Purpose Behind Targeting Political Contributions by Taiwanese Business People
By Hung Chi-chang
China Times, November 26, 2021
Mainland China has been rumored to punish "two-sided" Taiwanese business people as early as 2018. Spokeswoman Zhu Fenglian of the Taiwan Affairs Office (TAO) of the State Council stated that the mainland is taking a first hit against Taiwan’s Far Eastern Group recently "based on facts" and implementing “precision strikes." The expected aim was to ask Taiwanese business people at large to distinguish between right and wrong, take a firm stand, and draw a clear line with the separatist forces of Taiwan independence. According to the TAO, there is no room for ambiguity. But can the mainland's measures achieve its goal? Will the accidentally derived political, economic, and social effects worsen the estrangement between the two sides of the Taiwan Strait, and thus are even more detrimental to the peaceful development of cross-strait relations?
First, in light of political effects, mainland China’s official requests in the past for Taiwanese artists or business people to make political statements often caused public opinion within Taiwan to rebound, and even helped the electoral performance of the Democratic Progressive Party (DPP) and its supporters. This time, the mainland's target against political donations from Taiwanese business people has indeed added a bit of "precision."
In general, any society has inevitably a kind of "anti-rich complex." Many people often have the stereotype that "politicians are inclined to corporate interests." Furthermore, through the “Political Contributions Public Review Platform” of the Control Yuan, the general public can find out the facts about political party candidates and their corporate sponsorship. Therefore, pinpointing political donations may draw relatively less opposition in Taiwan, but the effect of "precisely hitting" political opponents may be even stronger.
Since political donations are public information, no one knows who else is on the so-called "Taiwan independence list." It is conceivable that the purpose of mainland China is to urge Taiwanese business people to stop sponsoring candidates from pro-independence parties such as the DPP, thereby reducing the financial capacity and social support of pan-green candidates, and even making them lose the election. However, we can also infer that if politicians in Taiwan can be elected without relying on the sponsorship of Taiwanese business people, doesn't it mean that the influence of Taiwanese business people on Taiwan's politics is not a significant factor, and that Taiwanese business people are just bystanders victimized in a cross fire?
Second, from an economic perspective, Taiwanese business people are the most important umbilical cord for the peace and stability of cross-strait relations. However, after the Chinese mainland has openly penalized the Far Eastern Group, it may create more uncertain effects on Taiwan business people's willingness to develop in the mainland and on the prospects of cross-strait economic and trade exchanges.
In the cross-strait economic and trade exchanges over the past 40 yaers, Taiwanese business people have driven the economic development and innovation of mainland China in different periods. In 2018, Chinese President Xi Jinping said to former Vice President Vincent Siew at the Boao Forum, “The development of the mainland must be attributed to the contribution of our Taiwan compatriots and Taiwanese enterprises.” In 2019, President Xi also reiterated at the 40th anniversary of the publication of "A Letter to Taiwan Compatriots" that "Taiwan compatriots have made major contributions to the reform and opening up of the motherland and the mainland."
According to data from the Financial Supervisory Commission in Taiwan, 73.74 percent (1,199) of the 1,626 domestic listed companies have investment projects in mainland China, with a cumulative investment scale of NT$2,511.8 billion (about US$90 billion). It is precisely because Taiwanese business people have deployed cross-strait supply chains for many years, so they have activated cross-strait intra-industry trade with intermediary goods as the mainstay. According to statistics from the Ministry of Economic Affairs, Taiwan’s exports to the mainland have been rising year after year. It is estimated that Taiwan’s exports to the mainland will exceed US$150 billion for two consecutive years, accounting for 43.8 percent of Taiwan’s total exports.
However, in the context of environment changes in the mainland Chinese market and the strategic competition between the United States and China, the trend of Taiwanese business people migrating from the mainland has emerged. According to statistics from the Ministry of Economic Affairs, although mainland China was Taiwan’s primary and largest foreign investment destination from 2010 to 2020, its proportion has fallen sharply over the past 10 years. Taiwan’s total foreign investment in 2011 was $18.1 billion, of which $14.38 billion was in mainland China, accounting for 79.5 percent; by 2020, Taiwan’s total foreign investment was $17.7 billion, but its investment in mainland China was only $5.906 billion, accounting for 33.3 percent, less than half of 2011. Obviously, it is no longer the first choice for Taiwanese business people to invest and set up factories in mainland China. Today, the mainland's move to pinpoint political donations from Taiwanese business people is more likely to prompt high-tech companies with mobile capabilities to make further determination to downgrade their presence in the mainland market.
In other words, it is still unclear whether the mainland’s move to target political contributions by Taiwan business people can achieve the expected objective, but the mainland is also very likely to damage the niche of industrial development due to the accelerated outflow of Taiwanese business people. Does this serve Beijing's interests or meet the expectations of Washington and Taipei under the strategic competition between the United States and China?
Political contributions and expression of preferences are part of Taiwan’s political culture and political rights. Mainland China’s actions to intimidate Taiwanese business people show that the logic of its Taiwan-related policies is inconsistent, and it even runs counter to Mr. Xi’s policy guideline of "closer bonds of heart and mind." Taiwan’s society and political parties should stay calm. Although the mainland’s measures may have an impact on Taiwan’s freedom of speech and political ecology, this is also a critical moment for reviewing Taiwan’s democratic system.
The author is former chairman of the Straits Exchange Foundation.
From: https://www.chinatimes.com/opinion/20211126003440-262104