Taiwan Communiqué No. 98, September 2001

The Beijing Olympics and Taiwan

By Li Thian-hok. Mr. Li is a prominent member of the Taiwanese-American community living in Pennsylvania. This article first appeared in the Taipei Times on 24 July 2001. Reprinted with permission.

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Ready for the Olympics?

The critics of the International Olympic Committee's decision to award the 2008 summer games to Beijing are worried that the decision may enhance the legitimacy of the repressive Communist Party government, leading it to accelerate its policy of military modernization and territorial expansion. The 1936 Berlin games and the subsequent launching of World War II by Germany is often cited in this connection. Opti-mists, on the other hand, cite the 1988 Seoul games and the positive effect it had in moving South Korea towards greater pluralism. China will be put under a microscope and, the optimists say, will have no choice but to improve its human rights record. These two views appear to conflict, but actually they may not.

China could improve its human rights record sufficiently to ward off any possible boycott of the 2008 Olympics, and yet at the same time exploit the prestige and commercial gains brought by the Games to further its goal of becoming a wealthy nation with a powerful military.

The international community has adopted a rather lenient standard in judging China's human-rights practices. The US government expresses its appreciation when Beijing convicts and expels a US academic on trumped-up charges of espionage, forgetting that China should not have seized the scholar in the first place. The world tends to close its eyes to the plight of the several million prisoners languishing in labor camps. The incarcerated include many dissidents and religious practitioners. While Slobodan Milosevic faces trial at the International Criminal Court at the Hague for ethnic cleansing committed by the Serbs in Kosovo, few people have paid attention to the 1.25 million Tibetans who have perished over the years under China's relentless campaign of genocide.

The reasons for the double standard are obvious. China is a rising regional power. There are no easy means of pressuring China to respect the civil rights of its citizens or minorities. Also, business interests from all corners of the globe have been seduced by the prospects of profits in the Chinese market. It is not hard to understand why trade has been delinked from human rights.

Many observers both in the US and Taiwan believe that awarding the Olympics to China will result in seven years of peace in the Taiwan Strait. This is a very foolhardy assumption. China has sufficient manpower and resources to conduct the Games and launch a successful blitz krieg against Taiwan. A complacent and feckless Taiwan government which fails to prepare the armed forces and its citizens for a PLA invasion could well invite such a disaster. The Olympics certainly give China an ideal weapon with which to undermine the confidence and self-identity of the people of Taiwan.

For Beijing, politics and sports are inseparable. Since the 1970s, it has spared no effort to undercut Taiwan's international status in connection with its participation in the Olympics. Now that China has been awarded the Games, Beijing will no doubt use various tactics to make Taiwan a province of China in the eyes of the world. The pro-unification media, the opposition parties and even thoughtless DPP members and government officials are already dancing to Beijing's seductive tune of "Chinese" national pride.

Taipei should refrain from using any words or committing any deeds which could be perceived by the international community as further eroding Taiwan's de facto sovereignty. Certain elements of Taiwan's media are eager to break into China's market. Businessmen want a chance to profit from the infrastructure projects for the Beijing games. Taipei should ask these businesses to show restraint and respect for Taiwan's territorial integrity.

The sports committee of the Executive Yuan and Premier Chang Chun-hsiung should declare a "four no's" policy as soon as possible. This policy should declare that Taiwan will not: Allow the Olympic torch to transit through any part of its territory; allow any Olympic event to be held on its territory; assist in, jointly manage or sponsor any of the Olympic activities with China; and participate in any joint delegation with China.

Taiwan must insist on its own flag and national anthem. Taiwan's athletes must understand that they represent democratic Taiwan, a separate country which is not ruled by the PRC. The athletes must uphold the dignity of the 23 million people of Taiwan. The government needs to act quickly to stem the tide of the destructive "China fever." It is high time Taiwan stood up.

Taiwan's economy at a crossroads

By Li Thian-hok. Mr. Li is a prominent member of the Taiwanese-American community living in Pennsylvania. This article first appeared in the Taipei Times on 8 September 2001. Reprinted with permission.

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Taiwan business, investing in China: "Oink, oink, I can smell the kitchen waste."

Taiwan's economy is in a state of acute distress.  In the seven months to July Taiwan's exports were down 13.6% year-on-year in U.S. dollars.  Almost all electronic exports have suffered sharp falls.  Taiwan's second quarter GDP contracted by 2.35%.  This contraction is Taiwan's first in 26 years.

The unemployment rate has risen for ten consecutive months, reaching 4.92% at the end of July.  The non-performing loan ratio of Taiwan's financial institutions reached 7.44% at the end of June, or US $30 billion.  Both figures represent historic highs. Stock prices have tumbled 52% since May 2000.

The economic hardship is in part caused by the downturn in the global economy and especially the decline in U.S. demand for Taiwan's information technology hardware.  Taiwan's economic troubles have also been exacerbated by the exodus of Taiwan's manufacturing base to China and the accompanying massive outflow of capital and management talents.  Since 1987, Taiwanese investment in China has grown to 70 billion U.S. dollars.  In 2000, government-approved investment in China soared by 108% over the preceding year.  In the first half of this year, investment in China has grown by 24% over the same period last year, with half of the fund going into high-tech industries.  Less than 1% of this capital outflow has reportedly ever been repatriated to Taiwan in the form of profit.

After a quarter century of economic growth and prosperity, Taiwan's economy has reached a crossroads where basic structural changes are needed to sustain continued economic development.  Taiwan needs to shift from manufacturing to service industries.  Taiwan needs to raise the level of its manufacturing base to higher value-added products.  Taiwan needs to invest in research and development for new industries.  To prevent a further exodus of businesses to China, the government needs to improve the investment environment to retain domestic industries and entice foreign (other than Chinese) investments.  The measures are well known to economists: including offering of public land at a reasonable price, lowering business income tax, improving the skills of the labor force through education and training, providing the necessary infrastructure such as cheap water and power, more efficient government assistance to business in environmental assessment, automation to replace labor, and so forth.  The proper solutions will take time and hard work.

The Economic Development Advisory Council's (EDAC's) five panels have reached consensus on 322 proposals, some of which are no doubt excellent ideas in correcting the myriad ills of the island's economy. The most important proposals which have preoccupied the attention of both the media and the DPP administration appear to be the following: First, to discard the "patience over haste" policy on investment in China in favor of a new "proactive openness and effective management" stance.  Second, to implement direct trade, transportation and communications links with China as soon as feasible. Third, to facilitate Chinese investment in Taiwan's business and real estate.

Taiwanese businessmen have been clamoring for removal of the patience over haste policy on the ground that they need China's cheap land and labor to remain globally competitive.  So the U.S. $50,000,000 ceiling on single investment projects will be lifted.  Removing the ban on investment in Chinese infrastructure, however, will have a negative impact on Taiwan's national security.  After all, why should Taiwan help China build roads and airbases which may be used to attack Taiwan?  Encouraging Taiwan's high tech industry to move to China will simply create a business competitor and increase the number of jobless in Taiwan.  Some Taiwanese businesses may benefit from the policy change, but Taiwan's economy as a whole will be weakened and become increasingly dependent on the Chinese economy.  Drinking poison to quench thirst is suicidal.

Establishing direct links with China will lower the cost for Taiwan's businessmen.  However, direct links cannot be implemented without negotiation with Beijing, which has consistently refused dialog with Taipei, unless the DPP government first accedes to Beijing's One China Principle, i.e., surrender Taiwan's independent sovereignty.  How far will the Chen administration bend in order to achieve direct links?  Direct links will definitely imperil Taiwan's security.

 A U.S. Sinologist has estimated that China has already smuggled 6,000 special forces into Taiwan.  Once direct trade and transportation are in place and Taiwan's door is opened to 500,000 Chinese tourists a year, the number of such Chinese troops can be expected to grow manifold.  Taiwan can be brought to its knees with a combination of missile attack and internal subversion then.

As for encouraging Chinese investment in Taiwan, this is also a foolhardy idea.  All Chinese capital is public capital.  When the People's Republic is allowed to buy Taiwanese business and real estate at will, China could soon control Taiwan's economy and thence the Taiwanese people's livelihood.

The three proposals together represent a giant step towards Taiwan's economic and political integration with China.  That is why the pro-unification media and opposition parties are so jubilant.  These proposals also signify a drastic departure from the National Unification Guidelines.  The Guidelines stipulate three stages in relations with China.  In the first stage, China must become a democracy and achieve a standard of living comparable to that of Taiwan.  Direct links with China will be considered only after these preconditions of the first stage are met.  

The DPP administration, with the support of the EDAC, has apparently abandoned these preconditions.  Does this mean that the DPP government has now embarked on the path of giving up Taiwan’s democracy and free way of life in exchange for doubtful prospects of economic recovery and peace with the People's Republic?  This is a question which deserves serious scrutiny.

The Taiwanese people and their leaders need to have more confidence in their own resiliency and their ability to cope with difficult times.  Taiwan's economy is basically sound.  The global economy will fluctuate between boom and bust.  This economic cycle is normal in a free, capitalist economy.  There is no reason to panic and rush into short-sighted, counterproductive policies which would irreparably damage Taiwan's international standing and its economy.  

Opinion surveys have repeatedly shown that a great majority of the Taiwanese people prefer either outright independence or maintenance of the status quo, i.e., preservation of Taiwan's democracy and its independent sovereignty free from the CCP's repressive rule.  Now is the time for the silent majority to rise above partisan politics, oppose the misguided harmful China policy proposals of the EDAC and voice their support for freedom and sane economic remedies.


New White Paper 2001 on Taiwan and its Future

At the beginning of September 2001, a group of major overseas Taiwanese organization issued the third edition of the White Paper on Taiwan and its Future. The paper sets out the views of the overseas Taiwanese community on the important issues surrounding Taiwan's status. The organizations wish to promote a better understanding of Taiwan in North America and Europe.

The paper gives a brief historical background, as well as arguments for acceptance of Taiwan as a full and equal member in the international community from a legal and political perspective. This revised and updated edition takes into account recent developments, such as the March 2000 election of Chen Shui-bian as president of Taiwan, and the affirmation of support of the island by the Bush administration.

Hardcopies are available from the Formosan Association for Public Affairs (FAPA) in Washington DC, 552 — 7th St., S.E. Washington, DC 20003 Tel. (202) 547-3686 Fax (202) 543-7891, while electronic versions in both HTML and PDF format can be accessed on the Taiwan Communiqué website at http://www.taiwandc.org/

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