TKACIK: Taiwan struggles in China’s trade grip
Islanders fear trade in services pact with Beijing will swallow their economy
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By contrast, China’s financial institutions are all centrally controlled and have vastly more capital. The agreement affords Chinese banks and institutions up to 20 percent ownership in Taiwan counterparts and thus effective control. It is impossible for any Taiwan institution to take effective control of any Chinese counterpart.
Small retail businesses face a similar potential for being swamped. The investment threshold of $200,000 brings with it a potential of bringing in 21 new immigrants from China — three employees and up to seven family members per worker.
In a broad demographic sense, China can absorb unlimited Taiwan immigration, but Taiwan cannot absorb unlimited Chinese migration. Nor can Taiwan’s retail sector absorb unlimited competition. Unlike other foreign investors in Taiwan, Chinese investors do not have to renounce Chinese citizenship to be naturalized as Taiwanese voters inTaiwan.
Taiwan’s voters see few if any real advantages of the Trade in Services Agreement to Taiwan’s overall economy over what Taiwanese businesses already enjoy in China. There are no new investment guarantees, no new arbitration advantages, no new dispute-settlement mechanisms.
No doubt the agreement fulfills a Taipei government goal of further integrating Taiwan’s economy with China’s and enhancing China’s already massive influence in Taiwan’s economy.
Like Ukrainians’ view of their Russian economic partnership, most Taiwanese see the agreement as a strategic move on the way to Taiwan’s political union with its biggest economic counterpart.
Unlike Ukrainians, Taiwanese have parried the maneuver cleverly. Legislators, including the speaker of Taiwan’s parliament, have acquiesced in a physical takeover of the country’s Legislative Yuan by demonstrators — mostly students and young activists — on the eve of the agreement vote. Anxious parliamentarians worried about voters, but under a strict party whip, now seem content to let the demonstrations delay the vote indefinitely.
Most Taiwanese hope they will get enough moral support from Washington, Tokyo, Canberra, Ottawa and Brussels to persuade the ruling Nationalist Party to rethink the Trade in Services Agreement. It is a move they judge will not draw backlash from Beijing.
The Obama administration’s Ukraine policy has been a horrible failure for Washington and the Western democracies. But it seems that the State Department has learned its lesson. With a little bit of encouragement for Taiwan’s people, the United States may be able to preserve Taiwan as an important trading partner separate from China. Without it, Taiwan will eventually disappear as an independent entity in democratic Asia.
John J. Tkacik is president of China Business Intelligence
Read more: http://p.washingtontimes.com/news/2014/apr/1/tkacik-taiwan-struggles-in-chinas-grip/?page=2#ixzz2xnejVr1k
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