The politics of cross-strait
business By Craig Meer
TAIPEI - Silence, apparently, is golden.
At least that's what you might conclude from the
reaction of Taiwanese business groups to last
week's surprise announcement by President Chen
Shui-bian to scrap the National Unification
Council (NUC) and Unification Guidelines. There's
hardly been a peep out of them.
The local
business community has restricted any public
comment to generic calls for peace and stability.
Chen Cheng-yi, spokesman for Taiwan's General
Chamber of Commerce, said in
an
interview with the Central News Agency on February
27, "What the commercial and industrial sectors
hope for most is peace outside and stability
inside the country." No word at all from the
chamber's conservative siblings, the Chinese
National Association of Industry and Commerce and
the Chinese National Federation of Industry.
In private, Taiwanese businessmen and
women active in the People's Republic of China
express concern about official reprisals: the fate
of recently penalized chipmaker United
Microelectronics Corporation (UMC) is fresh in
everyone's minds. UMC was fined US$150,000 in
mid-February for investing in Chinese chip foundry
without the permission of the Taiwanese
government.
But in truth, the UMC fine was
laughably small, and the business sector's
reticence to speak out on Chen's recent initiative
appears unusual. These are large, rich
corporations that have done remarkably well on the
back of cross-strait economic integration. Surely
they have an interest in debating a move that
could easily threaten cross-strait stability and
with it their livelihoods?
Now more than
ever, the cross-strait economy is booming. Total
indirect trade between the two sides - Taiwan
retains a ban on direct exchanges and most trade
is routed through Hong Kong - was $3.9 billion in
1989, the first year business contact was
officially permitted.
In 2004, according
to figures collated by Taiwan's Mainland Affairs
Council (MAC), total trade was just under $62
billion - a 16-fold increase in just a decade and
a half. Projections for 2005 suggest that last
year's result (the collated figures from MAC lag
four months) will come in at greater than $70
billion. Taiwan-China trade has increased at an
average annual rate of 25% since the start of the
decade.
The trade balance is
overwhelmingly stacked in Taiwan's favor. In 2004,
with exports of $44.9 billion and imports of just
US$16.6 billion, Taiwan recorded an accumulated
trade surplus with China of $28.3 billion.
Surpluses of similar magnitude are expected for
2005 and 2006.
Debate over the extent of
cross-strait financial links is intense, but the
message of a strong business interest in stable
relations remains the same. According to
statistics from China's Ministry of Foreign Trade
and Economic Cooperation, accumulated and realized
Taiwanese investment (foreign direct investment -
FDI) in China is in the order of $42 billion.
However, due to the sensitive nature of
cross-strait investment, most observers agree that
the official figures drastically understate the
actual level of Taiwanese FDI. Channeled through
shell companies in ports of convenience such as
the Bahamas, Taiwan-origin FDI in China could be
over $120 billion.
Remittances to Taiwan
are also substantial. Statistics published by
Taiwan's Central Bank of China put the amount of
returned profit and capital from the PRC at over
US$44 billion to date.
But despite the
impressive figures, and the capitalist clout they
would appear to afford Taiwan's silent business
community, the truth is, cross-strait economic
integration counts for little when it comes to
politics. Contrary to the best hopes of
interdependence advocates, business is, and has
always been, subservient to a political calculus
in both Taipei and Beijing. Taiwan's corporate
sector doesn't speak out because no one in
official circles is interested in listening.
For Chen and much of his ruling Democratic
Progressive Party, cross-strait economic
integration is an increasing burden on aspirations
for local autonomy. For a time, Chen flirted with
the idea of embracing the trend toward closer
economic ties; he adopted a cross-strait policy of
"active opening, effective management" in 2001 to
replace the more insular approach of his
predecessor, Lee Teng-hui.
However, the
president discarded this policy on January 1 this
year, and soon after did the same with his
premier, Frank Hsieh.
While there were
multiple factors bearing on the latter decision, a
large part of the reason was Hsieh's push for the
establishment of direct commercial links between
Taiwan and China. In a press conference on January
20 after stepping down, Hsieh lamented, "We should
formulate our China policy based on Taiwan's
interests ... I believe direct cross-strait air
links will benefit the country." Replacement
premier Su Tzeng-chang is a novice in cross-strait
relations and unlikely to buck the president's new
harder line.
For the leaders in Beijing,
cross-strait integration is primarily a means to
hasten Taiwan's unification with the motherland -
to achieve by economics what cannot, currently, be
achieved by political means. On the surface, China
is extremely welcoming of Taishang (Taiwanese
businesspeople), and channels the administrative
component of their mainland operations through
dedicated and well-funded Taiwan offices dotted
around the country.
In a speech to the
National People's Congress on February 5, Prime
Minister Wen Jiabao commented that his government
would continue to "protect the legitimate
interests of Taiwanese compatriots" doing business
in China.
But it's not just about
business. In mid 2004, the government threatened
to expel Taiwanese from China who supported
independence for the island - with businessman Hsu
Wen-long and rock star Jay Chou singled out for
special mention in the subsequent witch-hunt.
During the Taiwanese presidential election
of the same year, Taishang were surreptitiously
called on to relay messages that China was willing
to fight a war and sacrifice a decade of economic
development if Chen declared independence.
It is little wonder that the captains of
industry in Taiwan prefer to keep away from the
limelight. Increasingly, cross-strait relations
drive them, not the other way around.
Craig Meer is a freelance writer
based in Taipei.
(Copyright 2006 Asia
Times Online Ltd. All rights reserved. Please
contact us about sales, syndication and republishing
.)
