Taiwan faces a crucial decision on technology transfers to China
Beijing is now taking a dual approach to Taipei, offering incentives which raise some questions
After unprecedented snarling by China at Taiwan’s pro-independence government and various sorts of punishments – even cutting down tourism to Taiwan from China – Beijing is now playing a rather different card.
It is offering important incentives to Taiwanese businesses and individuals, even TV and movie producers, to expand their businesses in China and participate in key projects, especially in science and technology.
But in Taiwan, perhaps for the first time in many years, Taiwanese leaders and some from the academic and business community are starting to grasp that this latest move by China is not necessarily in Taiwan’s national security interest.
Years ago – as far back as the Nixon administration and as part of that administration’s idea of detente with Russia – the United States promoted investment and technology transfers that it pledged would help transform Communist Russia into a more pliable and engaged power, and one willing to cooperate with the West.
What actually happened was far different. Russia was in the midst of a military buildup and America’s transfers of technology and know how helped boost Russia’s military far more than supporting civilian industries. Thus the Kama River Truck Factory (Kamaz) and its ancillary but vitally important diesel-engine manufacturing plant gave the Russians a new generation of military vehicles.
Likewise, the sale of modern fertilizer factories provided Russia with a bigger supply of quality explosives for their army. Along the same lines, the loosening of COCOM (the Western Coordinating Committee composed of NATO members plus Japan) restrictions that supposedly regulated high tech trade gave Russia access to modern computers and electronics, which were sorely missing from Russia’s army, air force and navy.
With China it is a bit different in the sense that it is much worse. Western companies have freely transferred vast amounts of high technology to China and provided the manufacturing know-how and systems, including automation needed to support China’s economic and military ambitions.
Taiwan was among the big investors in China, ostensibly for business reasons because China offered a huge labor force and Taiwan was running out of skilled and semi-skilled manpower. But Taiwan also had a political agenda, along the same lines the Nixon administration claimed it was pursuing in Russia.
So Taiwan forged ahead without any analysis of the real implications, and so did their natural competitors in the United States, Western Europe and even Israel.
Keep in mind that most of the Silicon Valley companies and large aerospace companies such as Boeing and Sikorsky wanted to get into the China market and were willing to transfer technology highly leverageable by China’s military. It even got to the point that Sikorsky, which will build the new US Presidential helicopter, is building the same model in China.
The Europeans also did their best both openly and under the table, providing military technology directly to China. In the European view, US trade with China needed some balancing, and Europe could only compete with the products and technology it has, such as automobile technology and sophisticated machine tools and specialized equipment for China’s land, sea and air forces.
Perhaps the most severe and significant has been the sale of specially quieted diesel engines and related equipment for China’s newest hunter-killer Yuan-class submarines. The transfer of some 50 submarine diesel engines by Germany’s MTU, which is partially owned by the UK’s Rolls Royce Group, has given the Chinese navy a leg-up to build modern, quiet attack subs.
But it does not stop there. The same company has provided about 250 or more advanced diesel engines for China’s navy, enhancing their speed, efficiency and reliability – important improvements as China builds a capable blue water navy including aircraft carriers.
It is just as important that the United States not only provide strategic advice to Taiwan, but take concrete steps to make sure similar incentives from China are not waved in the face of American business and America’s technology elite
The full story of what has been sold to China and what is directly transferring to China’s military has yet to be fully analyzed because the pro-China lobby in the United States and elsewhere has deliberately kept it all quiet or tried to explain it away. To a degree, the apparent connivance is based on the perceived “good” of keeping Western economies humming.
But as the US now knows and Taiwan is beginning to figure out, there has been a tectonic power shift, especially in the Eastern Pacific and particularly with China’s successful militarization of the South China Sea, a challenge that largely has not been met by any of the players, especially the US.
This may suit business interests and political leaders in the short term, most of whom have sold out to the inevitability of Chinese power, but it has grave implications for the survival of democracies in the region, from Korea, to Japan, to Taiwan, to the Philippines, and to the US ability to protect the sea lines of communications and security in the region.
Now China’s bid to suck up Taiwan’s technology signifies yet another dimension of the same threat that is looming large.
The big question is what Taiwan’s government will do, if anything, to intervene in such matters. It is also just as important that the United States not only provide strategic advice to Taiwan, but take concrete steps to make sure similar incentives from China are not waved in the face of American business and America’s technology elite.
Taiwan has to decide where its future will be. Will it link up with China, surrender its democracy and become a dutiful province of China? Or will Taiwan take the other road and protect its independence and freedom?
Taiwan cannot have it both ways or turn a blind eye to the implications of high technology transfers to China.