Backdoor Reunification?

For The Diplomat www.http://the-diplomat.com

From sometime this year, Taiwanese citizens as “natural persons or families”will be able to register certain types of small businesses in a number of Chinese cities and provinces as “individual industrial and commercial households,” China’s Taiwan Affairs Office, the organ responsible for Taiwan-related policies, recently announced. As the move is most likely meant as a pilot project that will eventually be extended – to many Taiwanese facing negative growth in real wages and relatively high unemployment at home – it’s an offer that could sooner rather than later become attractive enough to be considered.

Estimates on the number of taishang, as Taiwanese living on the other side of the Taiwan Strait are called, already range from 1 to 3 million. Official Taiwanese government statistics on them don’t exist, but what political scientists agree on is that the taishang tend to favor the ruling Kuomintang (KMT), which envisions eventual unification, over the opposition anti-unification Democratic Progressive Party (DPP), mainly because the KMT’s Beijing-friendly policy has been making their lives a lot easier. One major reason for therecent re-election of the KMT’s Ma Ying-jeou, commentators say, was the hundreds of thousands taishangwho returned to the island in a timely manner to cast their votes. The calculation is simple: the more Taiwanese that are living in China, the better for Beijing’s quest to achieve unification.

Since 1988, Taiwanese have been allowed to travel and invest across the Taiwan Strait. It has mainly been entrepreneurs who moved to the mainland with U.S. dollars to invest, followed by their Taiwanese employees, spouses and children. The taishang played a crucial role in the Chinese economic miracle, but despite their contributions and rapidly institutionalizing cross-strait ties, they’ve been complaining that their interests in China aren’t adequately protected. In the absence of suitable regulations, they have to go to third parties from which to set up China branches, form joint ventures with Chinese manufacturers, or are forced to register their business in the name of a Chinese proxy (the latter two, of course, being ripe for abuse). It’s likely a fair assumption that most Taiwanese have heard of a taishang who has been cheated out of a horrendous sum, had his or her property expropriated in violation of due process, or has been dragged into court on trumped-up charges by local governments.

In 2010, Taipei and Beijing signed the historic Economic Cooperation Framework Agreement (ECFA), which slashed tariffs on hundreds of goods in cross-strait trade. But the investment agreement the taishang have been longing for remains stuck in the pipeline, deadlocked over a number of issues, the most prominent of which is Beijing’s opposition to Taipei’s demand for international arbitration at the International Chamber of Commerce, as it would imply Taiwanese statehood.

By granting the protection of Chinese law to Taiwanese small businesses initially limited to eateries and retail in the cities of Beijing, Shanghai, and Chongqing as well as Guangdong, Fujian, Jiangsu, Hubei and Sichuan Provinces, Beijing presents a pragmatic approach that if further advanced could somehow function as a way around the thorny issues coming along with a proper investment agreement. It also waters the mouths of wannabe taishang hoping to get a piece of the big China cake. Having a bite of that is particularly tempting as despite much-hyped cross-strait ties, livelihood pressures haven’t eased in recent years for the Taiwanese lower and middle classes. While the island’s elite is seen as feasting through the opening to China, the unemployment rate stood at 4.28 percent in November, significantly higher than those of export rivals Hong Kong, South Korea and Singapore, which have rates between 2 percent and 3.3 percent. The average house price remains at 9.2 times annual household income, unaffordable to many in a society where owning a house is a prerequisite to starting a family, and perhaps most importantly, real wage growth is negative.

Moving to China might not seem too bad an idea to many ordinary Taiwanese because of the knowledge that in China’s coastal provinces, wages have risen much faster than in Taiwan, and are set to catch up with those on the island in a few years time. Also, a closer look at the islanders’ characteristics and history suggests that considerable numbers of them will be willing to make the move. Entrepreneurship has been deeply embedded in the Taiwanese gene ever since the major waves of immigration from the Chinese mainland during the late Ming Dynasty (ended in 1644) when poor Chinese young men, given a chance to cultivate their own plot of land in Taiwan, set up farms, stayed from the spring planting season to the harvest in fall and returned to Fujian Province in winter, earning handsomely by selling their produce there. Centuries later, Taiwan’s entrepreneurial streak got additional input after the Chinese Civil War in 1949, when the retreating KMT troops brought with them Chinese businessmen and refugees fleeing Mao Zedong’s communists. In the absence of an industrial base to provide opportunities, many among this wave of immigrants resorted to open small stores and eateries on the island.

In interviews, academics in Taipei varied on their assessments of whether Beijing’s “individual industrial and commercial households” policy will succeed in luring them.

Hu Sheng-Cheng, an economist at Academia Sinica, Taiwan’s most renowned research institute, cautioned that although the Chinese State Council announced that there will be a new regulation, it has yet to provide details.

“The actual effect is difficult to assess but likely not big. Although the central government puts in place the law, it will not necessarily make a real difference as the major obstacle taishang face has always been local governments’ many kinds of rules,” he argued.

Hu furthermore pointed at yet another turn-off.

“As the capital threshold to open a business in the catering or retail sector is low, the Taiwanese have to expect fierce competition. Also, as most Taiwanese entrepreneurs who recently moved to mainland China are supported by consortia or large enterprises, the best time may have already passed for individuals to set up something over there.”

But Hsu Yu-fang, a political commentator and associate professor at National Dong Hwa University’s Department of Sinophone Literatures, believes that Beijing’s move will pay off, nonetheless. He sees the new rule as bound to tie the Taiwanese economy closer to the mainland.

“It’s very clear that the creation of dependence is the purpose. Apart from rolling out the red carpet for petty entrepreneurs, the Chinese government also energetically demands that Taiwan opens more to Chinese investment,” Hsu said.

He elaborated by painting a future scenario in which Chinese businesses control a large share of the Taiwanese economy while the Chinese economy in turn locks a lot of Taiwanese capital and talent.

“Then, Taiwanese people’s basic livelihood needs will rely decisively on China. It’s unimaginable that politics won’t be affected,” Hsu added.

Slip by the mainland, doom for Taiwan?

For Asia Times www.atimes.com

Taiwanese elected Ma Ying-jeou of the Beijing-friendly Kuomintang (KMT) for another four-year presidential term. Cross-Strait business ties will be further strengthened, and Beijing is certain to make all sorts of mouthwatering economic concessions to lure the island into political talks. But the Taiwanese cannot take for granted that China’s economy will stay on an upward trajectory for much longer. If China slows, the island, having grown dependent, might be dealt a harder blow than others in the region.

 

 

China is Taiwan’s largest trade partner by far. Taiwanese investment in China, direct and via a third place, totaled US$2.6 billion in 2010, and following the January 2011 implementation of the cross-Strait Economic Cooperation Framework Agreement’s (ECFA) “early harvest list”, which is comprised of goods qualifying for tariff concessions, the island’s exports to the mainland are expected to have hit the record high of US$120 billion in 2011. It was predicted that ECFA would increase Taiwan’s 2020 GDP by about 5.3 percent from the current trend line, and that as continuous global downturn has lowered the demand for the island’s electronics in Europe and the United States, Chinese consumers would eventually make up for it because the tariffs of more than 90 percent of the items on the early harvest list will be reduced to zero. Hence, until fairly recently, Taiwan was still expected to achieve growth in exports of more than 5 percent in 2012.

 

 

But toward the end of last year, figures turned less rosy. Across the Taiwan Strait, where 28 percent of Taiwan’s exports were shipped to in 2010, possibly to add another 5 to 10 percent if “ghost exports” via Hong Kong to the mainland were to be included, frightening signs have been emerging that the booming economy is rapidly unravelling. As demand in China and abroad for what Chinese factories churn out slackens, manufacturing activity is shrinking, and growth of money supply and exports slowing. Property prices are declining and so are China’s foreign exchange reserves.

 

The Chinese slowdown already left its toll on Taiwanese exporters. In the last two months of 2011, with -2.4 percent in November and -3.0 percent in December, shipments to the mainland accounted for negative growth year-on-year, and as November’s orders from China increased by just 0.14 percent year-on-year, also export orders for Taiwanese goods from China are rapidly decreasing to the point of near-zero growth.

 

According to popular local views, Taiwan’s economic health hinges on China, and developments on the mainland will make or break the island’s economy. However, the pictures experts interviewed by Asia Times Online painted were not necessarily as alarming.

 

Prof. Ronald A. Edwards, a China expert, holds that if mainland China’s economy began to stagnate, the impact on Taiwan’s economy would not be very significant. This is because, according to him, Taiwanese companies active in China are insulated somewhat from fluctuations in Chinese consumer demand.

 

“Although Taiwan has become one of mainland China’s top Foreign Direct Investment (FDI) countries, the investment is strongly centered in regions with high concentrations of final product assembly lines and free trade zones (FTZs), most notably in Jiangsu and Guangdong”, Edwards said.

 

This shows that while mainland China has become Taiwan’s leading export destination, these exports are largely intermediate goods that are exported from Taiwan to Taiwanese-owned firms in mainland China where final assembly takes place.

 

“The goods are then exported to North America and Europe”, Edwards said.

 

He nonetheless acknowledged the possibility of feedback effects where a drop in China’s imports affects the US and Japan, which in turn would be felt in Taiwan.

“However, based on some back of the envelop calculations, I would expect these indirect effects to be small as well.”

 

Other observers have been suggesting that it would actually be the Taiwanese tourism industry suffering the most by problems in China. Last year about 1.79 million mainland Chinese travelled to the island, with the industry estimating an influx of 2 million this year. Voices warning a significant drop would hit Taiwan’s economy relatively hard seem convincing as in 2010, spending by Chinese tourists despite limitations on their numbers – back then 3,000 per day – already accounted for 0.72 percent of Taiwan’s GDP, and since 2008, it was US$3.1 billion they left on the island. Edwards, however, predicted that even if mainland China’s economy began to lose steam considerably, Taiwan’s tourism industry would not be overly affected.

 

“If the mainland economy goes sour, there will still be a small share of people there that are willing and able to visit Taiwan. With a population of 1.3 billion, that still amounts to be a huge number [if neither Beijing nor Taipei would artificially limit the number of trips].”

 

In terms of comparison with Taiwan’s rivals in trade, South Korea and Japan, Edwards argued that Taiwan wouldn’t lose more than them because of a Chinese slowdown but instead even less.

 

 

“Relative to Japan and South Korea, Taiwan suffered little from the 1997 Asian Financial Crisis. One main reason is that a large share of Taiwan’s economy is made up of small and medium sized businesses, unlike Japan and South Korea. Since smaller firms can more quickly adjust, this feature might additionally cushion Taiwan’s economy from shocks to demand for Taiwanese exports.”

 

 

Hu Sheng-Cheng, an economist at Taipei’s renowned research institute Academia Sinica, too, started by pointing out that the taishang, as Taiwanese businesspeople active in China are commonly called, and especially the ICT manufacturers among them, mainly use the mainland as production base and then export the goods to other countries.

 

“They don’t obviously suffer from shrinking mainland Chinese domestic demand but instead from the slow European and US markets. Neither are the taishang that target the mainland’s food sector, such as Want Want or Masterkong, much affected by the economic slowdown there”, Hu said.

 

“But being dealt a harder blow is a growing number of Taiwanese companies that produce cars such as Yulon, as well as makers of other sophisticated goods meant for the mainland Chinese market.”

 

Hu disagreed with the notion that Taiwan is less vulnerable than Korea and Japan to a Chinese slowdown. He pointed out that according to Chinese custom data, Korea exported 20 percent more to China than Taiwan did in 2010, and that also Japanese exports to China topped Taiwan’s by 50 percent that year.

Hu subsequently brought into account that Korea’s FDI in China roughly equals that of Taiwan, and that Japan’s is 2.2 times higher than the Taiwanese.

 

“But Korea’s GDP is double that of Taiwan while Japan’s is 5.5 times bigger than Taiwan’s. The importance of the Chinese market is therefore significantly lower to the Koreans and the Japanese than to us. That means their sensitivity to a Chinese slowdown is also lower.”

 

 

 

Taiwan’s opposition licks its wounds

For Asia Times Online www.atimes.com 

TAIPEI – Sunday’s presidential and legislative elections in Taiwan saw Beijing-friendly President Ma Ying-jeou and his Kuomintang (KMT) triumph. Ma convincingly defeated his main challenger, Tsai Ing-wen, chairwoman of the anti-unification Democratic Progressive Party (DPP), while People First Party (PFP) contender James Soong emerged as a distant also-ran.

In the election for the Legislative Yuan – parliament, Ma’s KMT secured a comfortable majority, taking 64 of the 113 seats in

parliament to the DPP’s 40. Although opinion polls painted the presidential race as neck-and-neck, the incumbent romped home comfortably with 51.6% of the vote while his DPP challenger secured 45.63% and Soong just 2.77%.

Tsai seems to have somehow lost votes on the home stretch, likely due to concerns that she would tinker with Ma’s cross-strait policies with disastrous results. Soong’s disappointing performance played a role as he was expected to tap deeply into Ma’s voter base to the benefit of Tsai.

With the public’s will expressed so unequivocally, it seems Ma and his government will enjoy a four-year term without major adversaries to be reckoned with – outside the KMT. The results have thrown the DPP into a deep crisis, with the party seemingly fighting a losing battle.

Whatever the reasons for these results, Taiwan will have to live with them. A page has been turned, and it is clear that Tsai’s familiar face won’t be on the scene. In line with DPP tradition, she immediately announced her resignation as chairperson on her defeat and will step down on March 1. A charismatic rising star to fill her shoes at the DPP is conspicuous by his or her absence.

In an interview with Asia Times Online, Chen In-Chin, a professor at Taiwan’s National Central University’s Graduate Institute of Law and Government, explained what other tremendous difficulties the DPP faces.

“If the DPP ever wants to return to power, it must take the secret alliance between Washington and Beijing seriously. Because those two have plotted a trade-off to control Taiwan”, he alleged.

Chen argued that during the campaign period, the US repeatedly intervened to help Ma and in turn Beijing, to keep Sino-US relations on an amicable trajectory.

Chen singled out the visit to Taipei just two days before the polls by Douglas Paal, a former de facto US ambassador to Taiwan. Paal told the Taiwanese public that Ma’s Beijing-friendly cross-strait approach was the only path forward for the island.

Chen pointed to other events to back up his argument. “During her visit to the US last year, Tsai penned a letter to US President Barack Obama. In it, she tried to assure him that if elected, she wouldn’t provoke Beijing. But now it has been found out that Obama forwarded this letter to the KMT.”

This textbook example of realpolitik applied by Washington for the sake of gaining Beijing’s concessions on the many other issues the two have frictions over, such as North Korea and disputed waters in the South China Sea, have not only spoiled Tsai’s electoral chances this time around but also created a potentially insurmountable obstacle for the DPP’s future, according to Chen. He believes the party will be forced to break with a staunchly pro-independence fringe that alienates the crucial moderate vote.

“That Tsai’s attempt to satisfy both the independence-leaning and moderate party wings went wrong is signaled by the fact that the [fiercely pro-independence] TSU [Taiwan Solidarity Union] won three seats in the new legislature; they had none in the old. These seats were directly taken from the DPP.”

Chen predicted that the TSU would make its hardcore pro-independence voice heard vociferously in the legislature, and that this will be detrimental to the DPP as the moderate public might not bother to differentiate between the two anti-unification parties.

“China has very cleverly reached this deal with the US as it leaves very little scope for pro-independence currents in the DPP. The party will have to ponder a lot about this unless it accepts eking out an existence as a protest movement,” Chen said.

In terms of cross-strait relations, after having jointly achieved Ma’s re-election, this US-Sino cooperation won’t make headlines again any time soon, Chen believes. Since Chinese President Hu Jintao will be busy arranging the Chinese Communist Party’s transition of power scheduled for September and Obama will be focused on his re-election bid for November.

“Until then, for both Beijing and Washington, the fewer events and developments related to cross-strait issues, the better.”

On the domestic front, Ma’s clear win means he will not need to introduce any major reforms, Chen said. However, he believes Ma will face considerable challenges when composing and managing his cabinet. As in Taiwan politics there is no such a thing as a shadow cabinet introduced by presidential candidates, it’s not year clear who Ma will select and whether current premier and vice president-elect Wu Den-yih will play a role.

“Ma has to be careful with personnel decisions. There are fierce power struggles between Wu and the mayors of New Taipei City, Eric Chu, and Taipei, Hau Lung-pin. Also, Ma tends to prefer technocrats for cabinet posts, but if he is seen as promoting them too enthusiastically, he’ll get in trouble with the party heavyweights.”

Chen explained that the “technocrat model” much favored by Ma already failed once. When Ma took office in 2008, he initially appointed renowned academics for cabinet posts, such as Liu Chao-shiuan, who became his premier, irrespective of the KMT sub-factions’ wishes.

Liu with his cabinet resigned en masse in 2009 as scapegoats for Ma’s extremely poor handling of Typhoon Morakot. In order to pacify the KMT sub-factions, Ma had then to appoint as his premier Wu Den-yih, who only earned a bachelor’s degree and worked for a local newspaper before starting his political career.

“This will be Ma’s dilemma when facing European and US debt crises and global slowdown this year; on the one hand he needs highly skilled figures for ministerial posts for efficiency, on the other he has to mind his arrangements for succession and keep power struggles within the KMT from erupting.”

As examples of technocrats who Ma might seek to get into his cabinet, thereby risking snubbing party careerists, Chen singled out Vice Premier Sean Chen, an expert on finance and economics, for the premiership. He also noted the current Minister for Interior Jiang Yi-Huah, who according to Chen is a close friend of Ma’s, and also former Government Information Office Minister Su Jun-pin, who was sent by Ma to the DPP-stronghold Tainan to win a legislative seat. Su, who presumably made the sacrifice to help the KMT in the south to canvass presidential votes, expectedly failed but coordinated closely with Ma during the campaign.

“As Ma must appease Wu Den-yih, it will be telling how he manages to arrange figures like these. If he succeeds in bringing them into appropriate positions, it means he is wearing the breeches in his government. If not, it shows Wu is”, Chen said.

Taiwan vote may trip up US and China

For Asia Times Online www.atimes.com

TAIPEI – In their presidential and legislative elections to be held simultaneously on January 14, the Taiwanese will either re-elect Ma Ying-jeou of the Beijing-friendly Kuomintang (KMT) or opt for a somewhat weighty change.

Presidential candidate and chairwoman of the anti-unification Democratic Progressive Party’s (DPP) Tsai Ing-wen runs neck-and-neck with the incumbent in opinion polls, while James Soong of the People’s First Party (PFP) trails far behind.

Needless to say, Beijing is all for Ma. But Washington is also keeping its fingers crossed firmly for him because during his term, Ma, much unlike his pro-independence predecessors Lee Teng-hui and Chen Shui-bian, didn’t complicate Sino-US relations in the slightest.

From fears that China’s military leaders could gain at the expense

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of civilian ones to Beijing’s supposed ability to keep North Korea from launching missiles toward South Korea or Japan – Washington isn’t short of reasons for cross-Taiwan-Strait relations and in turn Sino-US ties to stay on an amicable and predictable trajectory.

But a leadership change in Taipei is seen by many as a potential spoiler. Beijing is deeply suspicious of Tsai, who in the mid-1990s constructed an infamous doctrine that saw China and Taiwan’s ties as a “special state-to-state” relationship, bringing the Taiwan Strait to the brink of war. The Chinese Communist Party’s (CCP) highest echelons have already said that cross-Strait business would not go on as usual if Taiwan’s next leader doesn’t recognize that the island is part of China.

Beijing wants to avoid repeating mistakes of the past. Threats of war shortly before Taiwanese elections have led to the exact opposite outcome Beijing had wanted. This time around, the Chinese have allegedly asked the Barack Obama administration, privately, for help. It seems very much as if the request was granted. Ma’s domestic opponents see conspiracies at work and listed supposed examples for hidden US intervention in the island’s presidential election on Saturday to the benefit of the easy-to-handle incumbent fearing for his re-election.

• In September, when Tsai visited the US, an anonymous American official told the Financial Times that Tsai failed to convince the Obama administration that she would handle cross-Strait relations well. The leak delivered a blow to Tsai’s domestic standing as it was suggested that she lacks the ability to master the delicate and crucial balance between US and China.
• Washington allegedly has made efforts to counter rampant rumors that affected Ma negatively, such as speculation the Obama administration wants to abandon the island to serve US national interest better. Last year saw more high-ranking US officials visit Taipei than the past few years combined. Previously, Washington had kept official visits to Taipei at a minimum as they implied Taiwanese statehood and in turn complicated Sino-US relations.
• Weeks before the polls, the island was nominated for inclusion in the US Visa Waiver Program. This move, which just could have been announced shortly after the elections for the sake of fairness, is regarded as a major shot in Ma’s arm as US visa requirements for Taiwanese – unfavorable compared to citizens of other developed countries in the region – have long gnawed at islanders’ self-esteem.
• Taiwan’s National Security Council (NSC), which advises the president on security issues, in early January published a press release on a briefing by the American Institute in Taiwan (AIT), the US’s de facto embassy, on the latest US Defense Strategic Guidance. That the briefing took place isn’t unusual, but in the past details of such talks were kept largely secret. That the AIT didn’t protest against the NSC making the whole story public is seen as proof of a tactical agreement between the two in order to strengthen Ma.

  Yet, despite the alleged US interventions, with just days left before the polls, no sound observer could confidently rule out that the eventual prospect of Washington and Beijing eventually facing a president Tsai.

  To handle her pro-independence predecessors, Washington crafted and brought to perfection the “dual deterrence” tactic.

  According to the concept, the US encourages one side until it become too self-confident while at the same time ignoring the other, until it feels just about to be abandoned. Then, the direction of US sympathy is abruptly shifted. In this way an ambiguous balance has been struck. Neither Beijing nor Taipei can be sure to what extent the US would interfere in a conflict, so the two avoid embarking on reckless adventures in the first place.

  According to political scientists interviewed by Asia Times Online, the policy of “dual deterrence” will remain in place and has never been dropped – though since Ma took office in 2008 it has been barely noticeable.

  “The US policy will not change whoever wins in Taiwan. It is in US national interest to have this policy, as it is about avoiding a cross-Strait confrontation becoming a conflict involving the US and the People’s Republic of China,” said Steve Tsang, director of the University of Nottingham’s China Policy Institute.

  Also John F Copper, a Stanley J Buckman professor of international studies at Rhodes College in Memphis, Tennessee, holds that very little if any change in US policy would occur if Ma wins the election, and that a Tsai win also wouldn’t necessarily lead to dramatic turns and twists.

  “If Tsai wins, the US will issue her a warning, perhaps more than one. The Department of State will certainly remind her of America’s one-China policy, how unhappy the US was with Chen Shui-bian, and furthermore that she should expect a very negative reaction if she pursues independence,” Copper said.

  Anyway, Tsai will almost certainly seek to avoid turning US-Taiwan relations testy, according to Copper, and he furthermore pointed out that Tsai didn’t mention the issue of Taiwanese independence during her campaign but instead repeatedly stated that she wants better relations with China.

  “I think she means it and needs it. Taiwan’s economy has slowed recently, and Tsai would not want to oversee a sharp downturn or recession as Chen Shui-bian experienced after he was in office less than a year [2000]. She no doubt realizes that she must cooperate with the KMT in the Legislative Yuan [Taiwan's legislature] and pursue policies that will facilitate economic stability and growth.”

  As for China’s leadership, it could take some action in the form of economic pressure if things run counter to its wishes on the island, Copper said.

  “China can do serious damage to Taiwan economically, but I don’t think it wants to. It’s unlikely that Chinese leaders see that as wise or in China’s national interest unless there is a declaration of independence or markedly increased Japanese influence [over Taiwan]. They feel that time is on their side, and Tsai’s win wouldn’t alter that.”

Taiwan’s Project Diving Dragon resurfaces

For Asia Times Online www.atimes.com

TAIPEI – Recurring reports that countries other than the United States are helping Taiwan build diesel-electric submarines domestically go back a decade. According to various articles, it’s either the Western Europeans, Russians or Indians who are clandestinely concocting a submarine plan with the Taiwanese.

While the notion that any country able to build subs would choose to so profoundly snub China appears unlikely, the question arises as to why these rumors persist.

An island and its mythical being
Then-United States president George W Bush in 2001 approved the sale of eight conventional submarines to Taiwan, but the deal has been in limbo ever since. While the US ceased building diesel-electric subs decades ago, the Western European countries that do still produce them  likely fear reprisals from Beijing for supplying Taipei with the technology.
In the 2000s, with pro-independence Taiwanese president Chen Shui-bian in power and the Taiwan Strait constantly on the brink of war, a solution that ostensibly suggested itself was that the Taiwanese build their own subs.

While there have yet to be credible signs that “Project Diving Dragon” was ever alive and kicking, or any alternate Taiwanese plan for submarines, rumors of its existence refuse to die. Intriguingly, such rumors have surfaced at even shorter intervals under Chen’s successor, Ma Ying-jeou, who says he doesn’t want an arms race with the military power across the Taiwan Strait.

Leaps forward – sudden and great
In late 2010, it was suggested that the Taiwanese navy had used a Russia trip by a Taiwanese ship and arms builder, the China Shipbuilding Corporation Taiwan, in late 2010 as cover for secret negotiations. Though apparently seeking Russian expertise in building ice-breaking ships, the genuine mission was reportedly talks on building diesel submarines in Taiwan.

According to another report in May, Washington proposed and Taipei accepted a deal for four subs instead of eight in order to revive the decade-old deal made with the Bush administration.

A few weeks later, the Taiwan Navy was said to have test-fired indigenous Hsiung Feng II (HF-2) ship-to-ship missiles from one of its two old Dutch-built Hailung class subs, suggesting the Taiwanese had made only two subs fit for combat with a new, “beyond-vision strike capability”.

However, the most recent news then broke in mid-December, with reports that Taiwan was persuading European submarine building experts to travel to the island to train Taiwanese in the specialized type of welding used on submarines, while naming India as an potential alternative supplier of submarine technology.

Not so subtle inconsistencies 
For the time being, only the story on the HF-2 test-firings has been proven false.

The Hailungs, it turns out, still have problems with just launching torpedoes from old fire control systems and have “absolutely no capability” of launching anti-ship missiles from their torpedo tubes, a retired Taiwan Navy engineer told Defense News.

Some of the reports in question have rightly pointed out that indigenously building diesel-electric subs isn’t child’s play, warning that Taiwan could end up with flawed and prohibitively expensive boats and reminding that “Project Diving Dragon” never got the official nod from the Ministry of Defense in the first place.

Among the last weapons Beijing wants to see under Taipei’s command, submarines are among the very few platforms that deserve the term “game-changer”. This is particularly the case with Taiwan. If the island ever had to defend itself against a Chinese attack, diesel-electric subs could make a difference by prolonging the conflict so that things become dicey for Beijing.

Unlike Taiwanese fighter jets, which would have a hard time taking off or returning to base after Chinese ballistic missiles destroyed runways during the opening hours of conflict, submarines could hold out for significantly longer. In waters east off the island, they could – together with the Taiwanese fleet of surface combatants – open a corridor into the western Pacific for the US Pacific Fleet. This would be enormously detrimental to Beijing’s interests as it lowers potential US losses, easing a US president’s decision to order forces into the theater.

Taiwanese subs, if not built too large, could also ensure that any Chinese attempt of a large-scale amphibious landing incurred large losses in the shallow Taiwan Strait near to the coast. A bit farther flung but not entirely unrealistic is the notion that Taiwanese subs could block China’s ports, taking aim at the mainland’s economy.

Chinese breath of fire and brimstone
In October, economists Andreas Fuchs and Nils-Hendrik Klann at the University of Goettingen in Germany published a paper that gave a mild foretaste of what would be in store for any country daring to assist. Fuchs and Klann demonstrated that world leaders who have defied Beijing by welcoming the exiled Tibetan leader the Dalai Lama face an average 8.1% annual loss of exports to China for up to two years.

Euro-zone countries that in theory could play a role in Project Diving Dragon are not likely in the mood for any such shenanigans, which would likely irk China much more than any hosting of the Tibetan religious leader. Resource-rich Russia, which hopes to benefit from the stellar economic growth of its resource-hungry neighbor, is unlikely to consider anything of the sort.

This leaves only India. But Delhi does not have an indigenous conventional submarine construction capability. The Project 75A/76 program (the follow-on plan for six French Scorpene class diesel-electric submarines currently built in India) envisions help from either Europe or Russia, according to John Pike, director of the GlobalSecurity.org think-tank. By transferring technologies to Taiwan, India would risk jeopardizing a program deemed crucial in keeping up with China’s naval modernization.

Besides, as China sees all weapons sales to Taiwan as “splittist”, India can take it for granted that China would support separatist insurgencies in India in retaliation.

Political will in Taipei is also likely lacking. Lai I-chung, a member of the research body the Taiwan Thinktank, told Asia Times Online that Ma and his ruling Kuomintang party (KMT) had in the past decade opposed subs because they saw them as offensive and overly expensive weapons that would destabilize the situation across the Taiwan Strait.

Lai said that from 2000 to 2008 – when the KMT was in the opposition but held legislative majority – it blocked a special budget for subs over 60 times.

“But this all of a sudden changed in January 2011,” Lai said. “In a surprise statement, Ma named subs and new F-16s [fighter jets] as Taiwan’s two preferred weapon systems for purchase. Nobody knows why he changed his mind.”

Tsai Ming-Yen, chairman of the Graduate Institute of International Politics at Taiwan’s National Chung Hsing University, suggested that the sub stories could have to do with Ma wanting to calm public fears before he starts political talks with China if he wins a second term in the presidential elections to be held on January 14, particularly over a peace agreement he’s pledged to seek with the mainland.

“By telling the public he can build subs in Taiwan, Ma is reassuring them that the peace agreement won’t be detrimental to Taiwan’s security,” Tsai said.

Gavin Greenwood, a consultant with the Hong Kong-based security risk management consultancy firm Allan & Associates, has another take on Ma’s u-tune. He said that from Taiwan’s perspective, routine reminders to the US over undelivered arms packages served ulterior purposes.

“It gives Taipei some leverage on the more ‘doable’ deals – upgrades of the F-16 fleet and Patriot systems and delivery of the Blackhawk helicopters for example. It also fends off domestic opponents by seeming to strive for greater defenses against China with little risk of actually having to acquire – and pay – for the actual kit,” Greenwood said.

Steve Tsang, director of the University of Nottingham’s China Policy Institute, said that even if Project Diving Dragon and other such plans don’t exist, allowing rumors to gain credibility is not too bad an option for the Taiwanese.

“If Taiwan should not develop an effective submarine force but could get the only power that will threaten its existence to divert a significant part of its military budget to develop an anti-submarine capability, it will mean less being spent on items that can pose a real threat to Taiwan’s existence,” Tsang said.

解读台湾地区领导人选举 谁将成最后赢家

核心提示：《亚洲时报》12月21日刊载驻台北记者Jens Kastner 的文章称，目前，台湾地区“总统选举”和“立法委选举”已经进入倒计时。根据台湾国立政治大学未来事件交易所12月18日公布的结果显示，平均来说，参与预测的人“赌”蔡英文可有望获得51.9%的选票，马英九将获得41.6%的选票，而宋楚瑜将仅获得8.6%的选票。据称，该交易所对先前选举的预测准确率相对较高。

2012年台湾地区领导人选举国民党候选人 马英九

2012年台湾地区领导人选举民进党候选人 蔡英文

2012年台湾地区领导人选举亲民党候选人 宋楚瑜

《亚洲时报》12月21日刊载驻台北记者Jens Kastner 的文章称，目前，台湾地区“总统选举”和“立法委选举”已经进入倒计时。2012年1月14日，台湾地区“选民”将在与北京交好的国民党主席马英九（现任台湾地区领导人）、反对海峡两岸统一的民进党主席蔡英文和亲民党主席宋楚瑜之间做出选择。

由于台湾地区民意调查人员存在政治偏见，因此其民意调查结果也是出入非常地大。不过，根据台湾国立政治大学未来事件交易所12月18日公布的结果显示，平均来说，参与预测的人“赌”蔡英文可有望获得51.9%的选票，马英九将获得41.6%的选票，而宋楚瑜将仅获得8.6%的选票。据称，该交易所对先前选举的预测准确率相对较高。

不用说，北京自然会担心蔡英文当选。然而，马英九担心其再次竞选“总统”的确令人吃惊。去年，台湾本地生产总值增长了10.8%，与北京签署了16项协议，使得海峡两岸关系制度化并使台湾对大陆出口关税有所减少，而且台湾地区人民几十年来对海峡两岸将爆发毁灭性军事冲突的担心也变成了一件很遥远的事情。

事实上，马英九的竞选工作人员没有努力使台湾选民相信民进党获胜将使两岸关系、反过来使经济陷入某种混乱，而是一直在花费大量的精力指控蔡英文及其身边的人涉嫌欺诈。最近一直热议的“宇昌案”就是出自他们之手。

与此同时，蔡英文一直呼吁合理地让台湾地区低、中等收入阶层的人们分享大陆贸易这块大蛋糕。因为尽管两岸关系改善为台湾地区带来了经济利益，但台湾地区的失业率仍在4.3%左右，而且人均收入不超过2万美元。贫富差距正在扩大。

观察人士一直预言称，当此次竞选形势真的对马英九不利时，北京将会介入；但这一次并不像北京在上世纪90年代中期所做的那样，当时北京向台湾附近海域发射了弹道导弹，姿态强硬的台湾地区“选民”通过支持“亲台独”的“总统”候选人李登辉使其（李登辉）获得绝对优势做出了回应。

面对即将到来的台湾“总统选举”，台湾地区人民希望大陆表现出惊人的善意，比如说宣布象征性地撤掉瞄准台湾的一些军事资产，或同意与台湾签署自由贸易协定。然而，12月16日在人民大会堂发表演讲时，中国副主席习近平并没有承诺如果台湾地区人民选择马英九的话大陆会对台湾做出此类举动。

香港《南华早报》援引习近平的话称：“如果台湾地区否认‘九二共识’，海峡两岸的谈判将不会继续下去，而且过去海峡两岸签署的协议也不会得到履行。两岸关系将回到过去的动荡局势。”

文章指出，长期以来，民进党一直否认“九二共识”的存在，将其视为中国共产党与国民党旨在实现两岸统一目的的结果。如果蔡英文当选台湾地区领导人，她将否认“九二共识”，而且台湾经济也将因此受到严重影响。其中，台湾的出口商、银行、旅游业和农业部门以及大陆的台湾商人和实业家将受到打击。原本相对较高的失业率将有可能继续升高。

2012年1月14日，台湾地区“选民”不仅将选出“总统”和“副总统”，而且还将选出113名“立法委员”。文章指出，从历史上来看，民进党从未赢得“立法委员”的多数席位，即使蔡英文可能真的有希望成为台湾地区的下一任“总统”，其所在政党这次也不太可能在“立法委员选举”中获得优势。

TAIWAN GETS READY TO VOTE

For Asia Times Online www.atimes.com

Punters put DPP ahead in three-horse race

By Jens Kastner

TAIPEI – The countdown to Taiwan’s combined presidential and legislative elections is on, and there’s little doubt that it will be a thrilling one.

On January 14, voters on the island will have the choice between incumbent Ma Ying-jeou of the Beijing-friendly Kuomintang (KMT), Tsai Ing-wen of the anti-unification opposition Democratic Progressive Party (DPP), and the People’s First Party’s (PFP) James Soong Chu-yu, who like Ma is pro-eventual unification but threatens to tap into Ma’s voter base to the benefit of Tsai.

Their respective appeals: Ma can highlight his historic achievement of having turned arch-enemy China into the guarantor of the island’s prosperity; Tsai promises social justice; Soong

portrays himself standing above political feuding for the common good.

Results of opinion polls in Taiwan vary notoriously according to the pollsters’ political biases. However, National Chengchi University’s Exchange of Future Events, which doesn’t ask people who they vote for but instead how much money they would bet on a certain outcome, on December 18 published its findings, according to which on average participants bet that Tsai can expect 51.9% of the votes, Ma 41.6% and Soong 8.6%. The exchange has a history of relatively high accuracy in previous elections.

Needless to say, Beijing dreads a Tsai win.

Aces up Ma’s sleeve
That Ma finds himself in a position fearing for his re-election is surprising indeed at first glance. His administration not only oversaw stunning gross domestic product (GDP) growth of 10.8% last year, signed 16 agreements with Beijing, which institutionalized cross-Taiwan Strait relations and slashed hundreds of tariffs on Taiwanese exports to China, but also turned decades-old fears of devastating military conflict across the strait into a somewhat distant matter.

Instead of making plausible to the Taiwanese electorate that a DPP win would cause cross-strait relations, and in turn also the economy, to become a certain mess, his campaign staff expended most of their effort on accusing Tsai Ing-wen and figures around her of crookedness.

As their latest “masterpiece”, the Ma team dug up the “Yu Chang case”, claiming that when serving as vice premier Tsai once aided a biotech start-up that her family subsequently invested in, only to be found out for doctoring dates on documents they presented to implicate Tsai.

In the meantime, the DPP’s candidate has been vociferously demanding a reasonable share of the big China-business cake for the low and middle income classes. Tsai’s calls fall on fertile ground as despite lucrative cross-strait ties, the unemployment rate stands at around 4.3%, significantly higher than those of export rivals Hong Kong, South Korea and Singapore, and per capita income refuses to rise over US$20,000. The wealth gap is increasing, and average house prices remain at 9.2 times annual household income.

Beijing as clumsy as ever 
Observers have all along anticipated that when things turn really dicey for Ma, Beijing will step in; but this time around not like it did in the mid-1990s, it launched ballistic missiles into waters off Taiwan, and defiant voters reacted by handing pro-independence candidate Lee Teng-hui a landslide victory.

In the run up to the coming elections, what was expected was some rather spectacular show of goodwill, such as an announcement on a symbolic withdrawal of some military assets targeting Taiwan or the nod to a free trade agreement Taipei wishes to sign in order to better compete with South Korea, its main trading rival.

Yet, this notion was somewhat belied on December 16. In his speech at the Great Hall of the People, China’s Vice president Xi Jinping, who is all but certain to become the nation’s next leader, didn’t promise the Taiwanese new goodies if they vote for Ma but instead – indeed much like the high-ranking Chinese Communist Party (CCP) figures of the past – resorted to making clear what’s in stock for the island if not.

“If the 1992 consensus is denied, negotiations across the strait cannot continue and all the agreements made in the past cannot be fulfilled. Cross-strait relations will return to the volatile situation of the past,” Xi said as quoted by Hong Kong’s South China Morning Post.

According to the so-called 1992 consensus, both mainland China and Taiwan belong to one China, but both sides may have their own interpretations what that China is. The DPP has all along denied its existence and sees it as the result of a CCP-KMT conspiracy meant to achieve unification as it basically would rule out Taiwanese independence for ever.

If as president Tsai Ing-wen were to refuse the 1992 consensus and if, as president, Xi sticks to his word, the impact on Taiwan’s economy would be significant. A blow would be dealt to Taiwanese exporters, banks, tourism and agriculture sectors and China-based Taiwanese businesspeople and industrialists, among others. The already relatively high jobless rate would likely rise, and maintaining GDP growth at its current annual pace of 4.5% would be very wishful thinking.

According to Steve Tsang, director of the University of Nottingham’s China Policy Institute, Xi’s threat is regrettable, and not particularly surprising.

“It is Beijing’s way to help ensure Ma will win the presidential election,” Tsang said in an interview with Asia Times Online, adding that it might backfire as it could be seen as an attempt to interfere into Taiwan’s politics by many.

Tsang suspects that it wasn’t a coincidence that Xi was chosen to articulate this warning. “He will be the next leader, and the message is that this represents the medium to long-term view of Beijing. Its reiteration should eliminate any scope of misunderstanding in Taiwan that after Hu Jintao hands over, the new administration in Beijing may relent.”

But, according to Tsang, Xi’s threat does not automatically commit Beijing to reverse all agreements right away should Tsai win.

“The message to Taiwan’s electorate is that there is no alternative to Ma’s approach, and that unless Tsai should accept ‘the 1992 consensus’, a Tsai administration will result in cross-strait tensions returning in due course, but that there is scope to pre-empt this. Simply put, Beijing tells the Taiwanese to elect Ma or get Tsai to embrace ‘the 1992 consensus’.”

Asked how high the chances are for either outcome, Tsang replied: “Ma may be re-elected, but Tsai will not embrace ‘the 1992 consensus’.”

Lame lawmaking; new star rising
On January 14, the Taiwanese will not only elect president and vice president but also 113 legislators. Historically, the DPP has never obtained a legislative majority, and even if Tsai might harbor realistic hopes to become Taiwan’s next president, it is not likely her party will gain the upper hand this time, either.

Hsu Yu-fang, an associate professor at National Dong Hwa University, told Asia Times Online what the election results will bring about for the Legislative Yuan (Taiwan’s parliament) and for the domestic political landscape in more general terms.

“If Tsai wins but the KMT holds a legislative majority, there are two possible scenarios. The PFP could become a key fraction so that we will see increasing DPP-PFP cooperation. But if the PFP fails to win seats, there possibly could be a repeat of the lame Chen Shui-bian era.”

During his tenure from 2000 to 2008, the DPP’s Chen government faced a hostile legislature, routinely leading to near standstills; Hsu’s prediction for a likewise outcome this time around is therefore bleak.

“In order to get back into power, the KMT must boycott the Tsai administration’s policy making. This will then lead to stagnation.”

Hsu subsequently took on how certain scenarios would affect the standings of Ma and Tsai within their respective parties.

“If Ma wins narrowly, he can still lead the KMT though things won’t be as rosy for him as they have been in the previous three years. His influence is to decrease, but he will still have power because of his ability to cultivate successors.”

If Tsai loses by a small margin, but manages to expand the DPP’s total vote count, she can run again in four years in the next elections, Hsu said.

“But if she loses by a 500,000 margin or so, she’ll have to give up her DPP leadership position; because in the party’s succession disputes, Tsai would become the prime target of challengers within the DPP.”

Regardless whether the Taiwanese see Ma or Tsai occupying the top job in 2012, Hsu sees a rising star in Taiwan politics.

“Premier Wu Den-yih [Ma's running mate for vice presidency] is very confident to run himself for the presidency in 2016. His attitude will not only affect the KMT’s inner-party succession struggles but also Ma’s leading if Ma was to be re-elected.”

Hsu holds that Beijing would appreciate Wu’s rise more than those of other prominent KMT figures even though he currently is not regarded as a strikingly popular politician.

“Wu Den-yih is an authentic ben sheng ren [of ancestry that immigrated to Taiwan hundreds of years ago as opposed to those who came with the retreating KMT after the Chinese Civil War in 1949]; he’s KMT old guard; and unlike the prominent middle-aged KMT cadres such as New Taipei City mayor Eric Chu or Taipei mayor Hau Lung-bin, he has no personal dealings with Americans.”

Taiwanese Election Looms

For Asia Sentinel www.asiasentinel.com

Taiwan is bracing itself for combined presidential and legislatives elections to be held on Jan. 14, with many political observers saying the outcome of the poll will not only shape Taipei’s relations with Beijing but will also leave their mark on how the US and China will face each other.

For the job of chief executive, the Taiwanese will choose between incumbent Ma Ying-jeou of the Beijing-friendly Kuomintang, Tsai Ing-wen of the anti-unification Democratic Progressive Party, and James Soong of the People’s First Party, who like Ma is pro-eventual unification.

Their respective platforms: Ma highlights his historic achievement of having turned archenemy China into guarantor of the island’s prosperity. Tsai promises social justice. Soong portrays himself standing above political feuding for the common good. Opinion polls consistently show Ma and Tsai in a dead heat.

Reading the tea leaves 

The only independent Taiwanese polling institute, the Global Views Survey Research Center, unexpectedly closed in the run-up to the elections. Results of other surveys vary significantly according to the pollsters’ political bias. However, National Chengchi University’s Exchange of Future Events, which doesn’t ask people whom they vote for but instead how much money they would bet on a certain outcome, on Dec. 10 forecast that Tsai can expect 50.3 percent of the vote, Ma 41.6 percent and Soong 10.9 percent. The exchange has a history of relatively high accuracy in previous elections.

The list of factors affecting Ma negatively is topped by the perception that despite Taiwan’s stunning GDP growth of 10.8 percent last year, livelihood pressures haven’t eased enough for the lower and middle classes. While the elite is regarded as feasting through the opening to China and in particular from the Economic Cooperation Framework Agreement that Ma signed with Beijing last year, which slashed hundreds of tariffs on Taiwanese exports to China and eased regulations for cross-Strait investment, the unemployment rate stood at 4.3 percent in October. That is significantly higher than those of export rivals Hong Kong, South Korea and Singapore, which have rates between 2 percent and 3.3 percent.

Per-capita income refuses to rise over US$20,000, the wealth gap is increasing, and average house prices remain at 9.2 times annual household income, unaffordable to many in a society where owning a house is prerequisite to starting a family. Making matters worse for the KMT was Ma’s recent proposal for a cross-Strait peace accord, presented to a public remembering well the six decades Taiwan has been threatened and bullied by Beijing.

Ma’s main challenger, the DPP’s Tsai Ing-wen, has recently famously been described as a “Robin Hood-like heroine” by the Associated Press. But many Taiwanese are troubled by the concern that her win would bring about significant deterioration in cross-Strait relations, which in turn simply cannot be good for the Taiwanese economy.

On the island’s TV screens, pundits argue that the main reason the local benchmark index TAIEX has fallen further than other global markets recently is that investors fear Tsai would win.

Apart from campaigning on anti-unification and leftist platforms, Tsai’s vision for a nuclear-free homeland by 2025 is met with skepticism as is her reported objection to the island’s petrochemical industry. And, Taiwan’s women tend not to like her. The unmarried Tsai trails Ma among women by margins of around 5 percent.

Tsai’s wild card, however, could to be James Soong, who is expected to split the vote with Ma. The better he fares, the higher the chances for Tsai. Like Ma, Soong is a KMT princeling and is regarded as running both to settle an old personal score with Ma and to help his PFP secure a foothold in the legislature.

Barring some unforeseen disaster, Soong cannot win the race, but he is certain to tap into the KMT’s voter base, much as happened in 2000 when he ran as an independent, causing a DPP win that brought the ill-starred Chen Shui-bian to office. Many KMT-leaning voters fret over a similar outcome and see Soong as nothing but a grudging spoiler.

Another factor drag down Soong’s candidacy is his 73-year-old running mate, Lin Ruey-shiung, who recently became a laughing stock after having repeatedly claimed that the National Security Bureau (NSB), which is Taiwan’s principal intelligence agency, attacked him at home with 18.75 MHz or 1875 MHz frequency electromagnetic waves in order to “drive him crazy.”

Overseas interference 

As it is obvious that Beijing wants Ma to stay in office, the run-up to the election has been rife with conspiracy theories. The DPP alleged that Taiwan’s Ministry of Transportation and Communications recently brokered a deal between Taiwanese business associations and five major air carriers to give 50 percent discounts on cross-Strait flights in a bid to convince more than 1 million China-based Taiwanese businesspeople to return to Taiwan to cast their votes.

It is said that 70 percent of these expatriates support the KMT and that the business associations as well as the airlines in question were pressured by China.

The Chinese side is hugely suspicious of Tsai Ing-wen due to her role as one of the crafters of the mid 1990s “special state-to-state doctrine” that brought the two sides to the brink of war. Beijing has repeatedly given broad hints to the Taiwanese electorate that a Tsai win could eventually bring about the end of cross-Strait economic negotiations and the purchase of Taiwanese agricultural products as well as leading to reduced visits by Chinese tourists and officials as well as mainland students studying on the island.

According to reports by Hong Kong media, the reason that there was a sudden spike in arrivals to Taiwan by Chinese tourists in November is that on the mainland side it is generally believed that a Tsai win in January could cause a sudden halt to cross-Strait travel.

Washington has also allegedly already begun meddling to ensure that Ma stays in power, keeping cross-Strait relations and in turn Sino-US ones on a predictable and amicable trajectory. As indications, among others, observers cite the visit to Taipei on December 11 by US Deputy Secretary of Energy Daniel Poneman, the highest-ranking US official to visit Taiwan in a decade. His trip is allegedly meant to counter rampant rumors that the US is about to “abandon” Taiwan that likely have affected Ma’s domestic standing negatively.

Rather obviously lending a hand to Ma, who unlike Tsai doesn’t vow to get rid of the island’s nuclear industry any time soon, Poneman used his pre-election stay to let the Taiwanese know that the US supports Taiwan’s participation in the International Atomic Energy Agency (IAEA) and emphasized that nuclear power in the US’ view still is an indispensable part of its energy portfolio.

News that Taiwan will soon become a candidate country to be given visa waiver privileges by the US is also seen in the context of a Washington rescue for Ma for the sake of smooth Sino-US relations.

Post-election politics – all can join in 

The Taiwanese will also elect 113 legislators. As historically the DPP has never held legislative majority, there are concerns that a Tsai win would lead to a situation much like the one between 2000 and 2008 when virtually move by then-president Chen was boycotted by a hostile legislature. In an interview with Asia Sentinel, Chen In-chin, a professor at Taiwan’s National Central University’s Graduate Institute of Law and Government, laid out scenarios and argued that a President Tsai could fare slightly better than Chen Shui-bian.

“It is almost certain that the KMT will obtain a legislative majority; the PFP will pass the five-percent hurdle, enabling Soong to establish a faction,” Chen said, adding that Tsai, if elected president, could possibly enjoy the PFP’s support to get certain legislation passed.

“If Ma stays in office by a narrow win – and he cannot expect to win by a big margin, he will be severely weakened,” Chen said. “Other KMT heavyweights will then fight for positions of power at Ma’s expense and possibly even with the help of informal negotiations with the DPP.”

As KMT figures who might start elbowing themselves toward the top, he singled out Premier Wu Den-yih, New Taipei City Mayor Eric Chu, Taipei Mayor Hau Lung-bin, Parliamentary Speaker Wang Jin-ping, and honorary chairmen Lien Chan and Wu Poh-hsiung.

Even If elected narrowly, Tsai wouldn’t have such difficulties any time soon, Chen believes.

“Here she has an advantage because even a narrow win would be seen as a huge success; it would take some time until rivals within the DPP would dare working toward undermining her position.”

Chen argued, however that whoever wins narrowly, it’s not over till the fat lady sings for Beijing.

“Of course, the Chinese initially will be hugely disappointed because they have supported Ma wholeheartedly. But actually, it’s not totally running against Chinese interests. The certain decentralization of power a narrow Tsai or Ma win would bring about would firstly severely limit the government’s capacity to act in terms of foreign policy, and secondly make attempts to influence politicians much more promising for China.”

When asked how exactly China could expand its clout by targeting individual figures in a political landscape in which power is in the hands of many more players than now, Chen replied rather cryptically.

“There are many thinkable ways how China would make our politicians do its bidding while it waits for the next presidential elections,” he said.

Taiwanese TV goes mainland prime time

For Asia Times Online www.atimes.com

TAIPEI – Taiwan’s cash-starved TV industry is to have easier and quicker access to the mainland China market, giving investors new reason to pump in money to co-productions to titillate the mainland’s one-billion-plus viewers.

On November 30, China’s Taiwan Affairs Office, the body in charge for Taiwan-related policies, proclaimed three steps that will create increased opportunities for TV co-productions brought out through partnerships of mainland and Taiwanese companies. That will be good news for Sanlih E-Television and Formosa TV, the Taiwanese producers of dramas most popular in the mainland.

The process of reviewing and approving the broadcast of television dramas jointly produced by Taiwan and mainland China will be

Dilbert

http://cdn.cindyclips.com/players/1640.html

speeded up. Regular broadcasts of such joint productions will be scheduled during primetime on China Central Television (CCTV), the major Chinese state television broadcaster. And the mainland pledged to generally create more opportunities for Taiwanese entertainers to work in the Greater China market.

Until those measures are implemented, Taiwanese dramas cannot be broadcast during primetime on China’s TV stations because they are considered foreign productions. The review process has long been subject to complaints by the Taiwanese as, according to them, it was subject to displays of official arbitrariness.

TV from Taiwan has been considered in the mainland as cool for at least eight years, when initial cable TV broadcasting there of several Taiwanese TV shows proved hugely popular, and a striking contrast to offerings from CCTV and other state-controlled channels.

On the mainland side: painfully conformist presenters and their stiff guests, all dressed in dark shades of gray and blue; on the Taiwanese side: a flirtatious, sexy, extroverted and vociferous bunch of people. That window was soon closed – the loud Taiwanese style proved a bit too much for the mainland broadcasting authority, the State Administration of Radio, Film and Television, and the rules were tightened in September 2005.

“Hosts and hostesses … have an unshakable responsibility to spread advanced culture and national virtue …,” the authorities decreed, and, as a broad hint directed at the Americanized Taiwanese compatriots, “creep of vulgarity and non-Chinese influences must be halted.”

Even so, the mark left on the mainland media landscape by the Taiwan TV footprint was irreversible. Mainland presenters longing to appear trendy themselves adopted the slang and accent of their Taiwanese counterparts, and inevitably, droves of young Chinese viewers followed suit, beginning to speak and gesture like Taipeiers.

Then, in 2008, the Beijing-friendly Kuomintang (KMT) took over the political helm in Taipei, helping to warm up cross-Strait relations to unprecedented level. Interaction in the arts, as in other fields, was rapidly institutionalized, and 14 co-produced dramas were released in 2009 and 2010 alone.

Taiwanese channels remain unavailable on mainland cable TV, and Taiwanese expats living across the strait (and mainland citizens) must resort to direct broadcast satellite (DBS) to see its offerings.

The island’s film industry is also still waiting to see meaningful liberalization. In 2009, a local mega-hit Cape No.7, directed by Wei Te-sheng, became the first Taiwanese film to secure a mainland release in 17 years after grossing US$15 million at home. The film, which has secured 15 awards, cost only US$1.5 million to make.

Last year, the two sides signed an agreement on intellectual property rights (IPR) protection, which theoretically allows Taiwanese films to enter the mainland market without quota restrictions, but so far no Taiwanese films have been permitted to do so.

The 2010 hit movie Monga, which grossed US$9.8 million, is one victim of continuing restrictions. The gangster film, directed by Doze Niu and starring Ethan Ruan, was controversial even in Taiwan for alleged glorification of organized crime. It was banned from the mainland because Beijing labelled the film “detrimental to China’s good and honest traditions”.

Last weeks’ announcement on cross-Strait TV dramas will give Taiwan’s television industry a long-waited kick-start, according to industry watchers on the island. York Chiou, a professor at Taipei’s Shih Hsin University Department of Radio, Television and Film, told Asia Times Online that the mainland is the biggest possible market for Taiwanese TV dramas mainly due to shared language and culture.

“The mainland audiences have a high degree of acceptance toward Taiwanese productions. It’s very easy for the Taiwanese to be popular in China if only plot and actors are good,” Chiou said. Now that Beijing actively encourages the Taiwanese to cross the strait, production companies as well as actors will feel much more secure when active there as in the past, rules and processes were painfully ambiguous.

Chiou believes that the new measures will lead to an investment wave to the benefit of the Taiwanese TV industry.

“It’s expensive to shoot a good drama, but the investment is difficult to recover with commercials alone. The production companies must rely on copyright income or produce jointly to reduce costs. How much the further opening of the Chinese market will help is illustrated by the matter that in the past, those Taiwanese TV dramas that managed to enter China earned more than two-thirds of their total copyright income from overseas in China alone.”

Chiou, however, cautioned that the Taiwanese cannot take their advantages in trendiness over their Chinese competitors for granted for long.

“TV audiences are very pragmatic; as China’s production standards are rapidly increasing, the Taiwanese will have to be good to stay competitive on the mainland market.”

Taiwanese TV dramas are still way ahead of the mainland’s, particularly in terms of fashion styles and the modernity of scripts and for financial reasons, there’s no other direction to turn for the Taiwanese, Nelson Tsai, a professor at the same department, said.

Budgets for the production of one hour of drama here in Taiwan used to reach NT$3 million (US$100,000); today, they have to make do with less than NT$600,000. The Taiwanese market is so cramped that the expansion to China will benefit business greatly.”

Still, as Tsai points out, Hong Kong’s TV and digital animation industries experienced a similar boom after they began to produce jointly with mainland companies. In many cases, Hong Kong staff were then gradually replaced by mainlanders. The cross-strait story could go in that direction, he said.

“If China goes ahead with the opening, its own TV drama industry will undergo a major upgrade and might eventually uproot Taiwan’s superiority. The Taiwanese government will have to react to the opening measures by coming up with some own precautionary ones,” Tsai said.

It also crucial that productions are popular with audiences on both sides of the strait, according to Angie Chai, known as Taiwan’s “Queen of Idol Drama”.

Politics seen in cheap China-Taiwan flights

For Asia Times Onine www.atimes.com

TAIPEI – A deal Taiwan’s Ministry of Transportation and Communications recently brokered between business associations and five major air carriers seems laudable at first glance. Just on time for the Chinese, or Lunar, New Year – when ticket prices are traditionally sky-high – discounts of nearly 50% on cross-Taiwan-Strait direct flights are to be offered.

However, Taiwan’s main opposition party, the anti-unification Democratic Progressive Party (DPP) has cried foul. They say the timing off the festive deal – new year falls on January 23, 2012 – is suspiciously near presidential and legislative elections to be held on January 14.

The DPP say the discounts are aimed at luring mainland China-based Taiwanese businesspeople back to cast their votes,

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potentially tipping a tight race towards the ruling Kuomintang (KMT) party.

Estimates on the number of taishang, as Taiwanese businesspeople and their families living on the other side of the Taiwan Strait are called, range from 1 million to 3 million. There are no official statistics from Taipei, but it is fairly certain that at least 600,000 Taiwanese reside in Shanghai alone.

Analysts agree that this “constituency” tends to support the KMT.Taishang generally prefer the KMT over the DPP due to the former’s business-friendly approach to cross-strait relations.

As Taiwan doesn’t allow absentee voting, the more taishang that jump on planes to return home and cast their ballots, the better the chances of President Ma Ying-jeou’s re-election.

Statistics from past votes suggest the taishang’s numbers can make a difference. In 2004, then-president Chen Shui-bian was re-elected by a tiny margin of only 23,000 votes; in the municipal elections of 2010, the popular winning margin was about 5%. Opinion polls show the upcoming presidential election as a neck-and-neck race between Ma and Tsai Ing-wen, the DPP’s chairwoman and presidential candidate.

Direct cross-strait flights with cheaper fares will certainly encourage Taiwanese living in China to make a new year visit.

Legitimate expatriate voters in many other democracies, such as the United States, Japan and Britain, can vote by mail. Last year, the KMT government proposed plans to allow absentee voting, but these met fierce resistance from the DPP and civic groups in fear, who cited fears that elections in Taiwan could be easily manipulated by mainland Chinese.

It was argued that as China doesn’t recognize Taiwanese statehood, it doesn’t support the island’s democratic system. Hence it might prevent ballot papers from being delivered totaishang. It was further warned that as China’s entire postal system is closely monitored by the government, ballots mailed from China could easily be doctored, and also that authorities could pressure taishang to keep a copy of their ballot paper to demonstrate their political leaning.

If a taishang couldn’t prove that he or she voted for the KMT, his or her business in China could encounter “difficulties” in in one way or another, this school of thought held.

“There are millions of Taiwanese business people working in the PRC [People's Republic of China], and absentee voting might be manipulated by the PRC,” said Central Election Commission vice chairman Liu I-chou on December 15, 2010, effectively bringing the discussion to an end.

In 1996, Beijing fired ballistic missiles into waters off Taiwan in an attempt to prevent an election win for pro-independence Lee Teng-hui. But the move backfired spectacularly as then-US president Bill Clinton ordered two aircraft carrier battle groups to the area and Lee won a landslide victory.

This time around, it’s Tsai whom Beijing wants to prevent winning, and according to some observers, the mainland leadership is again interfering but in a much less clumsy way. Analysts say Beijing has influenced the “business associations” organizing the cheap flights.

“Through pro-China groups in Taiwan, Beijing wants to make all 1 million China-based Taiwanese business people return home to vote in the elections,” wrote the Sankei Shimbun, one of Japan’s major newspapers. “Taiwanese businessmen have been told that ‘if you can mobilize more votes for Ma, you will find doing business in China far easier in the future’.”

In an interview with Asia Times Online, Chen In-chin, a professor at Taiwan’s National Central University’s Graduate Institute of Law and Government, gave support to such allegations. He argued that it’s likely such a Chinese approach made the airlines offer discount flights and even shuttle bus services from the airports to the taishang’s Taiwanese hometowns.

“Of course, the airlines reluctantly lose money on this. But they might have little choice as they are keen on continuing expanding their businesses in China,” Chen said. He then described how advertisements for the discount flights in question placed on the Internet by China-based Taiwanese business associations are presented.

“The ads urge the taishang to head back to cast their ballots. It isn’t explicitly said that they should vote for Ma Ying-jeou but instead they rather broadly hint that the cross-strait status-quo must be preserved for the sake of lucrative business ties,” Chen said.

He added that as the elections draw nearer with the outcome still far from certain, Beijing is busy calculating. According to Chen, the Chinese leadership has many means at hand but has to be extremely careful to intervene in a way that’s obvious.

“At present, Beijing is trying to influence opinion by making its voice heard in academic conferences. It is alleged that the discount flights are part of the story, as well as manipulation of the Taiwanese media. But there are also concerns over the possibility of assassination attempts carried out by the local mafia to influence the elections,” Chen said.

He emphasized that by no means would all China-based Taiwanese vote for Ma and his KMT.

“To some Taiwanese, the longer they have been living in China and the deeper their understanding of the economic, cultural and political differences between China and Taiwan, the less they support the idea of eventual unification. And 30% to 40% of Taiwanese entrepreneurs even support actual independence because they believe unification would be detrimental to their own businesses.”

Chen said if Taiwan became a mainland province, significant funds would have to be transferred into Beijing’s coffers, adding that in private consultations with academics from Guangdong province – China’s top GDP earner – they complained bitterly about being China’s money tree.

“Taiwan doesn’t want to become another Guangdong. But nonetheless, about 60% of Taiwanese expats in China will still support the KMT for the pursuit of their personal economic interests, and that’s why the DPP is extremely worried about these discount flights.”