Wednesday, June 30, 2010

China lobbying provokes freeze on US arms sales

The president of the US-Taiwan Business Council yesterday confirmed a report in a US-based defense magazine that the US State Department had frozen US congressional notifications for new arms sales to Taiwan “until at least spring next year.”

Citing sources in Taipei and Washington, Defense News on Monday wrote that the suspension was the direct result of “effective lobbying by Beijing.”

“The Chinese are ramping up the pressure and engaging us in disinformation to complicate our review, particularly in the context of a vulnerable process for arms sales,” a defense analyst in Washington told the magazine.

US-Taiwan Business Council president Rupert Hammond-Chambers told the Taipei Times that so far, three notifications had been frozen, with more expected to “stack up” as the year progresses. He said the freeze has been in force for “at least a month,” but would not confirm the content of the notifications.

This article, published today in the Taipei Times, continues here. I am still awaiting responses from the US State Department and the Department of Defense's Defense Security Cooperation Agency.

Tuesday, June 29, 2010

The deed is done

Jason Miks of Australian magazine The Diplomat contacted me yesterday for comment on the economic cooperation framework agreement (ECFA) Taipei and Beijing are signing today. This was an opportunity for me to condense six months into a few rather conversational paragraphs. For those who haven't been following the developments closely, this should provide a good introduction — at least to the side that does not agree with the manner in which the whole process took place.

The economic cooperation framework agreement (ECFA) that will be signed in Chongqing on Tuesday is controversial for a number of reasons:

Firstly, in good old Chinese Communist Party (CCP) style, most of the negotiations were conducted behind doors and only very recently were the “early harvest” lists — the items from each side that will be receiving preferential tariff treatment — made public. Secondly, two public referendums proposed by opposition parties were turned down by the government on technicalities that would probably be unacceptable anywhere else in the world (at least in democracies). Third, while the trade pact is to be “reviewed” by the Legislative Yuan during an extra legislative session in July or August, the legislature is almost three-quarters controlled by the Chinese Nationalist Party (KMT) — President Ma Ying-jeou’s party, of which he is also chairman. If the previous 12 agreements that the Ma administration has signed with China are any indication, the LY will once again serve more as a rubber stamp than an actual instrument meant to keep the government honest. Fourth, both sides refused to negotiate under a WTO framework, which would have ensured that both entities are treated as equals [the ECFA document is entirely in Chinese and each side will provide the WTO with its own English version, we are told].

There is a misconception out there that the main opposition party, the Democratic Progressive Party (DPP), is “anti-ECFA” and “anti-China.” It isn’t. It is, rather, in favor of taking a more cautious approach and believes the public has the right to have a say over a pact that will undeniably have a substantial impact on the future of this country. Most trade agreements require years of negotiations. Not only was the ECFA negotiated in record time — about six months — but a fixed deadline appears to have been imposed for its signature, which is never a good thing in negotiations. Furthermore, beyond the complexities inherent in a trade pact, it involves one entity (China) that does not recognize the existence of the other (Taiwan), claims sovereignty over it and threatens force to accomplish this, if required. 

Beijing has made no secret that it sees an ECFA as a stepping stone to unification; this could explain its “generosity” on the “early harvest” list and other sweeteners likely to follow. That’s why we’re seeing reports on TV and in the papers that Taipei is getting “almost everything that it wants” from Beijing. There are, therefore, very serious political implications to an ECFA, something that the KMT denies but that the CCP has made no secret of. Short of “selling out” Taiwan, as some have accused Ma of doing, his administration may very well be falling into a trap set by Beijing.

In terms of social impact, it’s too soon to tell, but an ECFA will likely benefit large industries while hurting the smaller and traditional ones. There is also great fear that a flood of cheap Chinese goods will hurt small industries in Taiwan (a phenomenon that has already been observed with ASEAN countries that recently entered into an FTA with China).

We must remember, as well, that an ECFA is transitory rather than an end in itself. More trade liberalization will follow, but the psychological blow has already been struck and a line has been crossed. If the KMT can get away with the manner in which it shoved the EFCA down people’s throat, whatever comes next that does not touch on politics should be a relatively smooth ride. The ECFA and future agreements will create facts on the ground that will be very difficult to undo, even if the DPP were to return into office in 2012. 

Overall, greater economic entanglement with China will give the latter more power to blackmail Taipei and more leverage on the various sectors of its industry. Even if not overt, this is a political outcome to what has been portrayed by Ma as a “purely economic” trade pact. It doesn’t matter that there is no political language in the ECFA documents to be signed on Tuesday.

See also my editorial on the same subject in the Taipei Times today.

Monday, June 28, 2010

No need for Taiwan FTA, Philippine minister says

Recent comments by the Philippines’ trade and industry secretary cast doubt on the feasibility of Taiwan being able to sign free-trade agreements (FTA) with other economies in the region after it signs an economic cooperation framework agreement (ECFA) with China.

A major pillar of President Ma Ying-jeou’s (馬英九) rationale for signing the controversial trade pact has been that the ECFA would pave the way for such agreements.

“Our ‘one China’ policy stands. An FTA with Taiwan is still too early to say and … our commercial matters with Taiwan are being handled adequately through the JEC [Philippines-Taiwan Joint Economic Conference],” Philippine Trade and Industry Secretary Jesli A. Lapus was quoted by the Manila Bulletin as saying on June 22.

Lapus said the JEC was working well and that the next meeting between Taiwanese and Philippine representatives — the 17th — would be held in Taiwan. The JEC was initially scheduled to be held in the first quarter, but was rescheduled to the fourth quarter to accommodate the entry of a new administration in the Philippines.

“Let the new administration call the shots” on the possibility of expanding the JEC to a full-fledged FTA between Taiwan and the Philippines, he said.

This article, published today in the Taipei Times, continues here.

Sunday, June 27, 2010

When the gulag meets capitalism with Chinese characteristics

In the Kafkaesque world of Chinese political repression, two words stand out as epitomizing continuity and adaptation in the Chinese Communist Party’s (CCP) reliance on incarceration to ensure its survival: lao (勞, labor) and gai (改, reform). Drawing from the Maoist philosophy that work for the betterment of the nation will purify one’s thoughts, the laogai, or “reform through labor,” is a system by which “antisocial” elements are removed from society and “reformed.” Not only are convicts and dissidents detained and “reformed,” but as Laogai: The Machinery of Repression in China shows, the state profits handsomely from the unpaid labor that takes places in those camps.

My book review, published today in the Taipei Times, is available here (pdf) and here (html).

Saturday, June 26, 2010

Did Kurt Vonnegut's brother ruin the 626 protest?

What does a Canadian reporter, columnist and deputy news editor do on his one day off in Taipei? The obvious answer, if you lived in Taiwan, would be to say: Go to the Canada d’eh celebration on the beach, especially when this is only the second Saturday you’ve had off in about four years. When it comes to this odd Canadian, however, the answer would be: go to an anti-ECFA rally in downtown Taipei.

I met up with a couple of friends at the Longshan MRT station at about 3pm, whence we snaked our way through the gathering crowd and ended up at the Wanhua rail station, were former president Lee Teng-hui (李登輝) was expected to make a speech sometime after 3:30pm. From our walk starting at the MRT station, where I only saw three police officers, to the train station, I’d estimate there were several thousands protesters (far more already than the 5,000 TVBS said would show up earlier in the day), all gathered to express their anger at, and demand a referendum on, the economic cooperation framework agreement (ECFA) the Taiwanese government is expected to sign with China in Chongqing next week. As always, the composition of protesters was about 85 percent people of a certain age, and 15 percent young adults or teenagers.

This was my fifth or six major demonstration here since I moved to Taiwan, and as expected, people were friendly and welcoming (I was once again thanked, given paraphernalia and asked to have my picture taken with some Taiwanese), and the banners and placards were colorful, well-designed and original. There even was a man who, in my view, was the epitome of the Taiwanese demonstrator, with two LCD panels affixed to his chest and an epilepsy-inducing led-lit hat on his head (my fear is that later on, when mother nature decided to pour down on us, the poor man may have been electrocuted — but hey, it was a worthy cause). Some people were blasting their gas canister horns or by-now World Cup-famous vuvuzelas, and one man had an actual trumpet, while flag-studded vehicles played speeches, songs and recordings. Overall, though, this was by far the quietest protest I’ve attended in Taiwan. There were very few foreigners (less than I’ve seen at previous protests), but I did run into Ralph Jennings from Reuters on his bicycle. It was very hot and I was happy I’d brought my Cambodian kroma, or scarf, which saved me for a heat stroke back in Cambodia when I was building houses there last year.

After Mr. Lee and others were finished making their speeches, we all began our long walk toward the Presidential Office, where another group of protesters — who had launched their  anti one China  march on Zhongxiao E. Road — would meet up with us. The procession was extraordinarily orderly, and during the hour and a half that we walked, we only encountered a handful of police officers, who were making sure people were stopping at the red lights (protesters would actually thank the officers after the light turned green, how rude!). Only once did I see a small group of Criminal Investigation Division (CID) officers — three of them — taking pictures and filming the protest. This was a welcome departure from previous protests, especially those that surrounded visits by Association for Relations Across the Taiwan Strait (ARATS) officials in November 2008 and earlier this year, where the presence of thousands of law-enforcement officers was actually intimidating and severely hurt the image of the city and central governments. My guess is that there were no senior Chinese officials to protect, and little signs that violence was brewing (for some odd reason, AFP reported today that police presence was heavy; it certainly wasn’t where I went). None of the agents provocateurs who were expected to show up and create trouble — as they did in November 2008 — did so, at least not on the route we were on.

Then, at about 6pm, the rain began, and it poured. Given the season we’re in, I had thought that demonstrators were getting a break today, as by 2pm — when it inevitably starts raining — not a drop had fallen, and the weather bureau said chances of showers were fairly small. But rain it did, even if belatedly. Our theory was that the KMT paid Bernard Vonnegut, author Kurt Vonnegut’s brother and co-inventor of cloud seeding (patented in 1975), to bring the rain. But that’s just a theory. Organizers called on demonstrators not to go home, and it looks like most people heeded the call. 

We continued walking for a while, but after taking a short break at the one 7-Eleven we encountered in our entire walk, and seeing that the rain was not abating, we called it quits and went to have dinner instead. Sadly, this means we did not make it to the Presidential Office, where more speeches were expected. But we did our part. 

As to whether the demonstration will have any effect on government policy regarding trade with China, I have strong doubts. The ECFA will be signed, no matter what, and the legislative “review” — in a legislature where the ruling KMT has a three-quarter majority — will be little more that window dressing. Taiwanese have grown cynical of mass demonstrations, which, weather aside, could explain the substantial drop in participation I have noted since I began attending rallies four years ago. At best, today sent a signal, and hopefully some good pictures will be circulated worldwide so that readers abroad can be aware that a substantial percentage of Taiwanese do not support the ECFA, or at least oppose the manner in which it was negotiated in secret and shoved down our throats by the government. As I’ve said before, media (including my employer) played into the KMT’s hands when they referred to the trade pact as a “proposed ECFA.” Proposed implies that under certain conditions, a plan could be altered, or nixed altogether. In this instance, there was no such intention, and the pact was to be signed, no matter what.

(Funny anecdote: At one point during the march, I was approached by a young Taiwanese woman who told me she was from the media and was hoping to interview a foreigner about the protest. I asked her which organization she was from, to which she responded: the Liberty Times. When I told her we shared the same employer, she realized that she could hardly interview me, as the Taipei Times belongs to the Liberty Times Group.)

Thursday, June 24, 2010

Cross-strait ‘radicals’ and ‘hardliners’

From the Merriam-Webster dictionary: Hard-line, adj. Definition: advocating or involving a rigidly uncompromising course of action. Radical, adj. Definition: marked by a considerable departure from the usual or traditional: extreme b: tending or disposed to make extreme changes in existing views, habits, conditions, or institutions c: of, relating to, or constituting a political group associated with views, practices, and policies of extreme change d: advocating extreme measures to retain or restore a political state of affairs.

With this in mind, let us turn to today’s reporting by Agence France-Presse on a vote by Hong Kong lawmakers on democratic reform:

Hong Kong lawmakers on Thursday agreed to enlarge the electoral base for choosing the city’s [sic] leader, while stopping well short of one person, one vote for the Chinese territory’s seven million people … A split in the pro-democracy opposition allowed passage for the first part of a package of political reforms, to expand the Beijing-backed committee that elects the chief executive from 800 members now to 1,200 in 2012.

Now, the interesting bits:

Radical legislator ‘Long Hair’ Leung Kwok-hung accused moderates in the Democratic Party of betrayal, as hardliners vowed to settle for nothing less than universal suffrage in 2012.

Three words stand out, all editorializing: radical, moderates, and hardliners, all terms that aren’t used, further down in the story, to qualify “the former British colony’s communist overseers in Beijing,” or, in a separate story on June 21, Hong Kong “Chief Executive Donald Tsang.”

Not unlike its reporting on Taiwan, where it invariably describes the opposition Democratic Progressive Party and Taiwan Solidarity Union as “anti China” and radical,” AFP is once again portraying anyone who disagrees with Beijing in a bad light. Rather than avoid politically hued characterizations altogether (in a bid for journalistic neutrality) or, conversely, making sure that such characterizations are equally applied when necessary, AFP limits its use of negative connotations to Hong Kong lawmakers seeking democracy and universal suffrage and Taiwanese parties that want Taiwan’s 23 million people to determine their own future without the threat of use force by China.

Surely, if AFP weren’t so openly biased, it would have used the term “hardliner” for Beijing and Tsang, who, as per the Merriam-Webster definition provided above, “advocat[e] … a rigidly uncompromising course of action” — in this case, denying residents of Hong Kong universal suffrage and ensuring that Beijing continues to control the territory, often against the wishes of its people.

The same applies to the term “radical.” How could support for democracy and universal suffrage — accepted notions the world over — possibly be equated with “extreme changes in existing views, habits, conditions, or institutions” or “constituting a political group associated with views, practices, and policies of extreme change” or “advocating extreme measures to retain or restore a political state of affairs”?

Using non-violent means to ensure the rights of Taiwanese and Hong Kongers isn’t radical or hard-line or extremist. So why does AFP continue to use such terms, if not to please Beijing?

Saturday, June 19, 2010

Nuclear power plant a ‘disaster’: contractor

The Kuosheng nuclear power plant in Wanli (萬里), Taipei County, is an “absolute disaster,” according to the head of a diving company charged with conducting underwater maintenance at the plant.

Making assertions that raise concerns about the safety of the plant, Robert Greenspan, president of the Rapid City, South Dakota-based Midco Diving and Marine Services, said during a telephone interview with the Taipei Times on Tuesday last week that Taiwan Power Corp (TPC), the operator of the nuclear power plant, was treating the suppression pool — a critical component in case of an emergency — as a “garbage dump.”

The cleaning contract for the suppression pool was awarded to Taiwanese firm Ming Tai and subcontracted to A&P Solar Enterprises, a California-based company. A&P in turn subcontracted the diving portion of the work to Midco.

Greenspan’s company conducted underwater maintenance at Unit 2 in November 2008 and March last year.

Soon after starting work at the suppression pool — a 6m deep pool surrounding the nuclear reactor that can release large quantities of water to cool the reactor to prevent a meltdown — Greenspan’s team came upon a scene they were not prepared for.

“I’ve worked in half a dozen nuclear plants in the US,” Greenspan said. “I’d never seen anything like this … You could find everything short of a bicycle in there.”

Among the foreign objects found were cable spools, oxygen tanks and masks. As they were doing work, more debris kept falling in, Greenspan said.

This article, published today in the Taipei Times, continues here.

Wednesday, June 09, 2010

CPPCC resignation is not enough

After Democratic Progressive Party (DPP) Legislator Pan Meng-an (潘孟安) told the legislature late last month that five stakeholders at Hong Kong-listed China Strategic Holdings (CSH) were members of the Chinese People’s Political Consultative Conference (CPPCC), China Strategic’s chief executive, Raymond Or (柯清輝), announced that he was resigning his CPPCC membership, saying he was doing so to avoid further delays in a consortium bid for Taiwanese life insurer Nan Shan Life.

The Investment Commission, which has already delayed approval of the bid over various unanswered questions surrounding the structure of the consortium (in which CSH is a leading player) and its funding sources, rightly said that Or’s resignation would have little impact on its decision whether to allow the acquisition to proceed.

A report released in March by Pan’s office showed that three China Strategic shareholders — Chongqing-born Zhang Song-qiao (張松橋), one of the 100 richest people in China; Wu Lianghao and Li Wulin — are also CPPCC members. Further investigation reveals that Hong Kong businesswoman Pollyanna Chu Yuet Wah is a major shareholder in the company. Her profile on the Web site of Golden Resorts, where she is chief executive officer, shows that Chu is a member of the National Committee of the CPPCC, a member of the Guangdong committee of the CPPCC and vice chairman of the Hong Kong CPPCC (Provincial) Member Association Foundation.

Membership in the CPPCC is both an instrument of co-optation by the CCP and a means to “reward” Chinese and members of minority groups — such as Hong Kongers and Tibetans, for example — for toeing the party line. What this means, therefore, is that members have either willingly submitted to the Chinese Communist Party (CCP) line as an external agent or have a proven track record of respecting party ideology prior to being approached for membership.

This op-ed, published today in the Taipei Times, continues here.

Monday, June 07, 2010

Radically one-sided

Describing protests in Taipei on June 3, in which some demonstrators threw chairs at a building where discussions on a proposal for a referendum on an economic cooperation framework agreement (ECFA) trade pact with China — which was turned down later that day — were under way, Agence France-Presse (AFP) once again showed its great ability for one-sidedness. Coming back to the office after two days off, the first thing I saw on my desk was a printout of an AFP filing, put there by editors who knew its contents would spark yet another of my tirades (it did).

After introducing the context (demonstrations, talks on ECFA referendum), the article wrote the following:

The dozens of demonstrators attempted to push their way into the building where the proposal by a radical pro-independence party called Taiwan Solidarity Union [TSU] was being reviewed by a commission authorized by the government [italics added].

While this paragraph is factually true, the characterization of the TSU as “radical” borders on the insane. The problems with this adjective are self-evident. First off, most TSU members are of advanced age (in their 50s and 60s) and probably couldn’t engage in “radical” action even if they wanted to (I have long lamented the absence of young Taiwanese at demonstrations organized by the TSU and the Democratic Progressive Party). Secondly, what does “radical” mean? Without a proper context and further explanation, it could mean anything from very pro independence to employing violent means to achieve political objectives. Regardless, the word has a negative connotation that, for those who don’t know any better, gives the impression that TSU members are “irrational” (they haven’t been called terrorists yet, but the way things are going, this could come).

What’s equally irritating about the unnecessary — and ultimately misleading — insertion of that word is that AFP does not make similar characterizations of deep-blue Chinese Nationalist Party (KMT) members, pro-independence groups, or retired People’s Liberation Army officials who, on visits to Taipei, call the Taiwanese independence movement “doomed” and openly threaten use of force should Taiwan declare independence. Isn’t threatening war “radical,” or at minimum deep-red?

Why is this tag only attributed to the TSU, if not but to discredit it as an organization that can be reasoned with?

Saturday, June 05, 2010

Kwok could control Chinatrust: report

Hong Kong investor Peter Kwok (郭炎) could become the largest shareholder of Chinatrust Financial Holding Co (中信金控) and ownership of Taiwan’s largest credit-card issuer could shift from the Koo family to the Kwok group if an equity offering currently under consideration were allowed to go through, a new report dated May 20 warns.

The report, a copy of which was obtained by the Taipei Times earlier this week, was prepared by the office of Democratic Progressive Party Legislator Pan Meng-an (潘孟安) and raises serious questions about Kwok’s financial capabilities, his political allegiance and the origin of some of the money that would be used to finance his investment.

At present, the shareholder composition at Chinatrust is chairman Jeffrey Koo (辜濂松) at 7.28 percent (Koo family members hold an aggregate of about 20 percent); Morgan Stanley and other foreign companies at 43 percent; Cathay Life Insurance (國泰人壽), Far Glory Life Insurance Co (遠雄人壽), the Bureau of Labor Insurance and Fubon Life Insurance Co (富邦人壽) at between 1.04 percent and 1.42 percent each, the report says.

Following delays in capital collection, the board of directors at Chinatrust decided on May 17 to issue 2.5 billion shares through private placement at NT$16.45 per share, with a total value of NT$41.125 billion (US$1.28 billion), which will be submitted during a shareholders meeting scheduled for June 30.

This is the largest seasoned offering in the nation’s history.

This story, published today in the Taipei Times, continues here.

Wednesday, June 02, 2010

Taiwanese funds financed Liberian dictator

Seven years after an international warrant was issued against former Liberian president Charles Taylor, investigators have yet to find any money in his name, though his hidden wealth is estimated at between US$280 million and US$3 billion, the New York Times (NYT) said.

This wealth, which Taylor denies having access to, is believed to have come from Liberia’s timber and diamond trade, its international merchant shipping registry, tax coffers and the government of Taiwan, the NYT said on Sunday.

From 2000 though 2003, when Taylor's official presidential salary was US$24,000, records show that more than US$24 million was moved into and out of his account at the Liberian Bank for Development and Investment in Monrovia. Investigators say the money came from foreign banks, with Citibank in New York acting as the clearinghouse and processing the transfers, the NYT wrote.

All but US$4 million of that US$24 million came from the government of Taiwan in eight separate payments, as Taipei was engaging in checkbook diplomacy to maintain diplomatic recognition amid fierce competition from Beijing.

Beijing first broke off relations with Liberia in 1989 after Monrovia recognized Taiwan. China re-established ties with Liberia on Aug. 10, 1993, and until October 2003, Liberia was one of the few countries to have official diplomatic ties with both Taipei and Beijing. After Taylor was ousted and forced into exile in late 2003, one of the first acts of the new Liberian government was to cut diplomatic ties with Taipei.

Taylor was indicted by the Special Court for Sierra Leone in The Hague on June 4, 2003, on 11 counts of war crimes, crimes against humanity and other serious violations of international humanitarian law. His trial began on Jan. 6, 2008. In court, Taylor said the funds earmarked for various projects sponsored by Taiwan covered military salaries, Balkan arms deals and “the airlift of wounded bombing victims,” the NYT wrote.

The Ministry of Foreign Affairs said the money was intended for AIDS medicine, a children's center, as well as vocational training and charity contributions.

Michel Lu (呂慶龍), ministry spokesman during former president Chen Shui-bian's (陳水扁) administration and now Taiwan's envoy to France, said in an interview that Taipei “deeply regretted” the “humiliating” turn of events, adding that because of Taiwan's isolation, it had been under great pressure from Taylor, who “threatened to cut off relations,” the NYT reported.

“Frankly speaking, nobody can tell you where it [the money] went,” Lu said.

This article was published today in the Taipei Times.