Friday, February 26, 2010

Something big is coming

Independent sources have informed me that a well-known international wire agency has been sitting on a “big” Taiwan/China story “for weeks” and that it may be on the brink of making it public. The reasons for the delay, I was told, were “a request from China” as well as fears that making it public now would have an impact on this weekend’s by-elections in Taiwan. The news could be released by Sunday, I was told. One source said the story behind the news embargo was possibly as fascinating as the breaking news itself.

While a source told me that in recent months “bits” of news have pointed toward this development, it is, at this point, difficult to conjecture on what this might be. Still, based on what has been made available to me, it is possible to make a few observations:

(a) if the news is being held at the request of Chinese authorities, it means that the “feared consequences” of releasing it prior to the elections would be deleterious to the Chinese Nationalist Party (KMT) candidates. Otherwise, if it cast the KMT in a positive light (at least with pan-green voters), Beijing would have expedited the release and lifted the embargo so that its beneficial impact were felt before people cast their vote;

(b) tell-tale signs over the past months; the possibilities include (in increasing “controversy” order):

- The opening of Straits Exchange Foundation-Association for Relations Across the Taiwan Strait offices on both sides, though this isn’t highly controversial and would only have a marginal impact on the elections;

- A visit by senior provincial Chinese leaders. On Feb. 24, Xinhua news agency reported that the State Council’s Taiwan Affairs Office had announced that an undisclosed number of such officials would soon be dispatched to Taiwan. Again, there is a precedent for this and the controversy level or potential of a negative impact on the election’s outcome is minimal;

- A visit to Taiwan by a senior Chinese Communist Party official, or by a senior KMT official to China. One the Chinese side, Premier Wen Jiabao — who has expressed his desire of visiting Taiwan one day — comes to mind;

And, as our most controversial candidates because President Ma Ying-jeou has said that both would not occur in his first term:

- A summit meeting, possibly in a neutral location, between Chinese President Hu Jintao and Taiwanese President Ma.

- The beginning of negotiations on a cross-strait “peace agreement.”

Other developments that I have discarded because they would potentially have a positive impact on KMT candidates’ chances of getting elected include an announcement by Beijing that it will de-target or dismantle the 1,500 ballistic missiles it aims at Taiwan; allowing Taiwan’s participation at the WHO; and (highly unlikely) a delay in economic cooperation framework agreement (ECFA) negotiations.

Stay tuned. This could be a very interesting weekend.


Robert R. said...

"delay in economic cooperation framework agreement (ECFA) negotiations."

How about a result (i.e. an agreement) in ECFA negotiations?

If it had been agreed upon, but details not released, that'd be a kick in the pants for every Taiwanese.

Anonymous said...

What "international wire agency" would sit on a story because of "a request from China"?

Chris W said...

If it sits on the story because of the request from China, I think the story was written by correspondents in Beijing, not Taiwan. Maybe it's about trade and tax rather than politics.

J. Michael said...

Chris: That's my impression as well, or at least a story that involves reporters from that agency on both sides of the Strait (which is not uncommon). We should find out soon.

Anon: It's not unheard of that some wire agencies have had to cater to Beijing's whims to be allowed to continue operating in the country. Remember, China has a very unorthodox — and flexible — definition of "state secrets."

Robert: H'm, not entirely impossible, but the second round of ECFA talks is scheduled for next month, which points to the agreement still a work in progress. This would also fuel further speculation that ECFA takls are being rushed, when we know that similar FTAs elsewhere took at least a couple of years of negotiating before they could be tabled.

Tim Maddog said...

Michael, "on both sides of the Strait" could be improved by saying "in both countries" so as not to obfuscate the international nature of the relationship.

To Beijing, anything that has the potential to damage their authoritarian grip (e.g., revealing the number of children who died in the Sichuan earthquake because gov't corruption cut costs on construction safety to fill their own pockets) will be called "revealing state secrets" -- state secrets with Chinese characteristics, that is.

Tim Maddog

Anonymous said...

I had a bad feeling. It's not going to be a good news for Taiwan. I hope I am wrong.

Chris W said...

Is this the story you talked about?

AP Enterprise: How nuclear equipment reached Iran
By PETER ENAV and DEBBY WU, Associated Press Writers
TAIPEI, Taiwan – Early last year, a Chinese company placed an order with a Taiwanese agent for 108 nuclear-related pressure gauges. But something happened along the way. Paperwork was backdated. Plans were rerouted, orders reconfigured, shipping redirected.

Anonymous said...

I wonder how exposed Taiwan's banks are to the derivatives. I remember last year Chunghua Telecom got hammered with NT$10B or so loss in FX exchanges.

Perhaps one of the reasons the ECFA is being rushes is because Taiwan wants to reneg on contracts and needs China's backing.

There has to be some key reason for the rush to sign an ECFA. I speculated previously about Taiwan's gold hoard (China many need it to help create a fractionally gold/commodity backed Asian currency unit ~before the rest of the world collapses...)

Also, perhaps BTO bonds coming up for large scale projects need Chinese investment capital, else they go bust.

I know I am just guessing.