Investors, not politicians, hold the key

PUBLISHED : Monday, 13 March, 2006, 12:00am
UPDATED : Monday, 13 March, 2006, 12:00am

The man in the duty-free shop at Taipei airport looked longingly at my passport. 'When will we have a green passport for the Republic of Taiwan? That is what we want, but the communists will attack us. So, sadly, I do not see it.'

At the annual meeting of the National People's Congress in Beijing last week, the possible independence of Taiwan was a frequent topic, with denunciations and threats of war by government leaders.

Defence Minister Cao Gangchuan said on Tuesday last week that the situation in the Taiwan Strait was grave and complex and that every member of the military was on high alert, preparing to defend every inch of national territory.

For Chang Wen-jun, waiting in the departure lounge for the eight-hour journey that was to take him to Shanghai, the issue was one which should never have come up at all.

'We businessmen are victims of these politicians. Why can't I fly straight to Shanghai, a journey of less than two hours? It is only the Taiwan people who suffer from the lack of direct flights. The political instability from this squabbling deters companies from investing in Taiwan and is very bad for our economy.

'I am persuading my wife to retire early from teaching in Taipei and we will buy a house in Hangzhou and live there. It is the nicest location and best place to run my mainland businesses. I see the future career of my two children in the mainland, too,' he said.

Mr Chang reflected the majority opinion among the million Taiwan businessmen who have settled in the mainland and have to fly there via Hong Kong, Macau, Japan or South Korea and are the potential hostages if there were a conflict.

They want the politicians in Beijing and Taipei to keep silent and devote their energies to improving the infrastructure, facilitate the movement of capital, goods and people and increase their profit margin.

They see both sets of politicians as villains - President Chen Shui-bian (pictured) for provoking the mainland by taking steps toward independence and the communist leaders for threatening war and assembling nearly 800 missiles that could destroy the island's ports, railways, airports, power stations and military bases in a matter of hours.

Both are playing to a domestic audience - Mr Chen to the strong lobby within his Democratic Progressive Party (DPP) that favours independence and the Beijing leaders to the military and the strident nationalism that has replaced communism as the ruling ideology.

A more intelligent course would be for Mr Chen to be discreet and circumspect and for the Beijing leaders to woo the Taiwan electorate like a lover and not a street bully. 'Business people are like animals who need to be able to move round the world to develop,' a leading businessman told Commonwealth, the best-known economic magazine in Taiwan, in its latest issue.

'But politicians are only competing for local votes and are like plants that do not move. The government does not understand the troubles of business and is waiting as investment falls and the economy shrinks. In the mainland, I can make a plan for one, three, five or 10 years, but in Taiwan only for three years.'

Mr Chang and many others regard the political arguments as an enormous waste of energy because Mr Chen will never dare - even in the window of opportunity before the Olympics - declare independence any more than the mainland will attack Taiwan militarily.

Instead, what will occur is a continuation of the process of the past 15 years - the migration of Taiwan business and people to the mainland, the shrinking of the Taipei government's tax base and its increasing economic dependence on the mainland, like Hong Kong.

Taiwanese companies have invested more than US$100 billion in 70,000 projects in the mainland, making them one of the two largest foreign investors, with Hong Kong. The mainland is Taiwan's No1 export market.

This has happened despite the policies and incentives of Mr Chen and his predecessor, Lee Teng-hui, to encourage their companies to invest abroad anywhere but the mainland.

Taiwan is gradually opening its doors to the giant market of mainland tourism and Cai Ying-wen, vice-premier in the new government of Premier Su Tseng-chang appointed in January, expressed flexibility on the issue of direct links.

'They should not be accomplished overnight,' Mr Cai said.

'We start with charter flights and see the response of society. Direct links will not harm the interests of Taiwan and could bring in benefits for us and stimulate domestic demand.'

Even the DPP cannot ignore the pressing reality. As Karl Marx observed, it is economics that determines politics and not the other way round.

So, the rousing statements of the mainland and the Taiwanese military last week are no more than posturing. It is the decisions of thousands of investors like Mr Chang that will write history and decide Taiwan's future.