing, agricultural assistance, education orphanages and other grassroots projects, the long obsession of Taiwan diplomats in Asuncion with ties with the ruling elite has made it impossible for Taipei to shake the image of being an "accomplice" of the "corrupt" Colorado regime.

Indeed, Lugo himself stated repeatedly during his campaign that Paraguay must throw off the international image of having been "bought out" by Taiwan for nearly six decades and sharply attacked Duarte for using Taiwan's assistance in social construction to "bribe" voters.

Chen has succeeded in retaining ties with leftwing governments in Nicaragua and Guatemala based on grassroots assistance, shared commitments for human rights and democracy and the growing concerns of Latin American progressives that the PRC is becoming a new imperialist power, but most progressive forces and Paraguayan citizens remain unaware that of Taiwan's own "change of skies" from the KMT to the center-left DPP eight years ago.

But Lugo's declaration shows these arguments may lose such of their persuasive power with the imminent restoration of the conservative party of Chiang Kai-shek.

Moreover, Ma's rash decision to allow KMT vice-president elect Vincent Siew meet with PRC State Chairman Hu Jintao at the Boao Forum earlier this month and Ma's unthinking and unfair blanket characterization of DPP foreign affairs work as "checkbook diplomacy" are further endangering our ties with Asuncion and threaten to have a grave "domino effect" on Taiwan's international position.

Whether Paraguay's new government ultimately chooses to switch from Taipei to Beijing will become an early test of whether Ma's strategy of putting priority on cross-strait relations with Beijing will lead to a genuine "diplomatic truce" or the effective surrender of our foreign relations and our remaining international space as an democratic independent state.

This editorial neatly lays out the problem that Ma, who was acquitted by the Supremes today in the case involving embezzlement of state funds which he had appropriated for his own use, poses for Taiwan's foreign policy. If Ma really does stop "dollar diplomacy" then Taiwan has little hope for recognition by any nation -- which is probably his underlying intention. Alternatively, Ma's real intention is to continue the dollar diplomacy but simply claim he is not.

[Taiwan]

Week of Parties

It was a week of parties for me last week that began at the train station in Taoyuan. I had bounced up there to attend the Thai New Year celebration being held in the stadium there, at the invitation of my friend Michael K, AKA the Bushman, who was playing with a Thai band that day. Unfortunately it was a crappy, overcast day, not good for picture-taking.

Just another slow Sunday morn in Taoyuan.

Seen at a small temple as I walked the short ten minutes between the train station and the stadium.

As I arrived at the stadium, participants in the day's activities were busy readying themselves...

....and snapping the views.

Also setting up were vendors, who laid in stocks of delicious Thai sausage for the coming horde.

A smiling young woman oversees the offerings.

A pair of women wait for the procession to begin.

The crowd settles down on these plastic sheets -- but why?

Preparing snacks.

A small area for worship was erected.

Everyone shall have their 15 minutes....

Thais came from all over Taiwan to participate. Most appeared to be here as indentured servants guest workers.

The condition of the stadium, with peeling paint and shabby concrete, was just pathetic.

The monks came by the seated crowd and collected offerings of food and flowers.

A number of local service organizations set up booths, including the Taoyuan county government, the Buddhist charity organization Tz Chi, and the government-run legal aid society.

Meanwhile, up on stage, Michael was getting ready.

Thais crowd the food stalls.

Finally the warm-up band came out. The lead singer, a young woman, had apparently never sung in front of a large crowd before, and retained the glum look of well-controlled stark raving terror throughout the performance.

Backstage performers waited their turn.

The stadium slowly filled. By lunch there were probably 10-15,000 people in attendance.

Michael makes some last-minute adjustments.

A wonderfully happy procession of celebrating Thais paraded around the stadium.

Powdering is traditional for New Year's.

Michael rocks the crowd with a shout of "Happy New Year" in Thai. Michael graciously permitted me to come up on stage.

The first number.

Elvis lives!

The lead singer pours his heart into his music.

The crowd goes wild.

Backstage a performer says hello.

After the show everyone stood around taking pictures of themselves.

The hose is ready. After the next round of speeches, the crowd was sprayed with water from the firehose, a traditional blessing of some kind. Not wanting my expensive electronics to be so blessed, we gave that round of the festivities a pass.

The emcee throws out prizes to the crowd.

After the performance, the band had lunch.

At the other end of the week, on Saturday, Taichung had its annual chili cook-off, a big expat party. This year there were many entrants, who had a chance only because my man Karl forgot to set his alarm and thus didn't have his entry ready. Pictured is one of the many bands entertaining the crowd.

Gilbert shows off his entry. As you can see by studying the crowd, I was way overdressed for the occasion. For example, I was wearing socks.

Testing the chili.

The Red Cross offered vegetarian chili, which is rather like touting alcohol-free whiskey.

One of the best entrants, Chris from Colorado on the left. One problem everyone faced was cooking chili in a nation of thin-walled pots. For many entrants, the dominant flavor was that of carbonized beans...

Karl judges an offering.

At the contest I had the very great pleasure of meeting Sean Reilly of The Gentle Rant, the James Dean lookalike on the left. On the right is the famous Boston Paul (camera).

One of my former students, Becky, stopped by to inform me that she was heading to Australia for further study, no doubt to the joy of every red-blooded bachelor in Oz.

Mark Forman, the BBluesman, snapped Karl and myself in conversation...

[Taiwan]

Kitty Hawkin' France

Last year China offered us L'Affaire Kitty Hawk (my long blogpost). Readers may recall that China had denied the US carrier Kitty Hawk entry into Hong Kong port for a normal Thanksgiving visit, an event followed by truculent explanations, but which in the end appeared to be a communciations eff-up. About the same time it also denied two US minesweepers entry into Hong Kong during a storm, a far more serious affront to the laws of the sea.

What many observers felt was strange was China's abuse of the US Navy, because the Navy had done its level best to get along with the Chinese, treating them better than almost any other branch of the US government. Chris Nelson of the Nelson Report observed at the time: "... China has had NO better friend, in terms of adult supervision of the relationship, than the US Navy."

The fact is that there is nothing strange about this behavior; it is perfectly normal. Let's expand on what I noted last year:

Anyone who has observed China's relations with the outside world for any length of time has seen this pattern again and again. In the midst of negotiations with the Vatican, it consecrates two bishops for the state Church. In the midst of negotiations over the Olympic Torch coming to Taiwan, it denies a visa to the representative of the city of Kaohsiung to discuss the games to be held there in 2009. Arriving in India for negotiations, its ambassador announces a whole Indian state is part of China. Last year the Chinese government shut down an expat magazine in China that was widely considered the most sympathetic and supportive expat rag in that nation. After attending the ASEAN meeting in November where it has positive interactions with ASEAN members, it immediately goes out and holds war games in waters disputed by those nations, without informing them. And of course China gets the Olympics with promises to upgrade its rights situation, yet crackdowns on the internet and journalists intensify, while state security arrests double. Catch the pattern?

Now it's France's turn to be thanked for its hard work on behalf of China. Frankly I think it is wonderful that the Chinese are attacking France. France has been the one nation that has consistently supported China, emphasizing its "special relationship" and repeatedly arguing that the EU should break the weapons embargo caused by Tiananmen. It's hard to know who to laugh at more here, the Chinese for protesting against one of their best friends, or France for imagining that friendship with China would ever be reciprocated. Welcome to China France -- you've been Kitty Hawked!

Of course, the spectre of Kitty Hawkin' also raises the question of what China will do to Ma Ying-jeou after he sucks up to Beijing.

Sadly, some of the amusing aspects of this affair faded yesterday as a westerner was attacked outside a Carrefour there for the crime of being a westerner. Let's hope it was just an isolated thing.

The protests raise another issue: that of the economy. In the public mind Tiananmen is popularly linked with democracy protests though the issue is surely more complex than that, but that year, even though official figures showed comfortable economic growth, the reality was that there was a recession and local incomes shrank. No wonder there were protests. I'm curious whether what is happening with the outwardly-focused protests is an example of displaced anger that otherwise might be focused on the government for rising food prices, especially given China's wildly unequal distribution of income....

[Taiwan] [China] [Kitty Hawk] [France]

Fun With National Geographic Maps!

(pic courtesy of Craig Ferguson)

Yesterday some of you probably noticed a post on the China map in the recent National Geographic issue that I took down. What happened was that my good friend Danny Bloom sent me an email saying that Nat Geo had colored Taiwan and China the same color in the map in the May issue of National Geographic, on China. So I put up Danny's note and several people wrote in to protest.

Then a comment on my blog averred that there was a disclaimer on the map, which Danny hadn't mentioned -- as shown above. I took the post down until I could resolve the issue. Further emails were exchanged -- and it turned out that there were two maps in the issue, one with the disclaimer pictured above, one without. After discussion with the National Geographic editor, we discovered that two different divisions of the Society had prepared the maps, one with the disclaimer, the other without. Confusion resolved! Well, confusion at our end, anyway...

The truly interesting thing was not the map confusion, but two comments made by the editor in one of his letters. First, he (and others at the Society) apparently believe that the US position is that Taiwan is part of China. The fact is that the US position, reiterated last year when UN Sec-Gen Ban rejected the letter from Chen Shui-bian applying for Taiwan's entry into the UN under the name Taiwan, is that the status of Taiwan is undetermined. It has been that way now since the San Francisco Peace Treaty was signed in 1951 (see my blogpost on the UN letter).

Another remark of his observed that with the election of Ma, Taiwan is not likely to be pursuing independence soon. Many editors around the globe are going to come to similar conclusions, and getting them to change their presentations on Taiwan to a more neutral position is going to be even more difficult.

[Taiwan]

China's Expanding Presence in South America

My bud Joel Haas alerted me to this article in El Pais in Spain on China's backing of bonds for sports arenas, funding of festivals, and other influence buying activities in Central America. This is exactly the same dollar diplomacy that is happening in the South Pacific.....

Ahora la presencia china chispea como una luz amarilla que cada cierto tiempo se enciende y recuerda que ahí está, que importa. La donación de 20 millones de dólares para los damnificados por las lluvias, el obsequio de un nuevo estadio de fútbol valorado en 73 millones de dólares, la compra de bonos del Estado con cifras ocultas, promesas comerciales, planes en el sector petrolero y comedidas posiciones políticas en temas chinos conflictivos, como el del Tíbet, han sido las primeras muestras de la relación con Costa Rica, con la cual China ha pretendido colarse en la única región del mundo donde carecía de aliados diplomáticos. Tras tocar la economía, la política y hasta el fútbol, las artes fueron la más reciente plataforma de presencia china, al ser el gigante oriental el país invitado en el FIA que organiza el Gobierno costarricense.

Don't read Spanish? That's why they invented GoogleTranslation:

Now the Chinese presence sparks as a yellow light that flashes every so often and recalled that there is, that matters. The donation of $ 20 million for those affected by the rains, the gift of a new football stadium valued at $ 73 million, the purchase of bonds with hidden figures, promises business plans in the oil sector and nuanced positions Chinese conflicting policies on issues such as Tibet, were the first samples of the relationship with Costa Rica, with which China has sought colarse in the only region in the world where lacked diplomatic allies. After handling the economy, politics and even football, the arts were the latest platform Chinese presence, as the giant Eastern country invited in the FIA organised by the Costa Rican government.

Like Taiwan, China cultivates Cental American nations because some of them have Free Trade Agreements with the US, and so are useful to pipeline exports through. China and Costa Rica were talking about a free trade agreement earlier this year (don't know if it was completed). After the Yanqui imperialists, China is Costa Rica's number 2 trading partner.

With Bush falling victim to one of the classic blunders -- the most famous is: "Never get involved in a land war in Asia" -- the US seems to lack the drive to counter China's expanding influence.

[Taiwan]

Asia Times on DPP Rebuilding Effort

Cindy Sui at Asia Times offers a well-written article on the post-election woes of the DPP:

How things got this bad is a question many DPP members are asking lately. Coming to terms with the answers, however, won't be easy for a party which rose from humble beginnings - it was founded in 1986 by family members and defense lawyers of political prisoners during the KMT's authoritarian rule - and quickly grew from being technically illegal until 1991 to the ruling party in 2000, ending more than half a century of KMT rule.

"There are many reasons for the party's failures, but to me the biggest reasons are lack of internal coherence and failure to deliver on policy promises," Lai said.

Supporters, including those who remember and appreciate the DPP's heyday of fighting for democracy and social welfare, became disillusioned after they re-elected Chen for a second term as president in 2004 and did not see results from his administration, or the DPP, on promises to take back illegally obtained KMT party assets, root out corruption and streamline the government.

Corruption involving DPP party officials, especially alleged embezzlement and insider trading by Chen's family, turned off many supporters. The DPP argues that corruption during KMT rule was much worse, but the people expected better, Lai and others said.

Supporters also lost interest in one of the party's main causes - promoting Taiwan's independence from China, which still claims the island as part of its territory. People preferred the party focus instead on issues that had a direct impact on their lives - especially creating jobs and boosting incomes.

Young voters in particular increasingly supported the rival KMT, seeing it as the party of the future and hope, much like the way they saw the DPP back in 2000 when Chen was elected as Taiwan's first non-KMT president.

The ideas expressed in the article tend to cohere with what I've been hearing -- "the party lost touch with the people" is a common remark. On Sunday I had the good fortune to attend a meeting of future DPP Taichung Mayoral candidate Lin Chia-lung and Taichungers who wanted their views known. The party is willing to listen...but is it willing to learn? Only time will tell.

[Taiwan]

WSJ-Asia:Taiwan Airlines to benefit from Direct Flights?

I've been kvetching recently about the tendency to view the China-Taiwan economic relationship in cargo-cult terms, and here today the Asian edition of the Wall Street Journal carried an article today cautioning investors on exaggerating the effects of direct flights (link is behind a pay wall):

[Analysts] believe that even if direct China-Taiwan air links materialize -- the main hope behind the stocks' rise -- the airlines wouldn't benefit much.

This would hold true even in the most optimistic of scenarios, such as a doubling of traffic.

"Our calculations indicate that direct passenger links are only worth around NT$1 a share for both [Taiwanese] carriers," Merrill Lynch analyst Paul Dewberry wrote in a recent report. "In addition to susbstantial cannibalization of the Hong Kong route, the airlines will face stiff competition from Chinese carriers as well as suffer less-efficient use of assets."

The issue is still politics, though of a different nature. The distribution of the main revenue generator, destinations, is going to be based on negotiations. In fact, analysts point out, because direct links are verboten at present, Taiwan airlines are somewhat insulated from competition (Chinese competition, anyway). Since routes will be negotiated reciprocally, this means that all routes will be subject to (tough) competition from Chinese airlines. The analysts argue that even assuming that passenger traffic doubles to 16 million annually by 2012, up from 8 million currently between Taipei and Hong Kong (often claimed to be the busiest route on earth), China Airlines and Eva may at most carve out a 20% share of this market. Both airlines lost money last year, with China Airlines racking up a record deficit, attributable in part to rising fuel costs. These fundamentals, high fuel prices and competition, aren't going to change when direct flights happen.

Nor do analysts expect Chinese airlines to derive any great benefit. Airlines that are currently minting money on the ban on direct flights, like Air Macau and Cathy Pacific, can expect their share to plummet as up to 70% of passengers are expected to switch. Not mentioned is what will happen to Hong Kong's economy when many who might have stopped over for a day, switch to direct flights....

[Taiwan]

Inflated Expectations

Taiwan and China are back together exploring for oil in the Taiwan Straits, according to recent news reports. And United Daily News (UDN), a paper tightly linked to the KMT, reported that Hu of China had invited President-elect Ma to China for talks. The Olympics is going to make a great backdrop to the visit that Ma promised he wouldn't be making...though KMT officials themselves dismissed such talk. Direct flights aren't expected until next year. Whatever the inflated expectations of some, reality is expected to move more slowly...

...but not prices. Sticker shock: went to our usual volume retailer the other day, only to find that the bag of wheat flour we used to buy for $38 is now $53. Gasoline is outrageous -- we take scooters everywhere now. Imported stuff is skyrocketing -- brie I used to enjoy at $99 is now $189, cheap smoked processed cheese from Germany rose from $125 to $165 at the local supermarket. The Central bank said inflation was near 4% in both Feb and March of this year...

One solution to the problem of inflation is to let the NT dollar gain in value. For most of the ROC's brief existence on Taiwan the NT dollar has been more or less pegged to the US dollar. Indeed, last week Goldman Sachs predicted the NT would continue to rise:

The New Taiwan dollar may advance to an 11-year high in six months as the central bank allows further gains to stem inflation, Goldman Sachs Group Inc said, raising its forecast for the currency.

The NT dollar may strengthen 6.3 percent to NT$28.5, the world’s biggest securities firm said, revising its earlier forecast of NT$30.50. The currency has advanced 6.4 percent in the past three months, the best among 10 most-active currencies in Asia outside Japan.

“The central bank will likely utilize currency appreciation as another policy tool in combating imported inflation,” Goldman’s research team led by London-based Jim O’Neill wrote in a monthly global report received by Bloomberg today. “The interest-rate differential vis-a-vis the US dollar has become more favorable.”

Letting NT rise would be a quick way to increase the purchasing power of Taiwanese and enable locals to feel they have more money in their pockets. It would make imported goods cheaper. The negative side, of course, is that it makes Taiwan goods more expensive in world markets, forcing exporters to slash costs or move. It also has another pernicious effect, noted last week in a long commentary in the Taipei Times:

Even more serious is that when the nation’s currency appreciates against the US dollar, government and private assets denominated in US dollars suffer from exchange loss with their decrease in value.

Inflation may well become the number 1 challenge for the incoming Ma administration, since the current government has announced that price freezes on gas and electricity will be lifted on May 20, the day Ma is sworn in.

[Taiwan]