- The Washington Times - Monday, February 1, 2010


President Obama’s Chinese New Year’s gift, an arms purchase offer even with a $6.4 billion price tag, couldn’t be more welcome to Taiwanese President Ma Ying-jeou.

Last March his Kuomintang swept back into office with anti-corruption slogans, promising better relations with the Gigantest Panda across the Taiwan Strait. That peaceful transition reconfirmed for 23 million Taiwanese the first representative government in Chinese civilization’s vaunted 5,000-year history. But now the Mandarin-accented, Hong Kong-born, sleek politician’s polls are drooping.

Suffering from the world recession, constituents now want to know what Mr. Ma has done for them lately. Welcome to democracy.

Furthermore, the panda’s appearance is deceptive. They are notoriously uncuddly (you would be too if you only ate bamboo). And Mr. Ma’s aggressive, pragmatic courtship of Beijing hasn’t stopped its missile buildup, now at 1,600.

Furthermore, the Taiwan Relations Act — which pledges the U.S. to arm Taiwan and suggests American military help if and when China attacks — looks anemic. America’s extended engagements elsewhere, President Obama’s attempted seduction of former foes including Beijing, his postponement of the next aircraft carrier, his lack of support during his mainland visit last year, all look ominous. And despite a flip-flop by panda-hugging U.S. Navy commanders — seemingly the result of continued intelligence underestimates of growing Chinese naval strength — the Taiwanese are concerned their ambiguous de facto independence is at risk.

Despite Mr. Ma’s continued expressions of confidence in Mr. Obama, could the Americans get there quickly enough as in past crises?

After dawdling at both ends of the de facto alliance for almost a decade, the package — though it excludes the F-16s and submarines that were at the heart of an original program almost twice that size — is particularly fortuitous just now.

Mr. Ma has just come off his first mainland trade negotiations — the culmination of longtime pressure, particularly from American and Japanese multinationals, for more integration. Without closer mainland ties, they argue, Taiwan would lose out among East Asia’s export-led economies. [Don’t hold your breath for promised swaps of expanded domestic markets for “export-led” strategies.] More than a half-million Taiwanese managing 7,000 mainland firms with $150 billion investment doesn’t hack it, they argue; Taiwan industry is being hollowed out by the island’s No. 1 trading partner.

But there’s little doubt that Mr. Ma’s “Economic Cooperation Framework Agreement” has been oversold. He added the notion that without it, Taiwan would lose out in Southeast Asia after Beijing last year signed a free-trade agreement with the Association of Southeast Asian Nations (ASEAN).

Closer examination, however, shows there is more sound and light than substance. After all these years, the 10 ASEAN countries haven’t got their act together. Now, one by one, to protect local industry, each country has added caveats to the agreement. Vietnam had already seen its Tonkinese economy devastated through smuggled Chinese dumping.

Meanwhile, many small businessmen in Taiwan — where the opposition Democratic Progressive Party is strong — say the deal could swamp them with cheap mainland imports. Mr. Ma already had severely limited the opening to financial investment. Taipei remains cognizant that inflation as much as communist military prowess sank Chiang Kai-shek, and thus has always clutched banking tightly.

Though former President Chen Shui-bian and some family members were convicted on corruption charges, his DPP is making a comeback, capturing three January by-elections. Its southern agricultural heartland — after earlier seduction by Beijing’s special agricultural import deals — is worried. They blew Mr. Ma’s attempt at expanded U.S. trade, maybe eventually a free-trade agreement, when the legislature forced a partial hold on beef imports. Enhanced communications including direct flights has increased mainland tourism — but there are too many rumors of “tourists” disappearing into the woodwork.

It may take a while. But even in the new digital age, Taiwan’s role as “the unsinkable aircraft carrier” is bound to reassert its strategic importance as Beijing’s armaments drive turns hysterical in the face of a nonexistent enemy. Little boys given toys like to play with them. Example: the 2001 Hainan incident, when a hot-shot Chinese fighter pilot crashed into an American spy plane over international waters.

Beijing’s bombast over the Taiwan arms deal is testing Mr. Obama. But canceling the two militaries’ contacts has been vastly overblown, as they were never really reciprocal: during the Hainan crisis, the retired admiral ambassador revealed his Chinese military “friends” wouldn’t return his calls. And after a decent interval, the exchanges would probably be reinitiated as in past temporary cancellations.

But desperately grasping for some ideological footing for a regime that long since abandoned Marx and Engels (and Mao, in all but iconography), Beijing has turned to traditional Chinese xenophobia/nationalism to keep out foreign “ideas.” That plus cyberwarfare practice and sheer Google hypocrisy is the root of that current schemozzle. The “Communists” have even resurrected once-despised Confucianism as a cover for overseas propaganda.

All this despite continued hot pursuit of foreign investment (and technology transfer) to keep the export-led economy booming.

In all this muddle, Taiwan could again become a front-burner issue. Welcome to the real world, President Obama.

International Business Editor Sol Sanders, veteran foreign correspondent and analyst, writes weekly on the convergence of international politics and business-economics.

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