evil Ma

Taipei Times - archivesWhy is Ma obsessing about this ECFA thing, considering the fact that the majority of the public are opposed to it? The main reason is that Ma advocates eventual unification, and he will further this goal if he manages to get an ECFA signed. He is doing nothing to resist annexation by China. Such a pro-China stance is part and parcel of a “one China” ideology. No surprises here, then.

Beijing can still afford to turn a ‘blind eye

Taipei Times - archives

Beijing can still afford to turn a ‘blind eye’

By Lu I-ming 呂一銘

Thursday, Feb 25, 2010, Page 8

During the Lunar New Year break, Chinese President Hu Jintao (胡錦濤) went to Fujian Province to visit the Taiwanese business community in Zhangzhou. Speaking on the economic cooperation framework agreement (ECFA), Hu said that “as long as it is beneficial to our Taiwan compatriots, we will do our best to make it happen. We say it, and we will do it.”

He also gave an assurance that Chinese agricultural products wouldn’t be exported to Taiwan. These comments, aimed directly at the Taiwanese public, will be welcomed by President Ma Ying-jeou (馬英九) at a time when he is seeing a fall in his popularity rating and general reputation.

If you think about it, Beijing’s bark of late seems to be much worse than its bite. Look at its handling of issues involving the Dalai Lama or exiled Uighur leader Rebiya Kadeer; or its response to US arms sales to Taiwan. Another example came during the Lunar New Year break, when Ma received US representative and member of the Select Committee on Energy Independence and Global Warming, James Sensenbrenner, Jr.

During the meeting, Ma described the signing of the ECFA as an agreement between “two nations,” although this phrase was soon amended to “two sides” on the official Web site of the office of the Republic of China president. Beijing turned a blind eye for a few reasons.

Ma said early on that he had signed up to the idea of “eventual unification,” and the policy of his party, the Chinese Nationalist Party (KMT), was to be open to dialogue with the Chinese Communist Party (CCP), in what have become known as the KMT-CCP forums. Beijing, therefore, is willing to be very forgiving when Ma appears, for all intents and purposes, to be overstepping apparently sacrosanct lines. Beijing brushes off these “transgressions” as nothing but “election-speak” or actions done for appearances’ sake for the audience in Taiwan. How else could they play it, if Ma cannot even be assured of a second term come the 2012 presidential election?

Ma has already put the signing of the ECFA on his to-do list for this year. In making these assurances to Taiwanese businesspeople during the Lunar holidays, Hu was clearly trying to set the correct conditions for Ma, to grease the wheels.

However, despite the fact that Taiwan is a democracy, the government and opposition parties do not actually have any say over what is decided in the ECFA talks. As it stands, agreements made during these talks automatically come into effect around one month after they are signed, a matter of some confusion and frustration for the general public.

There should be some form of legislative oversight to supervise cross-strait issues, or they could be decided by public referendums. So far a total of 12 cross-strait agreements have been signed, and a consensus reached — things are not moving slowly. This makes the case for oversight all the more pertinent. Furthermore, the operating principles of the Legislative Yuan’s Cross-Strait Commission (兩岸事務因應對策小組) can be altered with a single amendment.

The ECFA talks have already become a kind of benchmark for the KMT-CCP forum. Last year there were visits by two CCP committee members, with another round of delegations headed by three more committee members expected this year for a number of economic, trade and cultural exchanges.

One suspects that Beijing already sees Taiwan as a “provincial level” administrative unit. With the signing of the ECFA looming, you would be forgiven for feeling a sense of foreboding about the KMT’s apparent rashness.



Lu I-ming is the former publisher and president of the Taiwan Shin Sheng Daily News.

TRANSLATED BY PAUL COOPER
This story has been viewed 241 times.

doubts about Taiwan’s ability to defend itself

Taipei Times - archivesf anyone had doubts about Taiwan’s ability to defend itself, a report released by the US Defense Intelligence Agency (DIA) recently is sure to turn those into nightmares.

Taipei Times - archives

Taipei Times - archives

http://help.funp.com/lib/exe/fetch.php/funp/tools/tools_postbtn_script.png?cache=cacheWhen China addressed the arms sales issue, it went as far as to reprimand the US, but said nothing of whether Taiwan was in the wrong for its involvement, preferring not to complicate the issue. This is an example of how China has tried to divorce economic considerations from politics in its dealings with Taiwan to speed up the process. This seems to indicate that China will strive to put politics on the back burner for the duration of the talks, and make sure nothing gets in the way. For this reason, it seems likely that an ECFA will be signed in the first half of this year.

Taipei Times - archives

Taipei Times - archives

Taiwan’s economy stuck in limbo

By Shen Chung-hua 沈中華

Wednesday, Feb 10, 2010, Page 8

On Dec. 17, Vice President Vincent Siew’s (蕭萬長) financial advisory team said Taiwan, with its high-technology edge, should set up a high-tech funding center. On Dec. 22, President Ma Ying-jeou (馬英九) gave the plan his stamp of approval. Central bank Governor Perng Fai-nan (彭淮南), however, has declared war on hot money on the grounds that the speculative flow of investment capital from country to country destabilizes exchange rates, which in turn causes problems for exporters.

Perng recommends curbing the inflow of hot money through measures such as levying a transaction tax, and has called for the financial center idea to be put on hold.

The public may think these two aims could be pursued at the same time, but they actually conflict. If Ma declares the establishment of a funding center a government policy, we will have to learn to live with an influx of hot money. A funding center is, after all, a platform for raising funds. Foreigners would be able to issue shares in Taiwan and take the money away with them. Equally, they could invest in Taiwan, bringing money into the country.

Obviously one would hope that the inflow and outflow of capital would follow the proper procedure, but in reality investors around the world act according to both rational and irrational expectations, often generating sudden massive inflows and outflows of capital. This would certainly happen in Taiwan if a financial center was established. If we tried to obstruct the process, this inflow and outflow of money would go to other centers, and Taiwan would be left out.

The world’s three biggest financial centers are New York, London and Hong Kong. The authorities in those places do worry about the circulation of hot money, and they caution people to beware of it. The purpose of these warnings is to remind investors to beware of bubbles; they are not aimed at those who move funds in and out. The authorities intervene in the fund-transfer process. Otherwise, money would not be able to flow in or out. What kind of a financial center would that be?

But how do these established centers handle the effects of the inflow and outflow of hot money on currency exchange rates? Again taking the three biggest financial hubs as examples, the US and the UK have floating exchange rates, while Hong Kong has a linked exchange rate system that pegs the Hong Kong dollar to the US dollar, but its central bank still does not interfere. In other words, while the exchange rates of these financial centers are at opposite ends of the spectrum — completely floating and completely fixed — in both cases there is no intervention by the central bank. There is no room in these centers for a middle way — managed floating exchange rates. Their central banks are concerned about exchange rates, but they do not concern themselves on a daily basis with what exporters want exchange rates to be.

On the other hand there are countries that have declared war on hot money, such as Brazil, Chile and Malaysia. They have taken steps to impose tax on hot money transactions. None of these countries can be considered to be financial hubs, nor do they intend to become funding centers.

When Yale University economist James Tobin proposed levying a tax on hot money, his advice was intended for the ears of developing countries, not for financial hubs like New York, London and Hong Kong.

How to curb hot money and, at the same time, become a financial center is a tough question, and one that nobody is talking about so far. So if you want to be a financial center, then you are not in a position to exclude hot money. If you want to run a casino, then you have to accept that gamblers sometimes take home the winnings.

When the global financial crisis struck, many people asked why Taiwan was so badly hit. One reason is that an export-based economy is too dependent on overseas demand. When overseas demand fell, Taiwan’s exports were harder hit than those of some other countries. This prompted heated discussion about whether we should continue with such an economic strategy. Was it time for a change in Taiwan’s economic structure? Should financial services be developed to be a bigger part of the overall economy?

Many saw the crisis as an opportunity for change. Today, however, it appears that the central bank has decided that it wants to be the central bank of a manufacturing and exporting economy, not the central bank of a financial center. That being the case, the financial center idea cannot go forward.

So the funding center we have in mind would in reality be just a capital market that is a bit better than those of Thailand and Malaysia. We look at exports and see plenty of benefits, but we don’t want to see their downside. In our hearts, we deeply fear the free inflow and outflow of funds that a financial center would entail.

If we cannot rid ourselves of this fear, Taiwan’s economy will never be transformed.



Shen Chung-hua is a professor in the Graduate Institute of Finance at National Taiwan University.

TRANSLATED BY JULIAN CLEGG
This story has been viewed 230 times.

that is right

Taipei Times - archivesThe decision by the administration of US President Barack Obama to approve the sale of an additional package of arms to Taiwan comes just in the nick of time. It does show a realization on the part of the US administration that Taiwan should not be left to fend for itself, but needs both support and encouragement from the US.

自由電子報 - 踩在農民身上的「馬」腳

自由電子報 - 踩在農民身上的「馬」腳去年底農委會透過農糧署執行「柳丁銷往中國一八七○噸」政策，今年一月中還對外發佈新聞，聲稱「自去年十一 月底銷中開始，截至當時已經累積出貨量九一二公噸，也帶動柳丁價格由一公斤十一元回升到一公斤十三元」；話說得相當好聽，但是全國在地的柳丁農們都知道根 本不是這麼一回事。