Traveling....

Hit Taipei this week.....was massively busy. Had dinner with Prince Roy and finally met the amazing Poagao, whose blog and photo talents I've envied for quite some time. Despite both of us being here for years, we've never actually met. Stayed with a friend in Keelung and "partied" there in a music bar on Wednesday night in what must surely be the deadest large city on the whole island: on Wednesday night the bars were mostly closed. Very enjoyable time.

I need suggestions...after a string of lost file attachments and much wasted time, I've decided Yahoo.com is no longer reliable and I need to switch. What web-based free email should I switch to?

I'm doing a spot of traveling, so expect light blogging the next four days. Hope you all have a good weekend.

Mad Chen Is In The House!

ULCA journalism professor Tom Plate's newest piece on Chen Shui-ban shows, once again, how westerners writing on Taiwan simply do not get it with an appallingly slanted, fact-free discussion of Chen Shui-bian and Taiwan. Plate's article is an excellent illustration of how Beijing's propaganda lines have become the basis of Establishment media discourse on Taiwan. No wonder President Chen gets so exasperated with the media.

Los Angeles --- Seven years ago the man was elected handily by the people and became the first member of his party to become president -- and only the second truly elected president in Taiwan's short history as a democracy.

Elected handily: substantively misrepresents events. Chen won a plurality of 39%, not "handily". He was elected only because the pro-China side split its forces. He won with a thin majority in the second election.

But somewhere in the dank confusion and disarray of his second term, Chen Shui-bian -- no longer the charmer of the Democratic Progressive Party -- woke up one morning and discovered he had been transformed into something like a political insect.

How else to describe a man whose political approval ratings now barely notch up into double figures, whose wife is on trial for corruption and whose son-in-law also stands accused of corruption? One prosecutor has said publicly that Chen himself is protected from indictment only because of the office he holds.

political insect: people complain about Chen. But he campaigned in Kaohsiung for DPP candidate Chen Chu, who won, having no discernible negative effect on the outcome. It's important to realize in Taiwan the disjunct between what people say and how they behave is vast. UPDATE: I've removed some comments as it seems I missed Plate's attempt at a Kafka comparison.

son-in-law accused of corruption: once again, the foreign media seems unable to discover relevant facts about Taiwan. Chen's son-in-law Chao Chien-ming got six years for insider trading in December. It's no longer an accusation.

political approval ratings now barely notch up into double figures: Plate seems blissfully unaware of the routine misrepresentations of reality in Taiwan's media. Anyone who followed the last election, where the Chinese-owned TVBS had Chen Chu losing in Kaohsiung by 20 points, knows perfectly well how hopeless the local media polls are. Here are the numbers from the recent mayoral election in Kaohsiung:

Liberty Times (12/5): Huang Jun-yin (34.38%) versus Chen Chu (34.09%)
China Times (12/4): Huang Jun-yin (43%) versus Chen Chu (29%)
TVBS (12/3-12/4): Huang Jun-yin (51%) versus Chen Chu (31%)
United Daily News (12/2): Huang Jun-yin (39%) versus Chen Chu (27%)
Era TV (11/26-11/27): Huang Jun-yin (41%) versus Chen Chu (26%)
ETTV (11/24): Huang Jun-yin (41%) versus Chen Chu (29%)

In other words, the Blue polls all had the KMT candidate winning massively -- but in reality, he lost by a point. It may come as a shock, but no methodologically sound, nuetral poll exists to tell us how far support for Chen has plummented, or even whether it has fallen at all. Recall that in the most recent practical demonstration of support for the DPP, the DPP won in Kaohsiung, and performed much higher than expected in Taipei. In short, people in Taiwan may well take into account the fact that the prosecutions of the Chen Familiy are entirely political in nature -- that Chen's accusers are themselves hugely corrupt.

Consider, as the China Post reported the other day, the very legislators kvetching about Chen made millions on sweetheart deals with major corporations, using methods that were less than kosher....

At its inception in May 2000, Asia Pacific Broadband Wireless was named Eastern Broadband.

The Wang family issued stock slips, instead of formal securities certificates, at a selling price of NT$10 per share to raise fund.

Between 60 and 90 percent of legislators of all political parties had snapped up the stock slips at various costs depending on each lawmaker's financial standing and political clout.

Many lawmakers used their influence to raise loans from financial institutions to purchase the slips for quick profits.

Market prices of the slips once rose to NT$16 or NT$17 per share and some even to more than NT$20 a share.

Most members of the Legislative Yuan, their assistants, and even some reporters covering the parliament were believed to have built up their hoarding of the share slips.

Some more financially savvy legislators managed to sell off their holdings for quick profits.

But many others suffered heavy losses because they continued building up their holdings in anticipation of the advent of the new 3G telecom era.

But we can't expect the foreign media to present any of this stuff -- that requires knowledge of the terrain, some sensivity to the complexity of the issues, willingness to inform readers that it isn't easy to understand, and so on.

I threw all this at Taiwan's embattled president the other night as he was passing through Los Angeles International Airport on his way back to Taipei. We sat in a small conference room with a few of his aides and a small group of scholars. The conversation flowed surprisingly easily. Chen had made a special effort to meet with us and if it had not been for the need to jump back on the charter flight home, he might have stayed much longer. It seemed as if there were a few things he really wanted to get off his chest.

In fact, Chen took a strikingly aggressive approach to the cascade of attacks on him, whether coming from within Taiwan or abroad. He quickly dismissed his domestic critics with a scoffing hand wave, calling them all politically motivated; but when the subject came up of Taiwan's fiercely commercial -- and partisan -- news media, Taiwan's president turns into a veritable scorpion of rage.

scorpion of rage: What can one say? Why the need to call the president an insect and a scorpion? Sure the President is enraged. The venality and unscrupulousness of Taiwan's media is regularly discussed throughout the island and abroad -- including in the pages of Asia Media.

calling them all politically motivated: Is Plate seriously thinking that Chen's critics are not politically motivated? Chen's attackers are largely the people who have been hacking on him throughout his long career as a human rights lawyer, legislator, mayor, and now President. They consist largely of pro-China politicians and their lackeys and fellow travelers, plus a few dupes.

Chen charged that the Taiwan media fakes public-opinion poll results, misleads the outside world about Taiwan and poisons the national atmosphere. "Even our judiciary is led astray by our media," he charged, adding: "Our media consists of reporters without borders!"

Such media overkill plays into the hands of the enemies of an independent Taiwan, the president argued, which includes, to be sure, China: "Eventual unification can't be the only conclusion, it can't be the only option for us. Unlike our opponents [the Kuomintang, or KMT], we do not say, there is a certain outcome..."

But the issue is emphatically raised of whether Chen's outspoken advocacy of a political future for Taiwan pointedly that excludes the mainland may unintentionally put his island of 23 million in harm's way. After all, China, with 1.3 billion people and a growing military, has repeatedly and consistently claimed that it would be an act of war were Taipei to declare formal state independence that would effectively preclude eventual mainland integration.

Chen charged that the Taiwan media fakes public-opinion poll results: No need to write "charged" here. Media polling results in Taiwan are substantively bogus -- in fact, the Gallup Poll in Taiwan is a fraudulent poll -- Gallup withdrew the rights to that name 5 years ago but the old owner continued to use it. It's redundant to point out that Plate could at least have acknowledged the reality of fraudulent polls in Taiwan.

Chen's outspoken advocacy of a political future for Taiwan pointedly that excludes the mainland : in an article full of silliness, this one stands out. China (not "the mainland") is not "excluded" from Taiwan's future. It merely will not be able to rule the island. But Chinese will certainly visit, conduct business, and otherwise have all the normal possibilities for involvement that any two sovereign nations enjoy. The idea that independence "excludes" Beijing is pure pro-Chinese propaganda -- while at the same time, validates the historically unsupportable claim that China should have some say in Taiwan's affairs. It's sad to see the way Beijing-think shapes discourse about the island of Taiwan.

Further, Plate's positioning of Chen makes it appear that independence is almost all Chen's idea, as if Chen's advocacy of independence were somehow unusual. But Chen reflects widespread public opinion in support eventual independence in Taiwan (latest polling is showing majority support for it). If Tom Plate would come live here for a while, he would soon find that there are numerous locals who excoriate Chen because he is too moderate on independence, including an entire political party, the TSU.

What's really going is still more Beijing-think infecting the political discourse, through the well known vehicle of Mad Chen ^(TM), "he's so crazed, he could declare independence at any time!" That is the Chinese party line on Chen. The reality is that Chen is a moderate whom the less moderate accuse of merely using independence as a tactic to get votes.

"Sovereignty and the issue of independence belong to the people of Taiwan," he replied, "and is not subject to the jurisdiction of China." Chen adds that his position on the issue of Taiwan's future is actually an advocacy of the status quo. In fact, as he says, Taiwan right now is a de facto state, recognized as such by 20 or so other nations and boasting something like the world's 19th largest economy. The island's average annual income is not far from a comparatively healthy US$30,000 per person, and the measured level of people living in poverty is said to be less than 1 percent. Why would the people of Taiwan want to merge with the mainland if it is doing so well on its own?

That's a fair point, of course, and the answer involves an unpleasant thought. It is that China might well take the question of Taiwan's destiny into its own hands and, one way or the other, seek to force the island to rejoin the mainland in the manner of Hong Kong. The sovereignty of the latter now officially resides in Beijing after the formal handover from London in 1997. The former British colony is now officially termed Hong Kong SAR -- for Special Administrative Region.

Chen's critics worry that by pushing the envelope, the embattled president might just push the mainland into rolling out and revving up the invasion boats. Better to low-key the independence drum-roll if the people of Taiwan want to sleep better at night: At any time Beijing's war of words could turn into a different kind of war altogether.

Better to low-key the independence drum-roll if the people of Taiwan want to sleep better at night: The reason it is so easy to skewer the Establishment media is that the party line never changes, and it always supports Beijing. This claim -- that Mad Chen will doom us all! -- has been the pro forma accusation against Chen since he began to run for President in the 2000 election. It was an important plank in the KMT platform, although it remains a pro-forma claim for the KMT, it is actually the foreign media that is more enthusiastic about the Mad Chen Whose Craziness Will Doom Us All. Apparently they haven't noticed that there hasn't been a war here for the last seven years. Not even close. And do foreign correspondents actually imagine that Chen Shui-bian is unaware of the possibility of Chinese attack?

Ponder an alternate universe, where the interviewer actually asks questions based on knowledge of the island, all the other questions that could have been asked.

He could have mentioned Taiwan's disproportionate contribution to global warming and asked President Chen what Taipei was going to do about it....he could have discussed water policy, foreign labor, the 40% cap on mainland investments, Chen's alleged damage to US-Taiwan relations, Taiwan's growing relations with Japan, China's territorial claims on Taiwan's neighbors and how Taipei plans to exploit them, the recent moves by Vatican to re-enter China....

....etc. There's a lot of questions out there. Instead, Plate regurgitates pro-Beijing propaganda to ask Chen a question that has already been asked a million times before, and for which the answer is already scripted and rehearsed. Not to mention, of course, that merely asking the question serves to reinforce the (pro-Beijing) idea that Chen is unthinkingly radical. Sometimes I wish Chen would answer thusly:

"Mr, President, do you think China might blast Taiwan off the map if you are too radical in your question for independence?"
"Why no, Tom, I've never even thought about it. Thank you and the other foreign correspondents for pointing that out! Whew, that was close! Why, I might have declared independence without even thinking about China! I...I...I... must be mad!"

rejoin mainland in the manner of Hong Kong: The usual errors -- Taiwan was never part of any Chinese state, so it cannot "rejoin" China. May as well claim that it can "rejoin" Holland or Spain....the use of terms like "rejoin" demonstrate clearly how well Beijing controls the discourse on Taiwan. Other correspondents seem to have no trouble finding ways to express China's desire to annex Taiwan without implying that it is a "return." Edward Cody once used the term "absorb" which is marvelously apt, I think.

Bottom line: Taiwan is not "returning" to China because it was never part of China. I know that foreign reporters cannot use the term "annex" but at least they could go for "absorb" or similar.

But the president was completely unmoved by this line of argument. "If I cannot defend the dignity and safety of this country," he replied, "I'm not worthy of holding this job."

was completely unmoved by this line of argument: Hey no kidding, because it's been seven years now and still no Chinese attack. Could it be that China's desire to annex Taiwan has nothing to do either way with Chen's pro-independence propagandizing, and everything to do with waiting for its military to mature and the US position to further weaken both relatively and absolutely.

With impeachment cries seemingly on the wane, that job is presumably his until sometime next year, when his second term formally runs out. That year also headlines Beijing's vaunted Summer Olympics. Once that spectacular is over and Beijing has time to take a good long look across the Taiwan Strait at what it regards as a "rogue state" and "breakaway province," Chen will no longer be in office.

The question, however, is whether the independence web spun by Chen over the last eight years will be too tensile for anyone on the island to take down easily.

independence web spun by Chen:Yes, that's right, it's all Chen. The people of Taiwan are simply passive recipients of the nefarious Mad Chen's independence drive, incapable of their decisions or identities. They never even thought about independence until Chen was elected President. Note also the continuing critter metaphor -- having been presented as an insect and a scorpion, Chen is now a spider spinning webs of independence...

The real question is, whether democracy on the island will be able to consolidate itself, to grow, and to permit the people of the island to choose the kind of future they want -- and of course, whether foreign correspondents will ever acquire the ability to present Taiwan without adopting the language and postures of Beijing, and from a point of view that is infused with some knowledge of the island and its affairs.

A sad piece, especially given the excellent one he wrote on Chen's stopover in LA.

[Taiwan] [US] [China] [Chen Shui-bian] [Japan] [Taiwan Independence]

Versailles, East Asia Style

It's fascinating to sit here in Taiwan under Chinese missiles, with China suppressing Taiwan in every possible way, and listen to China talk about the "humiliation" of the 19th century. That was when other powers imposed treaties on China of the type that China had formerly imposed on nations it dominated. Today China treats Taiwan and Tibet the way it claims other powers treated it during the days of "humiliation" .... but it's OK when China does it.

Actually, those treaties weren't imposed on China, but on the Qing (Ching) Dynasty, a Manchu empire that had swallowed China and other neighboring territories. The "humiliation" of the 19th century is purely a modern fantasy backprojected onto history to justify current Chinese expansion. Arguably in the 19th century there was no "China" to be humiliated.

Will Hutton commented in a piece in the Observer that ran in the Taipei Times today:

Which brings us to Taiwan, which has enormous iconic importance for China in general and the Communist Party in particular. Of all the humiliations suffered during the 19th century, Japan's seizure of Taiwan as a colony in 1895 rankles most.

This is an indefensible rewriting of history. It is quite true that Taiwan has enormous iconic importance for China, but that is entirely the result of 20th century politics, not 19th century "humiliations." The defeat of China by the upstart Japanese, whom they considered inferior, was the major "humiliation" (apparently it is OK to humiliate others by considering them inferior, but not to have them return the favor). Taiwan was not seized but was peacefully handed over to the Japanese, who then had to carry out an invasion and fight many years of guerilla warfare to hang onto the island after pro-Qing rebels established the Republic of Formosa in 1895 (the war that also saw the rise of the Koo family in the island's politics). If China's government was not bound and determined to annex Taiwan today no one would even notice that had been let go "in perpetuity" in 1895 under an internationally recognized treaty whose validity went unchallenged by the Chinese until WWII.

The rest of the article, which discusses the test of the anti-satellite weapon, is dead on...

And the spending is very targeted. China is building up the arsenal it would need to invade Taiwan and hold off an attempt by the US and Japanese to relieve it, igniting one of the world's great flash points. No other explanation is possible.

....but I wish the world's correspondents would quit validating the "victimization" propaganda of China by repeating it.

[Taiwan] [Japan] [China]

Student Dorm in Kyoto causes Taipei-Tokyo-Beijing Friction

The dispute between the real PRC and the virtual ROC on Taiwan continues, like some relic dinosaur living into the Age of Birds, to stir up trouble. In this case, it's time to make the diplomats in Tokyo reach for the Excedrin:

The dispute involves the ownership of the student dormitory, named Kokaryo, which Kyoto University established as an educational facility for Chinese students in a lease deal with a corporation in April 1945, four months before Japan's defeat in World War II.

The Chinese Nationalist government, which fled to Taiwan from the mainland in 1949, purchased the dormitory in 1952 from the Japanese owner.

Taiwan filed a suit with the Kyoto District Court against pro-Beijing students in 1967, seeking a court order to evict them from the dorm.

Japan severed ties with Taiwan and switched its diplomatic allegiance to the mainland in 1972 when the suit was still pending at the district court.

In the 1972 joint statement with China, Japan accepted China's stance that the government in Beijing is the sole legitimate government of China.

In 1977, the district court ruled in the pro-Beijing students' favor, declaring that ownership of the dormitory was transferred to the government in Beijing following Japan's recognition of Beijing as China's government.

The Osaka High Court later sent the case back to the district court, saying the Nationalist government continues to exist, even though its territorial control is limited.

In the retrial, both the district and high courts ruled in Taiwan's favor.

Bejing's quest to annex Taiwan extends even to such mundane items as dorms.

[Taiwan] [Japan] [China]

Adoption, China, and US Racism

A friend of mine passed me a link to the blog Two in Taiwan, the blog of a couple living in Taiwan because they are adopting a child here. In adoption circles recently there has been a huge controversy over a Paula Zahn show on CNN in which the commentators unleashed a flow of stereotypes while discussing the recent changes in adoption laws in China. The nasty bit was here:

MALDONADO: Absolutely. I think we all know that China is a sovereign country. It has the right to place whatever restrictions on foreigners who are seeking to adopt their children that it wants. And adoption is really about supply and demand, and the reality is that there are many more Americans, many more Westerners seeking to adopt children from China than there are children available so the Chinese government can decide to do whatever it wants.

MARTIN: OK, why? What's the big deal with Chinese children? Enlighten me, please, help me out.

ZAHN: You understand this better than anybody. Why don't we see more Americans adopting black foster children?

MARTIN: That's my point. What's the big deal with Chinese children? Why the infatuation?

ZAHN: You think it's something with the color of their skin? Is that what you're driving at?

MARTIN: Maybe they think they can adopt a smart kid that is going to grow up to be a doctor? I don't know. They need to realize that's called training, not just inherent, it will happen when they're born.

Angel, help me out.

MALDONADO: Absolutely. This is something I've been looking into for a long time. Americans have this love affair with girls from China. There is this belief, this perception, irrational as it might be that if you adopt a little girl from China, she's going to be intelligent, she's going to be more lovable.

MARTIN: Like the porcelain doll.

MALDONADO: We definitely see that idea of the beautiful Chinese little girl, as compared to do, they really want to adopt a black boy.

Annie from Two in Taiwan was so incensed she wrote a wonderfully researched letter about the whole mess, excoriating CNN commentators for their lack of knowledge (whoa -- imagine MSM commentators not knowing what they are talking about!)....she observed:

Mr. Uygur implied that Americans are not adopting from Muslim countries due to prejudice. The true reason there are so few adoptions from Muslim countries is the difficulty. Out of 43 countries with a Muslim majority, in 13 countries adoptions are impossible due to Muslim Shari'a law, 3 countries require citizenship to allow adoption, 10 countries require residency periods ranging from 3 months to over 2 years, three of those also require adoptive parents to be Muslim and an additional 2 countries only adopt to Muslim parents. Of the 8 Muslim countries that have no strict requirements, only 2 have US agencies that they work with. Albania has only 2 licensed agencies and 22 children have been adopted from Albania in the past 2 years. Ethiopia is rapidly becoming a country of choice for adoptive families with 1,171 children being adopted from Ethiopia in the past 2 years. For more families to adopt from Muslim countries, adoption must be facilitated in the countries that allow it.

Actually, the lack of adoption is due to prejudice.....prejudice against non-Muslims in Muslim countries....it's a very well written letter that will no doubt cause some reality adjustments on those of us still carrying around the stereotypes. Welcome to Taiwan, guys.

[Taiwan] [China]

Daily Links, Jan 22, 2007

Off to grade and study. Enjoy other people's stuff.

Scott Sommers with an awesome post on testing in Taiwan.

Poagao goes to Dunkin' Donuts. With Pics. Yeah, I noticed the Mr. Donut offerings weren't as sweet either

Pinyin News on the anniversary of the death of Qian Xuantong, the language reformer who argued for abolition of ideographic characters. What? And put all the fortune tellers out of business?

Beautiful Taiwan goes to the Penghu.

UPDATE: Jerome Keating has a wonderful piece on Shih Ming-teh anti-Chen protests. Where did all those "reformers" go?

[Taiwan]

Taiwan Makes Progress in Human Trafficking

In my time here I have met several families who employ "illegal" Filipino maids -- usually runaways from factory slavery or sexual slavery. One maid I met told a horrific tale, so matter of factly that it was entirely believable, of being locked in a room and forced to service numerous customers each day. "But I am so ugly," she said. "I couldn't understand why they would want me. But they did...." Thus it was with a certain personal interest that I read the State Department's plaudits for The Beautiful Isle making progress in human trafficking:

In last year's report, Taiwan was placed on the "Tier 2 Watch List" for failing to show evidence of increased efforts over the past year to address human trafficking, particularly forced labor and sexual servitude among legal Southeast Asian contract workers and brides.

According to the 2007 Interim Assessment, Taiwanese authorities failed to prosecute any offenders for trafficking for forced labor or domestic servitude, despite evidence of a significant problem among the 350,000 Thai, Indonesian, Vietnamese and Filipino workers in Taiwan.

It said Taiwanese authorities failed to make progress in developing a system to identify and protect foreign workers subjected to conditions of forced labor or involuntary servitude.

However, it mentioned significant improvements made by the Council of Labor Affairs (CLA) in policies and regulations governing the terms and conditions of work for foreign laborers in Taiwan.

The sad sick part is paragraph 2 -- NO prosecutions despite widespread abuses. Makes me want to throw up.

The State Department's report is here (scroll down to Taiwan). The report notes:

Taiwan has improved its collaboration with local and international NGOs to protect victims of trafficking, particularly P.R.C. citizens, and some members of its legislature are attempting to pass comprehensive anti-trafficking legislation. However, there continue to be concerns over the treatment of the large number of Vietnamese brides present in Taiwan. Taiwan officials concede that the process for admitting foreign brides is not sufficiently monitored, noting that 47 percent of Vietnamese brides in Taipei county are not living with their Taiwanese husbands. Taiwan also remains a destination for foreign workers. The oversight system for their recruitment and stay in Taiwan is not adequately scrutinized. Twenty thousand of the 350,000 foreign contract workers in Taiwan are "runaways" who have left their site of employment in Taiwan for a variety of reasons, including abuse or conditions of involuntary servitude. Taiwan authorities view most runaways as workers seeking to remain in Taiwan illegally, and therefore treat them as law-breakers, detaining and then deporting them immediately upon capture. Labor rights and anti-trafficking NGOs claim — with detailed accounts — that many of these runaway workers escaped conditions of bonded or forced labor or sexual servitude.

Clearly the System has completely failed the foreign workers. Time for big changes.

I can't let this go, though, without pointing out the high irony of the US, a nation involved in secret kidnappings of individuals in third countries and delivering them to allied non-democracies for torture and abuse -- not to mention the transportation of individuals to Guantanamo -- discussing another nation's human trafficking problems as if it had any moral authority to do so. The arrant hypocrisy of the US not only undermines our position in the world, it undermines democratic principles, and in this case, the principles that enable us to oppose trafficking in human beings.

Guys: Beam. Eye. Cast out.

[Taiwan] [US]

Tom Plate on Chen Visit to the US

Tom Plate, the syndicated columnist who writes on Asia, was present when President Chen swung by LA on his way through the US. He wrote a great column on the visit.....

Word of the unfolding melodrama reaches a secret international VIP waiting-room at a conference area at LAX, where a crowd of pro-Taiwan well-wishers was gathered. Among the supporters included a raft of Taiwanese-American businessmen, pro-Taiwan China scholars and several Los Angeles officials (including LA Mayor Antonio Ramon Villaraigosa) -- not to mention one syndicated newspaper columnist. The tension mounts with speculation about the Presidential party’s arrival and safety.

Up in the air, the China Airlines crew manoeuvres the jetliner far out over the Pacific Ocean so as to avoid Mexican airspace (and an attack by the Mexican air force?), then swings the jumbo jet back eastward for a safe landing. The president’s party hits the Los Angeles tarmac hours late, but deplanes safely into the protective cocoon of American and Taiwanese security teams. As President Chen finally enters the VIP area, the worried crowd releases a collective sigh of relief and erupts into spontaneous and heartfelt applause. The president bows, and then proceeds to shake the hand of everyone present in the large room -- maybe a hundred or so.

One would have thought that Chen would look tired and defeated. But he did not. Instead, this controversial politician whose family had been accused by Taiwan prosecutors of corruption and who personally has been accused by Beijing of provocative "splitism" seemed unruffled, deeply calm and defiant.

It took me a few hours to piece together why he was so happy, why his own personal "Twilight Zone" experience hadn't unnerved him and why he seemed more resilient than ever. The answer is that Chen understands that Taiwan gains whenever Beijing reveals itself as a bully. He knows that a democracy never looks more necessary than when a non-democratic state acts as if it finds democracy threatening. China, by literally trying to force the president's plane out of the air and into some "Twilight Zone" of non-existence, had shown the world that at times it goes too far.

Yep...Taiwan's democracy is an enormous headache for China.

[Taiwan] [US] [China] [Chen Shui-bian]

Daily Links, January 21, 2007

Grades almost done....almost done....

Are Taiwan stars actually involved in prostitution? Next magazine says yes...

A traveler from the Philippines visits Taichung, Cultural City. Luckily for our rep, Chaon, Red A, and AJ were out of town that day.....

David visits Jinguashi. Nice pics.

Dunkin Donuts is here, says Jon. Taiwan Pundit remarks too. Krispy Kreme next?

Marc finds a letter about Taiwan's idiotic visa policies.

The awesomely generous Red A has a new blog. Send him some love.

Michael buys traditional crafts in Thailand.

Cold Goat Eyes blogs on the incredibly revealing spat between the classless UK femme and the brilliant and beautiful Indian actress.

Raj over at Peking Duck asked me today why no one is blogging on the budget mess. Because you already did such a good job, man.

UPDATE: Ok, Raj, here's the real reason: Paul M. Fussell, in probably the best book on WWII ever written, Wartime, observed that the horrors of WWII were so great that a generation of writers were impelled to silence, that writing on the war required overcoming a powerful urge to say nothing. Well, looking at the budget and legislative fiasco this fall, I totally understand. Taiwan News says it all:

As a result of bitter partisan rivalry, the Legislature passed only 55 bills this session.

[Taiwan]

Academic Expert: Taiwan should build its own subs

As the controversial arms purchase drags into its third year of debate, many experts have been saying quietly that Taiwan should simply go ahead and build its own conventional submarines. This week defense expert Bernard Cole weighed in on the issues.

Bernard Cole, a professor at the National War College in Washing-ton, made his comments to Taiwan reporters after a speech in which he advised the Legislative Yuan to drop its debate on the purchase of three advanced weapons systems offered by the US, and instead pay more attention to the "mundane" military needs that will help deter any Chinese military attack on Taiwan.

"I would encourage Taiwan to begin an indigenous program to begin producing conventional-powered submarines," Cole told the reporters.

"Given the advanced state of Taiwan's electronics industry and its shipbuilding industry, I find it hard to believe that over the course of eight to ten years that Taiwan cannot produce an operational submarine."

"Many elements would have to be imported, such as periscopes and battery technology, but I believe that technology is available on world markets," he said.

The price of the submarines that the US is offering Taiwan is roughly three times the world market price, coming to $12 billion for the package of eight submarines. This pricing policy was driven by the internal politics of US weapons procurement rather than by any need on Taiwan's part or by the low number of units in the order. As a US defense expert put it:

Then, there is nothing that made me angrier than the stunt they pulled on the submarine issue. In this case, while castigating the KMT, DPP, or whoever for not taking defense seriously and not passing the special budget, the Pentagon, especially the dominant factions of the US Navy, with at least the implicit consent of Rumsfeld, was working to undermine the deal by making it such a bitter pill to swallow. I have heard some ex-State and White House people they couldn't believe that Rumsfeld was allowed to get away with undermining a Presidential-level assurance to assist Taiwan in its acquisition of diesel electric submarines.

There was, and continues to be, a lot more to this defense budget issue than meets the eye. For example, 130 out 225 LY [Legislative Yuan, Taiwan's Congress - MT] members, in a petition to CSB, said in clear terms that if there is no local role in the program, then they wouldn't pass the budget. This was 2002. Then, in 2004, Rumsfeld's office, in a move approved at the Deputy Secretary level, sends a letter to the Minister of Defense saying there will be no role for Taiwan industry in the program. Plus, forcing the LY to appropriate the full US $11.7 billion budget, before even knowing what design would be involved, runs counter to US defense acquisition regulations (Congress only appropriates funds for construction after certain milestones have been met, such as a critical design review).

The submarine program, which to me is the #1 priority for deterring PRC military action, is continuing to be choked until today. After a great campaign by Rob Simmons (R-CT), Pat Kennedy (D-RI), and a few others, it forced the Pentagon to play fair by adhering to US Federal acquisition regulations and breaking it into phases. However, the Pentagon, supposedly Taiwan's best friends, denied Taiwan any intellectual property rights to the design, despite Taiwan taxpayers paying at least US $360 million for it. And continuing to insist that Taiwan industry would have no role. When people in the KMT/PFP opposed the submarines, calling the program "kaizhe jungou," they have a point -- many I know are aware they were getting screwed.

The consensus among military experts is that subs are the best weapon against a Chinese invasion, since at the moment China's anti-sub capabilities are poorly developed. I have opposed the purchase of subs partly because for $12 billion Taiwan can get more bang for the dollar from purchasing additional fighter aircraft, along with spares, ammo, and training, and partly because I remain skeptical that subs will be effective in stopping a Chinese invasion -- history does not appear to offer any examples of invasions where submarines played a prominent role in their defeat.. Hence it was good to see Cole point out the importance of focusing on fundamentals:

"The defense debate about Taiwan in this country, and I suspect to a good degree in Taiwan, is too easily focused on these special budget items, rather than focusing on increasing the regular defense budget'" said Cole, who recently published a book entitled, Taiwan's Security: History and Prospects.

Many of the military officers he spoke with over the years, Cole said, "understand that very clearly and are frustrated by some of the budget problems they are experiencing."

He said these officers want such "mundane" things as money to buy fuel for ships, funds for more aircraft flying hours or money for ammunition for artillery training.

The US has clearly screwed Taiwan on the special budget, and Taiwan should move forward with alternatives, including developing a conventional submarine capability. In 15 years a sub manufacturing capability may well pay off in exports to neighboring countries who cannot source from Europe, since the Europeans fear the wrath of China.

[Taiwan] [US] [China] [submarines] [US Foreign Policy]

Taichung Writers Association

David Braden let me know of the website for the Taichung Writers Association. Looking for submissions from talented local writers in either English or Chinese.


[Taiwan] [Taichung]

Rebar: the Once and Future Scandal

All of this has happened before and all of this will happen again. -- The Pythian Prophecy

A neat summary of recent the Rebar affair was presented by Chengchih University finance professor Norman Yin in the Taipei Times on Jan 14.

Yet another family-run Taiwanese enterprise has collapsed amid scandal. China Rebar Co (中國力霸) and Chia Hsin Food & Synthetic Fiber Co (嘉新食品 化纖) announced their intention to restructure due to insolvency. The Chinese Bank (中華銀行) and Great Chinese Bills Finance Corp (力華票券金融公司) have been taken over by the government and local creditors. And Eastern Multimedia Group (東森媒體集團) has cut ties with parent Rebar Asia Pacific Group (力霸亞太企業集團) to protect itself.

Depositors at The Chinese Bank have scrambled to withdraw their savings, creditors are trying to salvage their loans and investors are breathing down the bank's neck. Government officials hurriedly responded by guaranteeing depositors' ac-counts. But Taiwan has nonetheless entered another financial crisis.

This time the family-run financial group made careful calculations to separate out its profitable businesses, gut its financial companies and stick the government with the problems ensuing.

Meanwhile, the government is following the old formula of accepting everything without question, ultimately leaving it to taxpayers to foot the bill.

Family run business collapse. Fugitives off to China. Massive political repercussions. Government left holding the bag. Employees and investors wiped out. Government officials implicated. Pointless resignations. Been there, done that.

The granddaddy of all Taiwan financial scandals was the collapse of the Tsai family's Cathay Group in 1985. That scandal involved a family-run conglomerate that accounted for 5% of Taiwan's GDP. For years it had pursued a policy of robbing its employees to pay its debts, borrowing money it would never return, and paying interest rates as high as 30% annually, which should have signaled that something nefarious was taking place. The government knew perfectly well what was happening -- indeed, the group had regularly been investigated and fined for financial irregularities, but the sums involved were so large that the government was nervous about interfering in the ongoing train wreck.

As Karl Fields pointed out in his excellent book Enterprise and the State in Taiwan and Korea, the extent of the financial operations of these conglomerates, and the way they indifferently trashed the lives of little people, can be seen in the Tsai family's desperate and ruthless use of their employees. The head of the family, Tsai Chengchou, enlisted 700 employees in a credit cooperative and then asked them to apply for loans on his behalf. In many cases the amount of the loan was raised without the employees' knowledge or consent, and far in excess of government limits. Chops were borrowed without consent and loans taken out in employees' names without their knowledge, and approved by trusted managers based on collateral recycled through several loans. Meanwhile he also used the underground financial market, exploiting the common Taiwanese practice of using post-dated checks as loan instruments. When the conglomerate collapsed, Tsai had passed over $US125 million in such small-fry loans, by some estimates, though he was ultimately convicted on 539 post-dated checks worth $US2.5 million, or about $4,600 apiece. Ultimately US$190 million in bad loans had been accumulated through such illegal routes.

As we'll see, the Rebar scandal displays much of this same indifference to friends, family, and employees, with the government once again acting as the enabler.

Things began innocuously enough. The tale began on January 5th with the prosaic announcement that the Central Deposit Insurance Corporation was taking over the Chinese Bank:

The Financial Supervisory Com-mission abruptly announced late last night that it would take over The Chinese Bank (中華銀行) after two subsidiaries under its parent company, Rebar Asia Pacific Group, claimed insolvency protection.

The decision was made after the takeover of troubled Enterprise Bank of Hualien (花蓮企銀) yesterday afternoon in an unprecedented case of the govenment taking over two lenders in a single day.

The commission was to delegate the Central Deposit Insurance Corp to take over the bank at midnight last night. The comission also immediately suspended all powers held by The Chinese Bank's board, supervisors and shareholders. Its board directors have been banned from leaving the country and their assets have been frozen.

The bank's net worth had reached negative NT$15.3 billion (US$469 million). Its shares will be traded in cash transaction only starting on Monday.

The mess quickly began to spread. Within a day, the Rebar Mess began to spread:

The financial regulator yesterday ordered the takeover of a bills financing company by two banks as the Rebar Asia Pacific Group (力 霸亞太企業集團) saw its financial troubles extend to other members of the conglomerate.

The state-controlled Taiwan Cooperative Bank (合作金庫銀行) and the private Cathay United Bank (國泰世華銀行) will take over the financially strapped Great Chinese Bills Finance Corp (力華票券) effective 9am today, Financial Supervisory Commission Chairman Shih Jun-ji (施俊吉) said last night.

Great Chinese Bills, 70 percent held by the Rebar Group, reported a funding gap of NT$1.7 billion (US$52.2 million) yesterday.

It was the second takeover of a financial company under the Rebar Group. The government's Central Deposit Insurance Corp (中央存保) took over The Chinese Bank (中華銀行) at midnight on Friday.

Typically in Taiwan such business conglomerates, called guanxichiye, are headed up by a senior family member who farms out directorships of the various subsidiary businesses to other family members. If the conglomerate runs into trouble, the productive subsidiaries are raped to pay the debts of the unproductive ones, until the assets have been consumed, and then the company collapses. To secure their positions, in the old days they appointed mainlanders, often retired military men, to act as front men, and positioned relatives in the legislature to secure government contracts and to write laws to protect themselves. The KMT government had supported this because it needed funding from wealthy businessmen, the so-called "golden oxes." The Tsai family was brought down by that very practice. When one Cai family member retired from the Legislature in 1983, he was replaced by a nephew, who promptly banded together with 12 other business representatives in the legislature in an assault on banking restrictions. Fearing the development of monster banking institutions without government supervision, the old KMT legislators fought back, defeating the effort to amend the laws, and then forming an investigative committee to look into the machinations of the Group, which eventually led to its exposure and collapse.

On January 8 the papers announced that Wang You-theng, the chief of the conglomerate, had fled ahead of the company's insolvency report.

The chairman of a troubled conglomerate at the center of an emerging financial scandal is reported to have fled to China with his wife late last month, even as prosecutors yesterday announced they were launching an embezzlement investigation.

On late Saturday, investigators said they were prohibiting Rebar Group chairman Wang You-theng (王又曾) and his family members from leaving the country, as they started to investigate whether or not the family had embezzled assets from the Rebar Group.

Immigration authorities reported that Wang and his wife Chin Shyh-ying (金世英) flew to Hong Kong on Dec. 30.

The couple and three of their sons, Wang Lin-i (王令一), Wang Lin-tai (王令台) and Wang Lin-chiao (王令僑), two of their daughters, Wang Lin-ke (王令可) and Wang Lin-mei (王令楣), and Wang You-theng's younger brother, Frank Wang (王事展), were prohibited from leaving the country on Saturday, the Ministry of Justice's Investigation Bureau said yesterday.

Wang You theng's remaining son, Eastern Multimedia Group chairman Gary Wang (王令麟) was not on the list.

Although China and Taiwan have a very low-key extradition program, it is almost invariably reserved for petty or violent criminals. It is rare, if not unprecedented, for people suspected of white-collar crimes or corruption to be returned to Taiwan.

That same day Premier Su reassured the public that everything will be fully investigated, presaging, of course, the inevitable accusations of DPP and KMT incompetence and corruption....

Su also outlined principles for handling the financial crisis of the Rebar Asia Pacific Group and investigating whether there was premeditation behind insolvency claims made by the group's two units.

"We will deal with the case in accordance with three principles -- banning responsible persons from the group from leaving the country, freezing their assets and punishing their irregularities severely," Su told the press yesterday morning.

A Cabinet official later said that Su had suggested that some aspects of the insolvency claims may have broken the law.

"The reasons why [China Rebar Co (中國力霸) and Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖)] applied for insolvency after [the group's Chairman] Wang You-theng (王又曾) went to China must be investigated," the official said on condition of anonymity.

Sure enough, the KMT and DPP started pointing fingers:

Chinese Nationalist Party (KMT) lawmakers yesterday criticized the government for failing to prevent a run on The Chinese Bank, while Democratic Progressive Party (DPP) lawmakers said KMT Chairman Ma Ying-jeou (馬英九) should do more to help deal with the problem.

Financial problems within the Rebar Asia Pacific Group recently led to two of its member companies applying for insolvency, which in turn triggered a run on The Chinese Bank, also a member of the group. As a result, the bank was taken over by the government on Friday.

Over the next couple of days, legislators also slammed officials for complacency and incompetence.

The fact that the head of the group had fled a week prior to the declaration of insolvency led to suspicions that the whole thing had been in the planning for some time. Suspicions were heightened when on the 8th Rebar admitted to a reporting delay:

China Rebar Co (中國力霸) yesterday admitted a delay in notifying the Taiwan Stock Exchange Corp of its insolvency claim, in response to a NT$50,000 fine imposed by the stock regulator amid speculation that the company had withheld critical information from its investors.

Both China Rebar and Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖) under the parent Rebar Asia Pacific Group (力霸亞太企業集團) were approved for insolvency protection by the Taipei District Court on Thursday to pave the way for future corporate restructuring.

"There was a two day delay as a result of our own negligence and three New Year holidays over the weekend," the company said in a filing to the stock exchange.

What happened next was inevitable, given the close relations between regulators and companies.On Jan 10, in the best Inspector General style, the prosecutor's office announced that raids were imminent:

Backed by leads which prosecutors categorized as a "major breakthrough," the Taipei District Prosecutors' Office yesterday said it was poised to raid subsidiaries of the Rebar Asia Pacific Group (力 霸亞太企業集團) "at any time."

"Probe actions could be launched anytime after investigators gained possession of documents relating to a potential scandal involving the Rebar Group," Taipei District Prosecutors' Office spokesman Lin Jinn-tsun (林錦村) said.

Taipei prosecutors were yesterday collecting and analyzing documents relating to a possible insider trading and embezzlement scandal in the Rebar Group.

"Prosecutors have received a possible lead from the Financial Supervisory Commission [FSC] on a suspected case of illegal trading involving The Chinese Bank and other firms," Lin said, adding that the FSC documents would serve as "a solid base for the investigation."

Lin said that Lead Prosecutor Chuang Cheng (莊正) would head a team of four Taipei prosecutors and investigators in probing the case. They will also investigate whether the group illegally invested in the Chinese market using shareholders' money, Lin added.

The FSC said it found "frequent and substantial amounts of unusual selling activity" involving shares in The Chinese Bank (中 華銀行), Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖) and China Rebar Co (中國力霸) last month. The latter two companies filed for insolvency protection on Thursday.

No doubt shredders all over Rebar fired up at that announcement. The next day headlines read Rebar Raided:

A large team of special agents from the Bureau of Investigation raided the headquarters of Rebar Asia-Pacific Group (力霸亞太企業集團) and questioned The Chinese Bank general manager Wang Lin-chiao (王 令僑) yesterday.

Taipei District Prosecutors Office Spokesman Lin Jinn-tsun (林錦村) said that four prosecutors and more than 150 special agents were assigned to qquestion personnel involved in the case.

After receiving warrants, the investigators raided offices and residences in Taipei City and Taipei and Ilan counties. The raids began at 9am, and were ongoing at press time last night.

At the Rebar Group's headquarters on Zhongxiao E Road in Taipei, Prosecutor Lu Hsiao-yun (盧筱筠) led a group of special agents during the raid and questioned Wang Lin-chiao, group owner Wang You-theng's (王又曾) seventh child. After a short interrogation, Wang Lin-chiao left with a small group of agents, but he returned to his headquarters at around 3pm.

He later told reporters that he had guided the special agents in a raid on his residence.

"I was simply cooperating with them [the agents]. At this time, I feel awkward about the relationship and feelings between me and my father," Wang Lin-chiao said.

The comments in the article highlight the family nature of the business group, in which a business collapse affects individuals across the extended family, for whom the business represents their entire lives. Such family businesses are the very essence of Taiwan business life -- two of the universities I have worked for were family run. The family not only provides the ownership structure, it also creates the template by which employees are supposed to relate to each other. A friend of mine who recently considered leaving a family-run business but then decided not to was told, by an employee entirely unrelated to the family who owned the business: "We knew you'd come back to the family." Even in businesses where there is no blood relationship, the owners have some tie that binds -- such as going to the same school, or even the same birthday or same last name.

That same day the Gary Wang, Chairman of ETTV, one of Taiwan's most rampantly pro-Blue media, criticized his father

"To be frank, my father asked me for money, but I wouldn't give it to him. That's why this crisis came to a head. It's humiliating and regrettable. But we are in an era run by companies -- I couldn't just give him money like that," Gary Wang said in an interview with the Chinese-language United Daily News. "The value systems of our two generations are different."

Wang You-theng left the country on Dec. 30, Gary Wang said, adding that the departure was so secret that none of the Wang family members knew.

"On Dec. 31, he [Wang You-theng] called [his sons, Wang] Lin-i (王令一) and [Wang] Lin-chiao (王令僑) from Hong Kong and told them to come meet him there. He told them that he was finished, that he couldn't face society," Gary Wang said.

"My dad won't come back," he said.

Wang You-theng's sons Lin-i and Lin-chiao are vice chairman of Chia Hsin and vice president of The Chinese Bank, respectively.

Prosecutors began to detain family members on January 12:

Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖) general manager Wang Lin-i (王令一) and Union Insurance Co (友聯產險) president Frank Wang (王事展) were held on suspicion of violating the Securities and Exchange Law (證券交易法).

The detentions came as authorities investigated the parent group of the companies, Rebar Asia Pacific Group. The Rebar Group's chairman, Wang You-theng (王又曾), fled to China on Dec. 30 with his wife, and is suspected of having embezzled millions of dollars from the group.

Lin-i is Wang You-theng's son, while Frank is his younger brother.

They were the first two people to be detained in the Rebar case.

"We found it necessary to detain the two defendants as they are suspected of having earned more than NT$100 million [US$3 million] from illegal transactions. They face more than seven years in prison." said Fred Lin (林錦村), spokesman for the Taipei District Prosecutors' Office.

Meanwhile the inevitable political repercussions inevitably occurred as President Chen appointed DP Chairman Yu and Premier Su to handle the Rebar case. Wang You-theng, the head of the Rebar Group, was former KMT Central Standing Committee member, so the KMT also went into damage control mode.

The political fallout spread out from Taiwan as all sides, but especially the pro-Taiwan side, criticized Beijing for becoming a haven for fugitives from China. The Rebar case began affecting China ties.....

Premier Su Tseng-chang (蘇貞昌) yesterday urged China to deport Rebar Asia Pacific Group (力霸亞太企業集團) chairman Wang You-theng (王又曾).

"Many Taiwanese white-collar criminals escape to China. Some of them even make donations to local organizations in China," Su said.

"What they have done really irritates Taiwanese people. I hereby urge the Chinese government to help send them back to Taiwan," he said.

In a separate setting, Chinese Nationalist Party (KMT) Chairman Ma Ying-jeou (馬英九) yesterday said that the party would be willing to make contact "via certain channels" with Chinese authorities to ask that Wang be sent back to Taiwan.

He also called on the Democratic Progressive Party (DPP) not to shift blame onto the KMT because Wang was a party member, at one point serving in the party's central standing committee.

"The DPP has been the ruling party for seven years, and established the Financial Supervisory Commission. Determining whether or not the bank had problems is the responsibility of the DPP," Ma said while touring Yunlin County.

.....

Earlier in the day, DPP officials had urged Ma to help push China to repatriate Taiwanese criminals to face justice.

A spokesman for the DPP, Super Meng (孟義超), and China affairs department director Lai I-chung (賴怡忠) asked Ma to negotiate with China.

Mung said that many former KMT officials had committed crimes in Taiwan and had fled to China.

In Taiwan, as many commentators have complained, it is common for scandals to trigger resignations under which the resigning official "takes the responsibility" but the practices do not change. Hence, it goes without saying that the head of the financial oversight body, the FSC, resigned:

The Cabinet last night approved the resignation of Financial Supervisory Commission (FSC) Chairman Shih Jun-ji (施俊吉) in the wake of a run on The Chinese Bank (中華銀行), a subsidiary of the Rebar Asia Pacific Group (力霸亞太企業集團), which started last Friday after news broke that two other subsidiaries of the group had filed for bankruptcy protection a day earlier.

More than 40 Rebar Group executives have been questioned by prosecutors in the wake of the scandal, and two members of group founder Wang You-theng's (王又曾) family have been detained. Wang fled to China late last month.

At a press conference last night, Vice Premier Tsai Ing-wen (蔡 英文) said Shih had tendered his resignation yesterday afternoon to shoulder responsibility for the scandal.

Tsai said that Premier Su Tseng-chang (蘇貞昌) had reluctantly approved his resignation.

As to who would take up the vacancy left by Shih's departure, Tsai said Su would discuss the issue with the president, who is scheduled to return to Taipei this morning following his five-day trip to Nicaragua, where he attended the inauguration of Nicaraguan President Daniel Ortega on Wednesday.

"I resigned in order to take responsibility for the recent social disturbance caused by the overnight outbreak of long-standing malpractice in the financial sector," Shih said in a text message last night.

On cue, the local pro-Green newspapers launched editorials complaining about China's sheltering of fugitives from Taiwan. The Taipei Times noted on Jan 13:

But when Taiwanese politicians and businesspeople run off with the cashbox, they head straight for China. And why not? They will be welcomed with open arms in a country where they likely speak the language, knowing they will never have to face the music back home. If Taiwanese authorities make a fuss, then they just have to grease a few CCP wheels to keep the champagne flowing.

If the fugitive gets really lucky, he or she will be adopted by the CCP and used for political purposes, like Chen Yu-hao (陳由豪). The former Tuntex Group chairman, after stealing NT$800 million (US$24.42 million) from his firm, spent the better part of a year trying to undermine Taiwan's democratically elected government with sensational faxes to media organizations alleging all kinds of malfeasance by the president.

No doubt he was compelled by his deep sense of moral duty to his homeland, which is why he refuses to return to it and answer the legal charges against him.

Let's not forget former Kaohsiung City Council speaker Chu An-hsiung (朱安雄). Chu, who was also president of the An Feng Group, was convicted for his role in the theft of NT$22.7 billion from his firm. In an act of blithering incompetence (or brazen corruption), prosecutors allowed him to wander free on NT$5 million bail for two months before he was to report to jail to serve his sentence. Needless to say, he never showed up for his date with the jailer and his last known stop was -- take a guess -- China.

The following day that same paper opined:

What makes matters worse for Taiwan is that many of the criminals who run off to China use their stolen money to finance projects there. Adding salt to the wound, every now and then some of these criminals are wined and dined by Chinese officials. Such scenes engender great resentment, especially on the part of hardworking Taiwanese who have lost life-long savings to these criminals.

The Taipei Times also listed other criminals who have done the same:

"They are the honored guests of Chinese officials because they carried their cashbox to China or have substantial business interests there," said Lin Ching-tsung (林慶宗), a prosecutor with the Kaohsiung branch of the Taiwan High Court Prosecutors' Office.

The official said because of the lack of official judicial cooperation with China, Taiwan is unable to ask Chinese to apprehend white-collar fugitives.

Therefore, China has became a "haven" for white-collar fugitives, Lin Ching-tsung said.

He then cited a list of such fugitives, such as Eddie Liu (劉偉杰), a former employee of the prominent legal firm Lee and Li Attorneys-at-Law. Eddie Liu embezzled NT$3 billion and fled to China in 2003.

The prosecutor also mentioned Liang Po-hsun (梁柏薰), the former president of the Overseas Chinese Bank who fled to China in 2004, after being found guilty of embezzling funds from his bank. Liang Po-hsun was eventually persuaded to return to Taiwan to serve his prison term last year.

However, the prosecutor said, Tseng Cheng-jen (曾正仁), the former president of the Kuangsan Enterprise Group (廣三集團) and former chairman of the board of the Taichung Business Bank (台中企銀), was sentenced to 11 years in jail in 2004 for an embezzlement scandal involving his bank before he escaped to China.

On Jan 20 Taiwan News similarly complained:

A Ministry of Justice Investigation Bureau spokeswoman in Taiwan said, however, that of the 227 Taiwan criminal suspects now overseas, China had the biggest share. Some are prominent business people.

Of the 73 Taiwanese suspects believed to be in China, 60 are suspected of economic crimes and most of the others are wanted for some form of corruption.

Beijing has returned just three suspects to Taiwan.

And pro independence group 908 Alliance hacked on Beijing....

With cross-strait charter flights in the spotlight ahead of the Lunar New Year holiday, the group's leader Peter Wang (王獻極) said China should arrange a special "criminal charter flight."

Wang was speaking at a joint press conference with Democratic Progressive Party (DPP) Legislator Kao Chien-chih (高建智).

"It would be very dangerous for the [DPP] government to agree to cross-strait charter flights. We think it is a matter for the Executive Yuan to review," he added.

Since the Chinese government has claimed that it is willing to work with Taiwan to crack down on crime, it should show its sincerity by repatriating Taiwanese criminals who are hiding in China, Wang said.

Peter Wang's comments were prompted in part by the scandal surrounding Rebar Asia Pacific Group (力霸亞太企業集團) chairman Wang You-theng (王又曾), who fled to China and then the US.

Peter Wang said many other white-collar criminals had used China as an escape route.

Peter Wang listed former Kaohsiung City Council speaker Chu An-hsiung (朱安雄), former Kuangsan Enterprise Group (廣三集團) president Tseng Cheng-jen (曾正仁) and former Tuntex Group chairman Chen Yu-hao (陳由豪) as examples.

"China has become a paradise for Taiwanese fugitives," Peter Wang added. "China uses these Taiwanese fugitives, who take huge amounts of money with them, to create disharmony in Taiwanese media and society."

...while the stories of VIP treatment for the Wangs grew with the telling:

Meanwhile, Cabinet Spokesman Cheng Wen-tsang (鄭文燦) said he was investigating a rumor that aviation police officers had treated Wang You-theng and his wife Wang Chin Shyh-ying (王金世英) like VIPs when they left Taiwan last month.

"We are working on this issue and will address any problems that we identify," Cheng said.

It has been rumored that officers of the Aviation Police Bureau speeded the couple's passage through immigration and customs when they left for China on Dec. 13.

And a finance prof at Chengchih U excoriated the government, highlighting many of the issues of the cozy government-business relations that drive politics in Taiwan.

There are shortcomings in the nation's financial regulation system. In addition to the fact that the FSC has never func-tioned well since its founding, its Financial Investigation Bureau has been hampered by a lack of manpower and professional ability among its employees. Political pressure also makes it afraid to handle legal infractions by major financial groups, which has also hamstrung its operation. It also stood by and concealed financial organizations' serious problems, fearing it would get blamed. It has delayed taking action until the problem finally became irreversible.

The IMF has pointed out that many countries are afraid to expose their scandals to the world and are unwilling to take immediate action on financial problems. More and more resources are embezzled as the delays drag on, increasing the cost of resolving them in the future.

Article 64 of Taiwan's Banking Law (銀行法) stipulates that when a bank has depleted more than one-third of its capital, it must immediately report that to the regulatory bodies. The central regulators should then order these banks to replenish their funds. If they fail to do so within the allotted time, banks should be forced to halt operations.

Articles 65 through 67 say that if such banks do not balance their accounts, they should have their licenses revoked and should be dissolved.

There is no spare capital in the nation's financial markets, but many banks operating in the red are still around, including The Chinese Bank and six other troubled banks overseen by the FSC.

Banks that have lost more than one-third of their capital should be handled according to the law, but many appear to be exempt. Financial regulators have legal powers but don't use them. They see the law as immaterial and do nothing while the state of financial organizations deteriorates. The nation's present financial problems are the result of years of inaction by financial overseers.

The FSC's lack of professional leaders and staff with banking expertise has delayed and complicated the handling of these problems. The commission's chairman has made many slips of the tongue, such as saying that a takeover means incorporating the banks into the state and completely ignoring the fact that they are only taking over management of The Chinese Bank on behalf of the depos-itors. He also said that no taxpayers' money would be used to guarantee the deposits, even though the government's relief funds consist entirely of financial operations taxes, paid by taxpayers.

On January 14 Premier Su met with the President, and new raids found fresh evidence

Investigators have seized more useful data in their second search of troubled Rebar Asia Pacific Group's (力霸亞太企業集團) headquarters in connection with a probe into the group's suspected involvement in insider trading, prosecution officials said yesterday.

A team headed by Prosecutor Chang Shu-hua (張書華) searched 17 locations, including the Rebar Group headquarters and the homes of the group's board members on Friday, focusing on accounting and transaction records related to suspected insider trading of shares of two ailing Rebar affiliates -- China Rebar Co (中國力霸) and Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖).

Lin Jinn-tsun (林錦村), spokesman for the Taipei Prosecutors' Office, said investigators confiscated 40 boxes of documents, including some "very helpful" data.

"The impounded items include computer discs, private notebooks, accounting books and transaction records that will be very helpful with the investigation into the Rebar Group's suspected illegal commercial dealings," Lin said.

On January 16th the story took two new twists. First, the Wangs were reported to have left China and fled to the US (the US was later reported to be helping find the fugitives, who were in the US on a business visa). More importantly, one of the Rebar Group's subsidiaries, Asia Broadband, was raided. This would trigger more political revelations....

Three of Rebar chairman Wang You-theng's (王又曾) sons -- Asia Pacific Broadband Telecom vice chairman and president Wang Lin-tai (王令台), The Chinese Bank (中華銀行) vice president Wang Lin-chiao (王令僑) and Lawrence Wang (王令興) were summoned for questioning by prosecutors yesterday.

The questioning was still continuing at press time.

Lin Jinn-tsun said that six years ago Asia Pacific Broadband Telecom collected around NT$60 billion (US$1.83 billion) in bonds. Around NT$10.5 billion of this sum was paid to the government for access and licensing, while around NT$20 billion was used to pay for the company's own telecom infrastructure. Prosecutors believe the remainder -- around NT$29.5 billion -- was embezzled.

Officials at Asia Pacific Broadband Telecom are suspected of having lied to shareholders and misappropriated funds, Lin Jinn-tsun said.

Lin Jinn-tsun said that the headquarters of Rebar Asia Pacific Group, Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖), and The Chinese Bank were also searched once again in an effort to uncover more evidence.

This led to headlines the following day, pointing out that the government had been operating in see-no-evil mode for years:

Legislators yesterday demanded that the Cabinet dismiss seven government officials who were board members for Asia Pacific Broadband Telecom Co (亞太固網), a company related to the scandal-plagued Rebar Asia Pacific Group (力霸亞太企業集團).

Asia Pacific Broadband Telecom was raided yesterday in an effort to determine the fate of more than NT$60 billion (US$1.83 billion) the company raised in bonds.

Lawmakers and political parties invested heavily in the firm, as did a number of state-run companies.

Taiwan Solidarity Union (TSU) Legislator Tseng Tsahn-deng (曾燦燈) told a press conference that over the past six years, the broadband company had not presented financial reports to its board members.

Despite this, he said, seven government officials who represented three government-related investors on the company's board had done nothing.

The caucus said figures from the Ministry of Economic Affairs (MOEA) showed that the Taiwan Railway Administration (TRA) had invested NT$8 billion (US$243 million) in the company in 2000.

The Chiao Tung Bank (交通銀行) -- which became Mega International Commercial Bank (兆豐國際商銀) after merging with International Commercial Bank of China (中國國際商銀) -- invested NT$2.1 billion, while state-controlled China Steel Corp (中鋼) invested NT$1.2 billion in the company the same year.

As the government owns a major portion of the shares of the bank and China Steel, the TSU caucus criticized officials for failing to safeguard the public's money.

Tseng also urged prosecutors to investigate whether government officials had been covering up for the company over the past six years.

"You had not seen financial reports between 2000 and last year, and you did not find out the fact that the company had problems? Have you all been asleep?" TSU Legislator David Huang (黃適卓) asked the officials, who were present at the conference.

None of them responded.

For six years the company has not been held to basic accounting standards, even though the government was a major investor through many of its companies. The political impact on the DPP may not be all that large, as the fugitive Chair of Rebar is a former KMT central standing committee member. Everyone can share the blame for this fiasco...the major papers were also reporting that a large number of legislators had invested in the firm, using methods that were less than kosher....

At its inception in May 2000, Asia Pacific Broadband Wireless was named Eastern Broadband.

The Wang family issued stock slips, instead of formal securities certificates, at a selling price of NT$10 per share to raise fund.

Between 60 and 90 percent of legislators of all political parties had snapped up the stock slips at various costs depending on each lawmaker's financial standing and political clout.

Many lawmakers used their influence to raise loans from financial institutions to purchase the slips for quick profits.

Market prices of the slips once rose to NT$16 or NT$17 per share and some even to more than NT$20 a share.

Most members of the Legislative Yuan, their assistants, and even some reporters covering the parliament were believed to have built up their hoarding of the share slips.

Some more financially savvy legislators managed to sell off their holdings for quick profits.

But many others suffered heavy losses because they continued building up their holdings in anticipation of the advent of the new 3G telecom era.

It is easy to see why the public is so disgusted and why politics is so corrupt. It is also easy to see the political nature of the attacks on First Lady Wu, President Chen, and his son-in-law Chao Chien-ming. In this case more than half the legislature is making a killing arranging sweetheart deals on shady stock issues, which they borrow money from friendly financial institutions to purchase, and make a killing for themselves. That's insider trading -- what the First Son-in-Law just got seven years for. Given the hypocrisy of lawmakers accusing Chao of insider trading but made money on sweetheart stock deals, it is easy to see why the DPP did not take a hit in the recent Kaohsiung and Taipei mayor elections.

The elites might cash in, but at last the pigeons arrived home, to roost not in the coops of the law, but to crap on the heads of the little people, as the city of Taipei announced that it sought Missing Rebar Pension Funds:

The Taipei City Government's Department of Labor Affairs yesterday was still searching for NT$450 million (US$13 million) that is missing from China Rebar Co's (中國力霸) labor pension account.

In addition to discovering that the account at the Central Trust of China had a balance of just NT$650,000, department officials also learned that members of the pension account examination committee were appointed by the company, rather than employee representatives, and that the committee had not checked the account for more than a year.

"With little money left in the account, no one in the company will be able to receive a full retirement pension," commissioner of the department Su Ying-kuei (蘇盈貴) said yesterday at city hall.

Meanwhile Asia Pacific Broadband planned board reshuffle even as banks vowed to take legal action against Rebar firms. In Taiwan, companies may be held by families, but debts belong to the public. And the little people pay for the crimes of the rich, as is universal.

One thing that deserves greater mention in all this is the former ruling party: the high-profile fugitives who have fled to China mostly have close connections to the Chinese Nationalist Party (KMT). For example, former Tuntex Chair Chen Yu-hao, a good friend of anti-Chen corruption campaign leader and recent convert to the Blue side Shih Ming-teh, headed up the Tuntex group, which he slimed with billions in debt before riding off into a Chinese sunset. Later he would be made a tool against Chen Shui-bian, in the 2000 election campaign. Lawrence Eyton, always spot-on, reported in the Asia Times:

It must have seemed a good idea to someone, somewhere. According to the Taiwanese newsmagazine Win-Win Weekly, the good idea originated with middle-ranking officials in Beijing's Taiwan Affairs Office, or so a friend of the chief protagonist claims. The plan was this: Get Taiwan's most notorious fugitive to claim that he had made illegal political donations to the election campaign of the Democratic Progressive Party's (DPP) Chen Shui-bian in 2000, thus involving Chen, now president, in a scandal that would spoil his chances of re-election.

Last week the plan was put into effect - with potentially serious consequences for those it was meant to help. The fugitive in question is Chen Yu-hao, the erstwhile boss of the Tuntex group, a conglomerate with interests ranging across department stores, property development, construction and textiles.

Tuntex used to be one of Taiwan's premier industrial groups. Now it is one of its foremost deadbeats, awash in US$1.8 billion worth of debt, and being slowly broken up and sold off by its creditors - mainly state-owned banks. Now Chen Yu-hao has gone from being Taiwan's 10th-richest person to holding a prominent place on its 10 most wanted fugitives list.

Wang You-theng, the hero of this current crisis, is a former member of the KMT's Central Standing Committee. Fugitive Liang Po-Hsun, who returned to Taiwan in April to serve his sentence, was a close friend of James Soong, once a KMT stalwart, now head of the People First Party (PFP). Chang An-lo, now running a "consulting company" in China, is a prominent gangster with old connections to the island's security services and to Alex Chiang, one of the scions of the ruling Chiang family. Wu Tze-yuan, the former KMT legislator whose followers once carried him in on their shoulders to register for elections in Pingtung because he was too afflicted by diabetes to walk, now resides in China. Many others could be named. The list is long, and it will continue to grow.

What can be learned from this mess? Quite a bit. But if the long list of looted and collapsed family-run firms is any indication, it is unlikely that Taiwan will learn anything from this mess.

[Taiwan] [US] [China] [DPP] [KMT] [Su Tseng-chang] [Rebar]

Worried about Student Names? Worry no more...

I know some of you are conflicted over pressing students to change their really stupid names, like Jail, Bunny, Rabbit, Brain, Queenie....well worry no more. Go for it. I found this little tidbit researching the Rebar case today:

A spokesman for the DPP, Super Meng (孟義超), and China affairs department director Lai I-chung (賴怡忠) asked Ma to negotiate with China.

"Super"? Puh-lease.

[Taiwan]

It's Taiwan-Japan Year!

Driven to compete with China in everything....

The Ministry of Foreign Affairs has decided to name this year "Taiwan-Japan Cultural Exchange Year," sources in the ministry said.

The first quarter of the year will focus on the opening of the high-speed railway between Taipei and Kaohsiung, the sources said, adding that this would be followed by other exchanges showing off Japanese culture, drawing on the success of last year's sumo exhibition.

The reason the ministry chose to make Japan the focus of its efforts this year is that China will be marking the 35th anniversary of Japan's switch of diplomatic recognition from Taiwan to China with a similar sports and cultural exchange.

China and Japan are planning a series of celebrations and exchange activities, a ministry source said.

The source added that ministry officials have complained that while China and Japan are spending a lot of money on the event, the ministry has not been given a special budget for its exchange year, since Tokyo and Taipei do not have diplomatic relations.

Taipei's most important concern after maintaining relations with the US is maintaining good relations with Japan. Given Japan's slow drift toward Taipei, why is there no special budget for cultivating Japan's relations with Taiwan?

[Taiwan] [China] [Japan] [Asia]

Solomons Islands and Taiwan

Taiwan's dollar diplomacy has earned the hypocritical ire of the South Pacific Commonwealth nations...

A controversial plan by the Solomon Islands prime minister to have his personal police bodyguards given firearms training in Taipei has been quashed by the Taiwanese government.

Manasseh Sogavare's government wants to rearm its police force, a move opposed by the Australian-led region assistance mission in the island nation.

The rearming plan has also been condemned by civil groups fearful of a return to violence and ethnic unrest in the troubled nation.

Sogavare has brushed aside an Australian-led training package for his police bodyguards in favour of a Taiwanese course.

Last year, when Chinatowns in the Solomons were attacked during riots, the governments of Australia and New Zealand were critical....

Following destructive riots in the Solomons capital Honiara in April, the Australian and New Zealand governments criticised the Taiwanese government for engaging in chequebook diplomacy in the Pacific to win diplomatic recognition from small island nations.

The Solomons government recognises Taiwan as an independent nation from mainland China.

In return it receives generous cash aid packages, some of which are alleged to be misused by corrupt politicians to buy support to win power.

Many people ask what good independence would be for Taiwan. But here is a perfect example: the problems Taiwan has with its diplomatic operations are a direct result of its lack of real independence, and they impose actual costs, not only on Taiwan, but also on other nations. But here I'd like to highlight the pure hypocrisy of the Commonwealth states. The reason Taiwan has to purchase the governments of small nations is because nations like Australia and New Zealand kowtow to China on the Taiwan issue. In other words, the position of Oz and New Zealand is that Taiwan is bad for selling out the people of the Solomons to pursue its own interests with China, but it is OK for the governments of Oz and New Zealand to sell out Taiwan to pursue their own interests with China.

Check the beam in thine own eye, guys.

[Taiwan] [New Zealand] [China] [Australia] [Solomons]