By Alex Reton, of THE OBSERVER, EDINBURGH, SCOTLAND
People in developed nations have grown used to low-cost food, but that is about to change as global forces drive huge increases that could threaten international stability.
Outside a Co-op supermarket in Edinburgh this month, I met three sisters, all doing their shopping for this weekend. In their baskets were tins, mainly -- Ambrosia creamed rice and minted peas. They were peering at stickers and examining labels with the look of hardened skeptics.
"Terrible, just terrible," said Betty Pryde, at 82 the eldest of the three. "Look at the price of these eggs."
They were free range, and cost £1.28 (US$2.50) for six -- 60 percent more than in most supermarkets a year ago.
"Everything's gone up," she said.
The sisters live apart but they often shop together, pooling their state pensions. Jean, 78, the youngest, said she doesn't bother looking at the prices, she just gets what she needs. Her older sisters looked at her as if she had just said something naughty.
"Oh no, you've got to watch the prices -- bread, milk, everything, it's all going up," said Nan, 79.
And they all agreed their weekly shopping bill was up a good 10 percent on last year, although the cost of gas and electricity was more of a worry to them.
"It's the price of oil, isn't it? And the bad weather?" said Nan, musing over the reason for the price rises.
"The shops, they all like a profit well over the score," Jean said.
"Aye, well, I must get on," Betty said.
Clearly this was the wrong moment for a long chat.
"I want a bit of fish for my supper, and I imagine that's gone through the roof, too," Betty said.
When they had gone, the store was as empty as a church on a Monday. But the discount grocery store Lidl, a block away, was throbbing. Poundstretcher next door was packed, as was the discount frozen foods store, Farm Foods. And no wonder -- food prices are rising faster than they have at any time since the mid-1970s. The middle class in Britain has barely noticed, but here in one of the poorer corners of Scotland, people are feeling the pain.
Everyone in the stripped-down warehouse of Lidl, where the posters promise, simply enough "40 percent cheaper!" had a story to tell.
Shubnam Rasoul, 23, out shopping with her husband, Shahid, and their two small children, said: "I never buy anything for myself any more. And I never buy anything that's full price -- it's all in the sales."
Shahid, who works in a Leith butcher's shop, said that the price of their lamb is up 10 percent since last month.
"We spend £200 a month now on groceries for the family," he complained. "Probably 25 percent more on a year ago. It's frightening."
While a liter of orange juice is £0.57 in Lidl, it sells for £0.99 in the Co-op. Such products, and staple foods like eggs, bread, frozen peas, butter and cheese have seen price rises of between 20 percent and 30 percent in mainstream supermarkets. Mysupermarket.co.uk, which collates UK supermarket prices daily, puts the overall rise last year at 12 percent. That means the average British family's shopping bill has gone up by £750 a year.
DIFFERENT WORLDS
From Lidl, I went to another food shop, only a kilometer away, but a planet away in every other way. Occupying part of a terrace in the grandeur of Edinburgh's New Town, Herbie's is a fittingly stylish grocer/cafe -- the sort of place where they don't put price labels on the goods in the chill cabinet because, presumably, no one is particularly bothered. If you do ask, half a liter of milk here costs £0.75 -- in Lidl it's £0.32.
I was introduced to five obviously middle-class Edinburgh women, the fundraising committee of the PTA for one of the city's private schools. They were having a meeting over cappuccinos.
Did any of them know how much half a liter of supermarket milk cost, I asked. £0.80 at the upmarket supermarket Waitrose, said one confidently, and the others nodded. And how much has the price gone up? Not much: it's about the same, they all agreed. In fact a half a liter of milk costs £0.40 at the supermarket, and is up by 15 percent to 20 percent on a year ago.
Two of the women -- none wanted to be named -- didn't think food prices had gone up noticeably. But the other three weren't so sure. They'd seen a difference in their weekly shopping bills.
"Tesco [supermarket] deliver," one said. "We're vegetarians and it's usually the same order. And it's usually £180. But it's been £200 lately."
Another laughed: "My husband's certainly noticed we're spending more."
"Do you know," the third said, "I have actually started looking at labels in the supermarket. Prices per kilo, and so on."
Everyone smiles -- how absurd it seems.
It's going to be interesting, said James Walton, chief economist with the UK food retail industry's education body, IDG.
CHANGING HABITS
UK shoppers aged under 50 have so far never experienced food-price inflation. Essentially, throughout most Britons' lifetimes, food has become cheaper. But, in December, the inflation rate (by the government's preferred consumer price index, the CPI) was 2.1 percent, while for all foods it was 5.9 percent. Habits will change, although it's unlikely we're going to see Soviet-style lines at empty shelves.
However, label-watching may become a habit for those Edinburgh women, because -- and all the analysts agree on this, if nothing else -- this is only the beginning.
Walton's organization is funded by the supermarket industry, whose bosses are, in public, largely in denial about the significance of the price rises. But Walton, himself, forecasts two further years of similar increases, at least.
All the indicators, the prices of every food staple, are on the up -- wheat doubled in price at one point last year.
"It's something the industry has expected and is thus, hopefully, a manageable cycle," he said.
"No hunger riots. But we have enjoyed food prosperity for a long time, and we're seeing the end of that," he said.
Others offer an even more bleak assessment. Jacques Diouf, head of the UN's Food and Agriculture Organization, spoke recently of a "very serious crisis" brought about by the rise in food prices and the rise in the oil price. Various global economic bodies are forecasting rises of between 10 percent and 50 percent over the next decade.
There have already been riots about food prices in Mexico, West Bengal, Morocco, Senegal and Yemen, although not in Edinburgh. But the factors behind the price rises in Leith are exactly the same as those in Mexico, or in China -- where, on Jan. 16, the government introduced price controls on dairy products, meat, vegetables and cereals. And while food price inflation hit 18 percent last year in China, there's no good reason why they should not do that here.
In fact, there are a lot of reasons why they should.
INFLATION FACTORS
There have been four chief drivers of food price inflation in the last two years.
The first is the huge rise in oil prices: US$100 a barrel means food that is four-times as expensive to plant, irrigate, harvest and transport as it was six years ago. Some commodities brokers are now betting on oil going to US$200 a barrel within a decade.
The second factor is the climate: drought, hurricanes and floods around the world last year made for terrible harvests -- from Australia to the Caribbean and the UK.
The third is the massive rise in the price of the staple-food commodities: wheat, maize and soya. This has been partly driven by speculation in the markets, partly by the demand for crops to turn into fuel. Ethanol, a diesel-type fuel made from plants, must bear a lot of the blame.
Since US President George W. Bush announced a rush to corn-based ethanol it's done well for US corn farmers -- 20 percent of whose harvest, subsidized by the government, went into fuel tanks rather than flour mills this year.
Bush's taste for corn-based ethanol is based partly on trying to break the US's reliance on Middle East oil suppliers, and partly on a (largely misplaced) faith in its ecological credentials. (Its increasingly voluble critics claim that growing grain and then transforming it into ethanol requires more energy from fossil fuels than ethanol generates.)
And, as a result of the vast tracts of farmland now being given over to corn for ethanol production, the price has risen sharply. Hence the tortilla riots in Mexico, last summer, over the price rise in the corn flour that makes the pancakes.
Some claim that there is now a war between the 850 million chronically hungry of the world and the 800 million motorists -- all fighting for the same food crop.
It's a pretty unbalanced battle: The maize to fill a tank for a 4x4 would feed a family of four for three months.
In October the UN's spokesman on famine, Jean Ziegler, called the biofuel boom "a crime against humanity". And as the Economist magazine recently noted: "The 30 million tonnes of extra corn going to ethanol this year amounts to half the fall in the world's overall grain stocks."
This month, after a mass protest at the price of soya beans in Indonesia (which rose because of the shortage of corn and other crops to supply the biofuel industry), Ashok Gulati, director at the International Food Policy Research Institute said: "It's finally a trade-off between filling stomachs and filling diesel tanks in cars and trucks."
NUTRITION TRANSITION
But the last, and perhaps the most disturbing factor in the food price rise, is the financial boom in India and China. Around the world, and through history, people have eaten more meat as they have become richer. This is called the nutrition transition and it's now happening, very quickly, in the two most populous nations on the planet.
Hundreds of millions more people are now rich enough to eat meat compared with 10 years ago, with meat consumption in China more than doubling over the past 20 years. Meat also consumes food resources in a shockingly inefficient way: It takes 8kg of grain to produce 1kg of beef, and 4kg for pork. But each kilo of grain may need a tonne of water. And fuel oil is needed throughout the process, to fertilize the grain, pump water and to transport it.
Water and oil will both be in short supply this century.
None of this is a surprise to Tim Lang, professor of food policy at London's City University, and an adviser to the British government through the Sustainable Development Commission.
"I've been expecting this for two years," he said. "The food system is entering a period of very significant restructuring, the first since the years after the Second World War. We may look back at the second half of the last century as an era of cheap food. It'll be like the Hundred Years' War, as we were taught it in school: A seminal moment in human history that's gone and will not return."
That food is -- for the rich world, at least -- astonishingly cheap, is undeniable. The average British household spends 13 percent of its income on food -- for our grandparents that figure would have been 30 percent.
IN A PICKLE
In Lidl in Edinburgh, I met a 75-year-old retired nurse with a basket of vegetables -- broccoli, leeks, courgettes -- along with apples, vinegar and a tin of condensed milk.
"I make jam and I pickle things," she explained. "My daughter thinks I'm mad, but it's a habit. I got married in 1948 just after the war, when things were still rationed. We appreciated everything we got to eat. Now, we've got used to having too much. We throw so much away. People eat unwisely -- they don't plan, they just shop."
But could there be positive aspects to the food price rises? Some environmentalists believe so, including Tim Smit, founder of the Eden Project, near St Austell in Cornwall, England.
"Food is ridiculously cheap and we need to pay more -- for our environment to be healthy, to cut down on carbon emissions and give more income to our farmers," he said.
"It's said that 30 percent of all food produced in Britain is thrown away. We may be getting back to seeing what the real price of food is, and that is healthy for producers and for society," he said.
So is there a morally preferable price level for food, at which people will value it more, and waste less? Raj Patel, a political economist at Cornell University in the US, and author of Stuffed and Starved -- on the politics of global food supply -- said that allowing the market to set prices to make people behave better is not the answer.
"There are greens who are crowing that the price of food going up is going to benefit the environment and help the small producer," he said. "But the benefit of the rises is going to the contractors and the commodity brokers -- not to the farmers or to developing world economies."
"Nor are supermarkets innocent victims of price rises. [Two in the UK] Sainsbury's and Tesco have recorded double-digit growth in profits last year," he said.
BUSINESS AS USUSAL
The supermarkets insist there's no problem. Tesco's finance director, Andrew Higginson, said that tales of rampant inflation, based on one or two products, are complete nonsense. When I asked Sainsbury's about the reported 26 percent rise in the cost of a basket of its food, it said that its prices overall had actually only risen by 1 percent in the last year.
As an illustration they sent me a list of five items that had become cheaper, including 200g of Sainsbury's mixed olive hummus which was 20 percent down.
Dismissing alarmist predictions, British Retail Consortium's head, Kevin Hawkins, said last week that intense competition between food retailers was continuing to keep prices down, with retailers absorbing much of the impact of increasing costs themselves.
But as the situation stands today, at least a third of the world -- including the populations of China, Russia and India -- have government-imposed price limits on their foods.
"That's how it's going," Lang said. "You can't wriggle out of the facts. There are water shortages, climate change, energy price rises, population demographics, waste. We can't go on eating meat the way we do -- the economics of it just won't add up."
He's not expecting food riots in Britain -- yet.
"But we're entering a long period of restructuring, and politicians will have to get involved," he said. "For years, successive governments have got used to food prices going down. The `leave it to Tesco' policy has dominated. But that's over. After half a century, food security is on the political agenda again."
And so, you imagine, is hunger.
2008年1月27日星期日
2008年1月22日星期二
China-Taiwan Showdown Involves Politics, PCs
By Glenn Smith
A politically savvy jingle in China goes: Visit Beijing, and you discover you're nobody. Visit Shanghai, and you learn you're poor. Visit Taiwan, and you relive the Cultural Revolution.
Translated, it doesn't rhyme, nor is it fully up to date. A week ago Saturday, Taiwan's "cultural revolution" – an allusion to the real Cultural Revolution that derailed China in the 1960s – was dealt a severe blow.
President Chen Shui-bian resigned as Chairman of the Democratic Progressive Party (DPP) after his party suffered a humiliating defeat in a legislative election. The opposition KMT, or Nationalist Party, won by a landslide, taking 81 seats, compared to the DPP's 27, out of the body's total of 113 seats.
"This is the worst defeat since the founding of the DPP," Chen said, after the vote was counted. Analysts say the KMT's victory shows that Taiwan's citizens want an end to bitter partisan fighting that marked Mr. Chen's two terms in office, and they are alarmed by his plan to hold a referendum on a bid for the island to enter the United Nations under the name Taiwan rather than the usual Republic of China. The Bush Administration called Chen's referendum "provocative," and China sees it as nothing short of sedition. More uncertainty looms ahead, as Taiwan will elect a new president on March 22.
So why should you care?
Here's why. Because if things fall apart and a Tom Clancy scenario unfolds in the Taiwan Strait you can forget about upgrading your PC or laptop for a while. The hundred miles of shallow seas separating Taiwan and China happen to be the most important yet most precarious link in the global ICT supply chain.
So much is at stake for information technology companies – not to mention the global economy – that one of the founders of the island's semiconductor industry, Robert Tsao, former head of United Microelectronics Corporation, the second largest IC foundry in the world, began placing full-page advertisements in major newspapers asking the DPP to abandon political behavior that could be viewed as antagonistic toward China.
This is a rare move for one of Taiwan's normally apolitical technological and industrial elite. "If you look back, you'll see that business leaders avoided being linked to either party, and tried to cooperate with government policy," said Andrew N. C. Yang, Secretary General of the Chinese Council of Advanced Policy Studies (CAPS) and faculty at National Sun Yat-sen University, Taiwan.
"Now they are being proactive and speaking out," Yang added. "They see the negative U.S. reaction [to President Chen's actions] on one hand, while they see no advantages on the other. Much is at stake, and they want to preserve the status quo in Taiwan and China relations to avoid a possible disaster."
An uneasy relationship
For decades, diplomatic relations between Taiwan and China have been a geopolitical version of the ultimate "COPS" rerun. There is a sloppy domestic dispute that flares every few years, often before a Taiwan election and always whenever the word "independence" is uttered by a politician. The world watches, like officers in uniform, bored yet vigilant about possible weapons in the house.
Taiwan's next presidential election is on March 22, and President Chen has attached a public referendum on UN entry to the ballot.
"China sees the Chen referendum as another identifiable, incremental step towards independence," said Rupert Hammond-Chambers, president of the Washington-based U.S.-Taiwan Business Council. "To the Chinese it is another illustration of the thin edge of the wedge – [with Taiwan] continuing to make not one big step and formally declare independence but instead continuing to take smaller steps that chip away at the legacy fabric."
To Beijing, this is tantamount to sedition. In fact, on March 14, 2005, sensing that pro-independence President Chen might embark on such an adventure while China is straddled with the onerous task of playing nice during the build up to the 2008 Summer Olympics, Beijing passed an Anti-Secession Law.
This spy-versus-spy battle of wits has been going on since 1949 when Chiang Kai-shek fled China with his troops and established a provisional government in Taiwan. China, oddly enough, believes the island is its territory as promised by Roosevelt, Churchill and Stalin – and Generalissmo Chiang for the Republic of China [ROC] -- in the 1943 Cairo Declaration.
Yet if ever there is a last chance that the Taiwan-China dysfunctional duet could miss a beat, then this is it.
Even a minor slip could send the NASDAQ plummeting. "What you have is not just a China-Taiwan bilateral trade relationship that surpassed $100 billion last year," said Hammond-Chambers. "China's export machine is driven by the complex intertwined relationships with Taiwan's suppliers on Taiwan and Taiwan manufacturers based in China clustered around major Taiwan ODM/OEMs who are exporting from China to the global market -- the U.S., Europe and increasingly the Middle East."
Hundreds of billions of dollars in world trade depend on this Taiwan-China relationship.
Somehow the genius of globalization -- Adam Smith's "Invisible Hand" – has located the workshops of the digital age on opposite sides of the Taiwan Strait. But, there is a twenty year technology gap between them. In effect, tiny Taiwan is the ODM/OEM brains and gargantuan China is the dumb, assembly brawn. Neither can exist without the other.
Made in China, designed in Taiwan
Consider these trade statistics:
China already surpasses the U.S. as the world's leading exporter of ICT (information and communication technology) products. In 2004, China's export totaled $180 billion versus $149 billion for the U.S, $139 billion for the EU and $124 billion for Japan, according to the Organization for Economic Co-operation and Development (OECD).
Yet the Made-in-China label is misleading because most of these electronics goods were designed by a Taiwan company, then assembled by the Taiwan company's factory in China before being shipped abroad. Taiwan manufacturers virtually own many ICT product categories, and their global market penetrations are startling if not unfathomable.
Taiwan is the world's number one volume supplier of motherboards, WLAN NIC cards, VoIP routers, laptops, DSL customer premises equipment, cable modems, IP phones, PDAs, VoIP terminals, LCD monitors, switches, WLAN access points, color tube monitors and large LCD panels.
For all of these products, Taiwan commands more than half of the global market share's dollar value, according to data from Taiwan's Institute for Information Industry (III), part of its national Market Intelligence Center (MIC).
Take, for example, motherboards. In 2006, Taiwan commanded a 99.0 percent world share, and one company, Hon Hai Precision, made most of them. That same year 86.2 percent of the world's notebooks were built by Taiwan companies, one of which, Quanta Computer, sometimes commands as much as three quarters of production.
But Hon Hai Precision, Quanta and other Taiwan ICT companies manufacture their products in China.
Of Taiwan's total ICT output of $89.6 billion in 2006, only 4 percent was made in factories on the island. Instead the bulk – 85 percent – was made in China.
For Taiwan, ICT assembly is just so '80s. The Taiwan government readily grants approval to Taiwan companies seeking to manufacture in China, the only exceptions being TFT-LCD lenses and semiconductors.
Two of Taiwan's science-based industrial parks – one in northern Hsinchu and the other in southern Tainan – are strategically clustered zones for semiconductor production. Here one finds the world's two largest IC foundries, the number one ranked, Taiwan Semiconductor Manufacturing Company (TSMC) and the aforementioned, number two, UMC. Next come more than a hundred fabless chipmakers – design houses that rely on dedicated foundries to make their chips. Then, further downstream, there are packagers and testers.
This industrial model – called vertical disintegration -- was created in Taiwan in the 1980s to maximize flexibility between product generations and demand cycles. Still, Taiwan has more fabs, and even IDMs – vertically integrated chip makers that do everything in-house, from design, fabrication, packaging and testing. All told, there are eleven 12-inch wafer and 21 8-inch wafer fabs on the island. On Taiwan sits 19 percent of the world's IC production capacity, and in 2006, $42.9 billion worth of ICs were produced here.
For a decade, China has been playing catch up, and foreign firms have poured in money and expertise to assure themselves a piece of the action.
Until recently, Taiwan's government has prohibited its own semiconductor makers from joining the fray.
Robert Tsao, of UMC, somehow ran afoul of this policy. Or maybe he was just at the wrong place at the wrong time, a victim of an overwrought political climate.
How politics shape PCs
Taiwan wasn't always this way.
In the early 1980s, a motorcycle ride down any alley in any city would reveal claques of housewives, snapping electronic components together by hand and tossing them into plastic buckets. These semi-finished parts found their way to small factories that dotted the countryside, where PC clones with XT and AT motherboards were made. Everything ended up loaded into ships at Keelung or Kaohsiung.
Taiwan's era of local assembly was short-lived, and soon companies like Acer, then known as Multitech, were building factories in Malaysia, Thailand and Vietnam. By offshoring to Southeast Asia, Taiwan's industry thrived into the mid-1990s as its cost of labor rose.
Investing in factories in China would remain forbidden for ICT companies, but quasi-legal for makers of umbrellas, bicycle parts and low-tech goods, as long as the investment was under a corporate entity in a third country, then typically Hong Kong.
In 1988, Taiwan elected its first native born president, Lee Teng-hui, appointed by Chiang Ching-kuo, who inherited the presidency from his father Chiang Kai-shek.
In a sense, this forever ended the deceased Generalissmo Chiang's dream of reclaiming the mainland that he had lost, but instead of pleasing China it stirred deeper fears of Taiwan drifting towards political independence.
Things remained quiet, with China watching President Lee's every move, as he pursued diplomatic initiatives to expand the handful of countries – totaling 23 today – that still recognized the ROC government after it lost its UN seat in October 1971.
But, in the summer of 1995, President Lee's alma mater Cornell University invited him to speak, and when U.S. officials granted him a visa, China saw it as a serious breach in the triangular Taiwan-China-U.S. protocol.
Beijing went ballistic. Taiwan and the U.S. were issued warnings in words and missiles. Within days, Beijing announced a series of missile tests to be held July 21 and 26, north of Taiwan's Pengchiayu Island. The PLA mobilized forces in neighboring Fujian Province and stationed Jian-8 aircraft uncomfortably near its coast. Later, in August, China announced provocative joint sea-air military exercises. China's saber rattling continued for eight months, until mid-March 1996 when yet another round of missiles tests was conducted near shipping lanes off Taiwan's two main ports – Keelung and Kaohsiung – which control 70 percent of the island's shipping volume.
This last move was seen as a threat to voters in Taiwan's first presidential election on March 23, 1996. Undeterred, voters chose Lee as the first elected president on Chinese soil, giving him a term of another four years.
Throughout the hostilities, the U.S., in accordance with the 1979 Taiwan Relations Act, demonstrated its commitment to defend Taiwan against Chinese aggression.
The USS Nimitz was dispatched from across the Pacific to patrol the Taiwan Strait in the weeks before the March 1996 election. Nearby, the U.S. Seventh Fleet had six ships monitoring the live fire exercises at that time.
Finally, tensions faded.
For Taiwan, it was a test of resolve. Its stock market crashed, its currency plummeted, but the Third Taiwan Strait Crisis, as the events of 1995/1996 are known, had little impact on the technology industry.
Taiwan was still dotted with electronics factories, and more than two-thirds of Taiwan's output was made on the island, with the rest manufactured in Southeast Asia.
But this home-spun scenario changed with China, as illogical as it might seem, becoming the offshore destination for Taiwan factories.
China assumes Taiwan's role
By 2000, only half of Taiwan's ICT products were made locally, and this has since declined to a mere 4 percent. Meanwhile, Southeast Asia, which had accounted for 31 percent of Taiwan production in 2000, has seen its share slip to 10 percent.
Hands down, in terms of production share, the new leader is China, which has grown from an insignificant manufacturing partner to a major stakeholder with a 85 percent share during the decade since the Third Taiwan Strait Crisis.
Visit Taiwan's industrial parks today, and one doesn't see low-slung concrete buildings surrounded by parking lots crammed with thousands of 100cc motorcycles. Instead one spies glass-and-steel offices with a handful of BMWs and Mercedes near the front door and SUVs and mid-priced sedans in the employee lots.
Taiwan's industrial parks are centers for administration, R&D and engineering. The labor-intensive tasks have been delegated to workers in China.
This result is counter-intuitive. How did this come about?
"In 1995 and 1996," says CAPS' Yang, "there was a brief period of uncertainty, but the U.S. intervened and therefore confidence was restored." Was the Taiwan government's ban on China investment lifted? "No," he added. "There has been no change, and China investment still goes through third countries such as the Cayman Islands."
Yang's explanation is that Taiwan's ICT customers – the world's leading high-technology companies – were being wooed by China with investment incentives and promises of market access. Taiwan's businesses are "interdependent and integrated" into the operations of these customers, and as they moved into China, Taiwan's ICT makers had no choice but to follow.
Taiwan and China share a common language, history and culture, and given their proximity, its hardly surprising that their economies are deeply linked Yet this was accomplished without the governments of either side formally acknowledging the other side's existence, let alone their partner's overwhelming importance.
"The situation is unique," says Yang. "Between Taiwan and China, the politics are always confrontational, but there are extremely high levels of economic integration from which they each side benefits. Their economies of both will suffer if there is a disruption, and this is a source of great pressure for their leaders."
LCD panels represent core Taiwan strength
In the migration of Taiwan's technology manufacturing to China, the last men standing are TFT-LDC lenses and semiconductors.
Taiwan's leading panel suppliers -- AU Optronics, Chi Mei Optoelectronics, Chunghwa Picture Tubes and HannStar Display – build their lenses in local fabs and for the most part assemble them in China. TSMC, UMC and other chip makers have fabs up and down the island, but 52 percent of their output goes to China, and increasingly it is packaged and tested there by Taiwan or Chinese companies.
Tze-Chen Tu, general director of the Industrial Economics & Knowledge Center (IEK), at Taiwan's Industrial Technology Research Institute (ITRI), said that every country wants to keep its first-tier industries at home, and that technology transfers are banned if thought harmful to economic or national security.
"We don't like to see them go but even when Taiwan companies shift manufacturing to China, they come back for design and for critical components," said Tu.
Taiwan companies still need prior approval before investing (via a third country) in manufacturing facilities in China.
The general rule for all Taiwan companies is that the investment cannot exceed 40 percent of the enterprise's total valuation.
"Actually, we would like to swap out our 8-inch wafer plants by transferring the technology to China, and by then rebuilding them as 12-inch wafer fabs here," Tu said. "Environmental regulations [for new plants] are getting tougher and tougher in Taiwan, but by changing out existing fabs we would quickly receive approval by our EPA."
China would welcome such a deal, and it is already the world's largest purchaser of used semiconductor equipment, Tu added.
Yet Taiwan did loosen its rules a notch in April 2006. By December, Taipei approved a two-year old request by TSMC to build a 8-inch wafer fab in Shanghai.
New guidelines allow Taiwan semiconductors to operate an 8-inch wafer fab [.18 micron] in China, but only if the company continues to operate a state-of-the-art, 12-inch wafer fab on the island.
USTBC's Hammond-Chambers adds, "What the government regulation in Taiwan states is that when a license is given – and TSMC is the only one that has been granted one – they have to construct, complete and ramp up to full production a 12 inch facility in Taiwan before they can start shipping 8-inch equipment over to the mainland. In addition, they cannot buy new equipment for the mainland facility, they must move the equipment over from Taiwan."
A push for peace
That, no doubt, was cold comfort to UMC's Tsao, who just months before had been indicted on charges of flaunting these rules. He Jian Technology was founded in 2002 by former UMC employees, and Tsao allegedly provided "management assistance" for a 15 percent stake.
Facing a possible two-year jail term, Tsao resigned as chairman at UMC, but nearly two years later, on October 26, in Hsinchu District Court, he was acquitted of all charges.
Tsao began blogging shortly thereafter. Topping his home page is a banner beseeching the KMT's Ma Ying-jeou and DPP's Frank Hsieh – front-running candidates in the upcoming March 22 election – "to work together to draft a Cross-Strait Peaceful Coexistence Law, to resolve tensions between Taiwan and China, and to ease domestic political strife on Taiwan." Tsao's photo graces the page, and he signs as "an ordinary citizen concerned with national affairs".
Included are four essays that Tsao has penned, and a key message is his recommendation that President Chen scrap plans for a referendum on Taiwan's entry into the U.N. When not blogging, Tsao indulges a more expensive hobby – placing front page political ads in Taiwan's major newspapers.
Tsao's new career as political blogger has outraged President Chen, who has called the techno-statesman everything short of traitor. But momentum seems to be gathering behind Tsao's cross-strait business stance.
KMT presidential candidate Ma – in a complete reversal from the KMT's standoffish policy of past decades – has called for broad liberalization of Taiwan's business relations with China, and even for the inauguration of direct chartered flights between the two territories.
The DPP's candidate Hsieh is equally pro-business, promising immunity to Taiwan companies guilty of illegal investment in China. He suggests that investment restrictions be softened so that Taiwan technology companies are at parity with their counterparts from the U.S., Europe and other Asian countries.
Even so, current events bear eerie parallels with the events that sparked the Third Taiwan Strait Crisis.
Between now and March 22, Taiwan politics will push forward behind their own coded shields. There will be the issue of U.N. membership [independence], there will be a presidential election [democracy] and President Chen will push U.S. authorities for a landing visa [diplomatic recognition] for an upcoming flight to Guatemala.
Is the CIA retasking its satellites to observe PLA troop movements in Fujian? Is the U.S. naval fleet redeploying to nearby waters? Probably not.
"There won't be any brinksmanship in coming months," said CAPS' Yang. "Five or six years ago, there was a restructuring of the fleet in the North Pacific to enhance naval and military presence in the region and that sends a clear enough signal to Beijing.
"The stakes are getting higher," said Yang, referring to the hundred of billions of dollars in trade across the Taiwan Strait. "Both sides have clear and abundant knowledge of how to avoid a conflict and of how to further their political and economic interests."
USTBC's Hammond-Chambers said that the "massive economic integration" between Taiwan and China is reason enough to believe they won't go to war.
"That is a compelling case," he said. "It is certainly the public position of the US Taiwan Business Council to encourage further economic integration as a threat reducer."
"There is a guy who works for SEMI, the semiconductor association, who wrote a book called The Silicon Shield… he took the position that the United States would always come to Taiwan's side in the event of a conflict given the importance of Taiwan's chip manufacturing to the U.S. economy."
But, asked how China would react if Taiwan pushes its luck with the U.N. referendum, Hammond-Chambers demurred. "I don't think it will even get that far. In that instance, given the Chinese rhetoric over the past few decades, there would certainly be conflict. There would be some sort of military exchange. The Chinese, for myriad reasons, cannot allow Taiwan, at least at this juncture any way, to drift towards independence… The Chinese Communist Party, looking for ways to demonstrate to its people that it is the legitimate power, cannot allow Taiwan to drift. It cannot."
A politically savvy jingle in China goes: Visit Beijing, and you discover you're nobody. Visit Shanghai, and you learn you're poor. Visit Taiwan, and you relive the Cultural Revolution.
Translated, it doesn't rhyme, nor is it fully up to date. A week ago Saturday, Taiwan's "cultural revolution" – an allusion to the real Cultural Revolution that derailed China in the 1960s – was dealt a severe blow.
President Chen Shui-bian resigned as Chairman of the Democratic Progressive Party (DPP) after his party suffered a humiliating defeat in a legislative election. The opposition KMT, or Nationalist Party, won by a landslide, taking 81 seats, compared to the DPP's 27, out of the body's total of 113 seats.
"This is the worst defeat since the founding of the DPP," Chen said, after the vote was counted. Analysts say the KMT's victory shows that Taiwan's citizens want an end to bitter partisan fighting that marked Mr. Chen's two terms in office, and they are alarmed by his plan to hold a referendum on a bid for the island to enter the United Nations under the name Taiwan rather than the usual Republic of China. The Bush Administration called Chen's referendum "provocative," and China sees it as nothing short of sedition. More uncertainty looms ahead, as Taiwan will elect a new president on March 22.
So why should you care?
Here's why. Because if things fall apart and a Tom Clancy scenario unfolds in the Taiwan Strait you can forget about upgrading your PC or laptop for a while. The hundred miles of shallow seas separating Taiwan and China happen to be the most important yet most precarious link in the global ICT supply chain.
So much is at stake for information technology companies – not to mention the global economy – that one of the founders of the island's semiconductor industry, Robert Tsao, former head of United Microelectronics Corporation, the second largest IC foundry in the world, began placing full-page advertisements in major newspapers asking the DPP to abandon political behavior that could be viewed as antagonistic toward China.
This is a rare move for one of Taiwan's normally apolitical technological and industrial elite. "If you look back, you'll see that business leaders avoided being linked to either party, and tried to cooperate with government policy," said Andrew N. C. Yang, Secretary General of the Chinese Council of Advanced Policy Studies (CAPS) and faculty at National Sun Yat-sen University, Taiwan.
"Now they are being proactive and speaking out," Yang added. "They see the negative U.S. reaction [to President Chen's actions] on one hand, while they see no advantages on the other. Much is at stake, and they want to preserve the status quo in Taiwan and China relations to avoid a possible disaster."
An uneasy relationship
For decades, diplomatic relations between Taiwan and China have been a geopolitical version of the ultimate "COPS" rerun. There is a sloppy domestic dispute that flares every few years, often before a Taiwan election and always whenever the word "independence" is uttered by a politician. The world watches, like officers in uniform, bored yet vigilant about possible weapons in the house.
Taiwan's next presidential election is on March 22, and President Chen has attached a public referendum on UN entry to the ballot.
"China sees the Chen referendum as another identifiable, incremental step towards independence," said Rupert Hammond-Chambers, president of the Washington-based U.S.-Taiwan Business Council. "To the Chinese it is another illustration of the thin edge of the wedge – [with Taiwan] continuing to make not one big step and formally declare independence but instead continuing to take smaller steps that chip away at the legacy fabric."
To Beijing, this is tantamount to sedition. In fact, on March 14, 2005, sensing that pro-independence President Chen might embark on such an adventure while China is straddled with the onerous task of playing nice during the build up to the 2008 Summer Olympics, Beijing passed an Anti-Secession Law.
This spy-versus-spy battle of wits has been going on since 1949 when Chiang Kai-shek fled China with his troops and established a provisional government in Taiwan. China, oddly enough, believes the island is its territory as promised by Roosevelt, Churchill and Stalin – and Generalissmo Chiang for the Republic of China [ROC] -- in the 1943 Cairo Declaration.
Yet if ever there is a last chance that the Taiwan-China dysfunctional duet could miss a beat, then this is it.
Even a minor slip could send the NASDAQ plummeting. "What you have is not just a China-Taiwan bilateral trade relationship that surpassed $100 billion last year," said Hammond-Chambers. "China's export machine is driven by the complex intertwined relationships with Taiwan's suppliers on Taiwan and Taiwan manufacturers based in China clustered around major Taiwan ODM/OEMs who are exporting from China to the global market -- the U.S., Europe and increasingly the Middle East."
Hundreds of billions of dollars in world trade depend on this Taiwan-China relationship.
Somehow the genius of globalization -- Adam Smith's "Invisible Hand" – has located the workshops of the digital age on opposite sides of the Taiwan Strait. But, there is a twenty year technology gap between them. In effect, tiny Taiwan is the ODM/OEM brains and gargantuan China is the dumb, assembly brawn. Neither can exist without the other.
Made in China, designed in Taiwan
Consider these trade statistics:
China already surpasses the U.S. as the world's leading exporter of ICT (information and communication technology) products. In 2004, China's export totaled $180 billion versus $149 billion for the U.S, $139 billion for the EU and $124 billion for Japan, according to the Organization for Economic Co-operation and Development (OECD).
Yet the Made-in-China label is misleading because most of these electronics goods were designed by a Taiwan company, then assembled by the Taiwan company's factory in China before being shipped abroad. Taiwan manufacturers virtually own many ICT product categories, and their global market penetrations are startling if not unfathomable.
Taiwan is the world's number one volume supplier of motherboards, WLAN NIC cards, VoIP routers, laptops, DSL customer premises equipment, cable modems, IP phones, PDAs, VoIP terminals, LCD monitors, switches, WLAN access points, color tube monitors and large LCD panels.
For all of these products, Taiwan commands more than half of the global market share's dollar value, according to data from Taiwan's Institute for Information Industry (III), part of its national Market Intelligence Center (MIC).
Take, for example, motherboards. In 2006, Taiwan commanded a 99.0 percent world share, and one company, Hon Hai Precision, made most of them. That same year 86.2 percent of the world's notebooks were built by Taiwan companies, one of which, Quanta Computer, sometimes commands as much as three quarters of production.
But Hon Hai Precision, Quanta and other Taiwan ICT companies manufacture their products in China.
Of Taiwan's total ICT output of $89.6 billion in 2006, only 4 percent was made in factories on the island. Instead the bulk – 85 percent – was made in China.
For Taiwan, ICT assembly is just so '80s. The Taiwan government readily grants approval to Taiwan companies seeking to manufacture in China, the only exceptions being TFT-LCD lenses and semiconductors.
Two of Taiwan's science-based industrial parks – one in northern Hsinchu and the other in southern Tainan – are strategically clustered zones for semiconductor production. Here one finds the world's two largest IC foundries, the number one ranked, Taiwan Semiconductor Manufacturing Company (TSMC) and the aforementioned, number two, UMC. Next come more than a hundred fabless chipmakers – design houses that rely on dedicated foundries to make their chips. Then, further downstream, there are packagers and testers.
This industrial model – called vertical disintegration -- was created in Taiwan in the 1980s to maximize flexibility between product generations and demand cycles. Still, Taiwan has more fabs, and even IDMs – vertically integrated chip makers that do everything in-house, from design, fabrication, packaging and testing. All told, there are eleven 12-inch wafer and 21 8-inch wafer fabs on the island. On Taiwan sits 19 percent of the world's IC production capacity, and in 2006, $42.9 billion worth of ICs were produced here.
For a decade, China has been playing catch up, and foreign firms have poured in money and expertise to assure themselves a piece of the action.
Until recently, Taiwan's government has prohibited its own semiconductor makers from joining the fray.
Robert Tsao, of UMC, somehow ran afoul of this policy. Or maybe he was just at the wrong place at the wrong time, a victim of an overwrought political climate.
How politics shape PCs
Taiwan wasn't always this way.
In the early 1980s, a motorcycle ride down any alley in any city would reveal claques of housewives, snapping electronic components together by hand and tossing them into plastic buckets. These semi-finished parts found their way to small factories that dotted the countryside, where PC clones with XT and AT motherboards were made. Everything ended up loaded into ships at Keelung or Kaohsiung.
Taiwan's era of local assembly was short-lived, and soon companies like Acer, then known as Multitech, were building factories in Malaysia, Thailand and Vietnam. By offshoring to Southeast Asia, Taiwan's industry thrived into the mid-1990s as its cost of labor rose.
Investing in factories in China would remain forbidden for ICT companies, but quasi-legal for makers of umbrellas, bicycle parts and low-tech goods, as long as the investment was under a corporate entity in a third country, then typically Hong Kong.
In 1988, Taiwan elected its first native born president, Lee Teng-hui, appointed by Chiang Ching-kuo, who inherited the presidency from his father Chiang Kai-shek.
In a sense, this forever ended the deceased Generalissmo Chiang's dream of reclaiming the mainland that he had lost, but instead of pleasing China it stirred deeper fears of Taiwan drifting towards political independence.
Things remained quiet, with China watching President Lee's every move, as he pursued diplomatic initiatives to expand the handful of countries – totaling 23 today – that still recognized the ROC government after it lost its UN seat in October 1971.
But, in the summer of 1995, President Lee's alma mater Cornell University invited him to speak, and when U.S. officials granted him a visa, China saw it as a serious breach in the triangular Taiwan-China-U.S. protocol.
Beijing went ballistic. Taiwan and the U.S. were issued warnings in words and missiles. Within days, Beijing announced a series of missile tests to be held July 21 and 26, north of Taiwan's Pengchiayu Island. The PLA mobilized forces in neighboring Fujian Province and stationed Jian-8 aircraft uncomfortably near its coast. Later, in August, China announced provocative joint sea-air military exercises. China's saber rattling continued for eight months, until mid-March 1996 when yet another round of missiles tests was conducted near shipping lanes off Taiwan's two main ports – Keelung and Kaohsiung – which control 70 percent of the island's shipping volume.
This last move was seen as a threat to voters in Taiwan's first presidential election on March 23, 1996. Undeterred, voters chose Lee as the first elected president on Chinese soil, giving him a term of another four years.
Throughout the hostilities, the U.S., in accordance with the 1979 Taiwan Relations Act, demonstrated its commitment to defend Taiwan against Chinese aggression.
The USS Nimitz was dispatched from across the Pacific to patrol the Taiwan Strait in the weeks before the March 1996 election. Nearby, the U.S. Seventh Fleet had six ships monitoring the live fire exercises at that time.
Finally, tensions faded.
For Taiwan, it was a test of resolve. Its stock market crashed, its currency plummeted, but the Third Taiwan Strait Crisis, as the events of 1995/1996 are known, had little impact on the technology industry.
Taiwan was still dotted with electronics factories, and more than two-thirds of Taiwan's output was made on the island, with the rest manufactured in Southeast Asia.
But this home-spun scenario changed with China, as illogical as it might seem, becoming the offshore destination for Taiwan factories.
China assumes Taiwan's role
By 2000, only half of Taiwan's ICT products were made locally, and this has since declined to a mere 4 percent. Meanwhile, Southeast Asia, which had accounted for 31 percent of Taiwan production in 2000, has seen its share slip to 10 percent.
Hands down, in terms of production share, the new leader is China, which has grown from an insignificant manufacturing partner to a major stakeholder with a 85 percent share during the decade since the Third Taiwan Strait Crisis.
Visit Taiwan's industrial parks today, and one doesn't see low-slung concrete buildings surrounded by parking lots crammed with thousands of 100cc motorcycles. Instead one spies glass-and-steel offices with a handful of BMWs and Mercedes near the front door and SUVs and mid-priced sedans in the employee lots.
Taiwan's industrial parks are centers for administration, R&D and engineering. The labor-intensive tasks have been delegated to workers in China.
This result is counter-intuitive. How did this come about?
"In 1995 and 1996," says CAPS' Yang, "there was a brief period of uncertainty, but the U.S. intervened and therefore confidence was restored." Was the Taiwan government's ban on China investment lifted? "No," he added. "There has been no change, and China investment still goes through third countries such as the Cayman Islands."
Yang's explanation is that Taiwan's ICT customers – the world's leading high-technology companies – were being wooed by China with investment incentives and promises of market access. Taiwan's businesses are "interdependent and integrated" into the operations of these customers, and as they moved into China, Taiwan's ICT makers had no choice but to follow.
Taiwan and China share a common language, history and culture, and given their proximity, its hardly surprising that their economies are deeply linked Yet this was accomplished without the governments of either side formally acknowledging the other side's existence, let alone their partner's overwhelming importance.
"The situation is unique," says Yang. "Between Taiwan and China, the politics are always confrontational, but there are extremely high levels of economic integration from which they each side benefits. Their economies of both will suffer if there is a disruption, and this is a source of great pressure for their leaders."
LCD panels represent core Taiwan strength
In the migration of Taiwan's technology manufacturing to China, the last men standing are TFT-LDC lenses and semiconductors.
Taiwan's leading panel suppliers -- AU Optronics, Chi Mei Optoelectronics, Chunghwa Picture Tubes and HannStar Display – build their lenses in local fabs and for the most part assemble them in China. TSMC, UMC and other chip makers have fabs up and down the island, but 52 percent of their output goes to China, and increasingly it is packaged and tested there by Taiwan or Chinese companies.
Tze-Chen Tu, general director of the Industrial Economics & Knowledge Center (IEK), at Taiwan's Industrial Technology Research Institute (ITRI), said that every country wants to keep its first-tier industries at home, and that technology transfers are banned if thought harmful to economic or national security.
"We don't like to see them go but even when Taiwan companies shift manufacturing to China, they come back for design and for critical components," said Tu.
Taiwan companies still need prior approval before investing (via a third country) in manufacturing facilities in China.
The general rule for all Taiwan companies is that the investment cannot exceed 40 percent of the enterprise's total valuation.
"Actually, we would like to swap out our 8-inch wafer plants by transferring the technology to China, and by then rebuilding them as 12-inch wafer fabs here," Tu said. "Environmental regulations [for new plants] are getting tougher and tougher in Taiwan, but by changing out existing fabs we would quickly receive approval by our EPA."
China would welcome such a deal, and it is already the world's largest purchaser of used semiconductor equipment, Tu added.
Yet Taiwan did loosen its rules a notch in April 2006. By December, Taipei approved a two-year old request by TSMC to build a 8-inch wafer fab in Shanghai.
New guidelines allow Taiwan semiconductors to operate an 8-inch wafer fab [.18 micron] in China, but only if the company continues to operate a state-of-the-art, 12-inch wafer fab on the island.
USTBC's Hammond-Chambers adds, "What the government regulation in Taiwan states is that when a license is given – and TSMC is the only one that has been granted one – they have to construct, complete and ramp up to full production a 12 inch facility in Taiwan before they can start shipping 8-inch equipment over to the mainland. In addition, they cannot buy new equipment for the mainland facility, they must move the equipment over from Taiwan."
A push for peace
That, no doubt, was cold comfort to UMC's Tsao, who just months before had been indicted on charges of flaunting these rules. He Jian Technology was founded in 2002 by former UMC employees, and Tsao allegedly provided "management assistance" for a 15 percent stake.
Facing a possible two-year jail term, Tsao resigned as chairman at UMC, but nearly two years later, on October 26, in Hsinchu District Court, he was acquitted of all charges.
Tsao began blogging shortly thereafter. Topping his home page is a banner beseeching the KMT's Ma Ying-jeou and DPP's Frank Hsieh – front-running candidates in the upcoming March 22 election – "to work together to draft a Cross-Strait Peaceful Coexistence Law, to resolve tensions between Taiwan and China, and to ease domestic political strife on Taiwan." Tsao's photo graces the page, and he signs as "an ordinary citizen concerned with national affairs".
Included are four essays that Tsao has penned, and a key message is his recommendation that President Chen scrap plans for a referendum on Taiwan's entry into the U.N. When not blogging, Tsao indulges a more expensive hobby – placing front page political ads in Taiwan's major newspapers.
Tsao's new career as political blogger has outraged President Chen, who has called the techno-statesman everything short of traitor. But momentum seems to be gathering behind Tsao's cross-strait business stance.
KMT presidential candidate Ma – in a complete reversal from the KMT's standoffish policy of past decades – has called for broad liberalization of Taiwan's business relations with China, and even for the inauguration of direct chartered flights between the two territories.
The DPP's candidate Hsieh is equally pro-business, promising immunity to Taiwan companies guilty of illegal investment in China. He suggests that investment restrictions be softened so that Taiwan technology companies are at parity with their counterparts from the U.S., Europe and other Asian countries.
Even so, current events bear eerie parallels with the events that sparked the Third Taiwan Strait Crisis.
Between now and March 22, Taiwan politics will push forward behind their own coded shields. There will be the issue of U.N. membership [independence], there will be a presidential election [democracy] and President Chen will push U.S. authorities for a landing visa [diplomatic recognition] for an upcoming flight to Guatemala.
Is the CIA retasking its satellites to observe PLA troop movements in Fujian? Is the U.S. naval fleet redeploying to nearby waters? Probably not.
"There won't be any brinksmanship in coming months," said CAPS' Yang. "Five or six years ago, there was a restructuring of the fleet in the North Pacific to enhance naval and military presence in the region and that sends a clear enough signal to Beijing.
"The stakes are getting higher," said Yang, referring to the hundred of billions of dollars in trade across the Taiwan Strait. "Both sides have clear and abundant knowledge of how to avoid a conflict and of how to further their political and economic interests."
USTBC's Hammond-Chambers said that the "massive economic integration" between Taiwan and China is reason enough to believe they won't go to war.
"That is a compelling case," he said. "It is certainly the public position of the US Taiwan Business Council to encourage further economic integration as a threat reducer."
"There is a guy who works for SEMI, the semiconductor association, who wrote a book called The Silicon Shield… he took the position that the United States would always come to Taiwan's side in the event of a conflict given the importance of Taiwan's chip manufacturing to the U.S. economy."
But, asked how China would react if Taiwan pushes its luck with the U.N. referendum, Hammond-Chambers demurred. "I don't think it will even get that far. In that instance, given the Chinese rhetoric over the past few decades, there would certainly be conflict. There would be some sort of military exchange. The Chinese, for myriad reasons, cannot allow Taiwan, at least at this juncture any way, to drift towards independence… The Chinese Communist Party, looking for ways to demonstrate to its people that it is the legitimate power, cannot allow Taiwan to drift. It cannot."
Common Yet Different Democracies
By Kurt Campbell
Last week, newspapers in New Hampshire and Taiwan -- thousands of kilometers apart and meant for vastly different audiences with completely different cultures and political traditions -- carried eerily familiar pictures. In one, a despondent Democratic Progressive Party (DPP) supporter was seen somewhat in shock after the results of the legislative elections were announced, which saw a rout of the DPP at the hands of rival Chinese Nationalist Party (KMT) candidates. The picture was accompanied by a story of what this would mean for the presidential election in March.
At the same time, a Nashua, New Hampshire, newspaper carried a very similar picture of a deflated supporter of Representative Barack Obama trudging dejectedly through the thick snow after Hillary Clinton's surprise upset in the Democratic primary.
While there is much that separates the US and Taiwan -- very different histories, national aspirations and worldviews -- there are still important things that unite them. The US and Taiwan each possesses among the most active and participatory democracies in the world and the intensity of the two presidential campaigns are cases in point.
There has been extensive discussion of late of a worrisome drift in the US-Taiwan relationship and there are indeed signs of discord and clear areas for worry.
President Chen Shui-bian's (陳水扁) seemingly insatiable push for a referendum on joining the UN has drawn particular ire from the Bush administration. So too have persistent disagreements about defense spending and participation in international institutions created occasional tensions between Washington and Taipei.
These instances of disagreement and discord take place amid the background of China's dramatic rise to great power status. It is undeniable that China now plays a much larger role in Washington's calculation on virtually every matter of global importance, from North Korean nuclear weapons to currency woes to energy anxieties to unrest in Pakistan.
The US now needs a constructive partnership with China as never before, which has resulted in Taiwan feeling increasingly squeezed by the growing weight of China in all matters of international diplomacy and commerce.
Nevertheless, what is often forgotten behind the banal bromides that celebrate the vibrancy of Taiwanese democracy is that the US and Taiwan share a common experience of democracy, including all its many disappointments, difficulties and dilemmas that cannot be easily ignored.
Indeed, national leaders who are regularly subjected to the difficult discipline of polling stations and voting booths understand each other at some very basic, core level.
While US officials often claim to be mystified by a Taiwanese move or maneuver on an issue related to identity or national character, the truth is that deep down, Americans of virtually every stripe understand the motivations behind initiatives that at the same time are seen as disruptive or even dangerous.
What is sometimes forgotten in the occasionally tense to and fro between Washington and Taipei is that unlike the previous era of US-Taiwanese diplomacy, when national authorities could act with much less concern about public scrutiny or opposition, the current leaders must be much more responsive to public sentiment and criticism.
While it is true that, on occasion, Taiwanese leaders have taken steps that went against the advice given by Washington, these initiatives were usually undertaken with a specific domestic group of supporters in mind. In a sense, this is the essence of democracy.
The challenge for this and the next generation of US and Taiwanese leaders will be to better appreciate the pressures and interests of the other. For the US president, it will mean a simultaneous desire to maintain a stable and durable understanding with China while at the same time seeking to preserve Taiwan's security and democracy.
For the Taiwanese president, it will mean negotiating a complex path between domestic expectations for greater national identity and international standing, while taking account of the obvious desires of both Beijing and Washington to avoid actions that could trigger a crisis.
Clearly, Washington and Taipei will have their hands full, but in the complex trilateral dialogue and diplomacy between Washington, Taipei and Beijing, it is clear that the common experience of democracy has created inevitable and undeniable connections between Taiwan and the US that cannot and should not be ignored. Indeed, it is these values, along with other strategic interests, that keep the US so closely engaged in the Western Pacific.
So, as presidential campaigning continues in the US and Taiwan, it is important to keep these common political experiences in mind while both sides negotiate a complex future together.
Kurt Campbell is the chief executive officer and cofounder of the Center for a New American Security.
Last week, newspapers in New Hampshire and Taiwan -- thousands of kilometers apart and meant for vastly different audiences with completely different cultures and political traditions -- carried eerily familiar pictures. In one, a despondent Democratic Progressive Party (DPP) supporter was seen somewhat in shock after the results of the legislative elections were announced, which saw a rout of the DPP at the hands of rival Chinese Nationalist Party (KMT) candidates. The picture was accompanied by a story of what this would mean for the presidential election in March.
At the same time, a Nashua, New Hampshire, newspaper carried a very similar picture of a deflated supporter of Representative Barack Obama trudging dejectedly through the thick snow after Hillary Clinton's surprise upset in the Democratic primary.
While there is much that separates the US and Taiwan -- very different histories, national aspirations and worldviews -- there are still important things that unite them. The US and Taiwan each possesses among the most active and participatory democracies in the world and the intensity of the two presidential campaigns are cases in point.
There has been extensive discussion of late of a worrisome drift in the US-Taiwan relationship and there are indeed signs of discord and clear areas for worry.
President Chen Shui-bian's (陳水扁) seemingly insatiable push for a referendum on joining the UN has drawn particular ire from the Bush administration. So too have persistent disagreements about defense spending and participation in international institutions created occasional tensions between Washington and Taipei.
These instances of disagreement and discord take place amid the background of China's dramatic rise to great power status. It is undeniable that China now plays a much larger role in Washington's calculation on virtually every matter of global importance, from North Korean nuclear weapons to currency woes to energy anxieties to unrest in Pakistan.
The US now needs a constructive partnership with China as never before, which has resulted in Taiwan feeling increasingly squeezed by the growing weight of China in all matters of international diplomacy and commerce.
Nevertheless, what is often forgotten behind the banal bromides that celebrate the vibrancy of Taiwanese democracy is that the US and Taiwan share a common experience of democracy, including all its many disappointments, difficulties and dilemmas that cannot be easily ignored.
Indeed, national leaders who are regularly subjected to the difficult discipline of polling stations and voting booths understand each other at some very basic, core level.
While US officials often claim to be mystified by a Taiwanese move or maneuver on an issue related to identity or national character, the truth is that deep down, Americans of virtually every stripe understand the motivations behind initiatives that at the same time are seen as disruptive or even dangerous.
What is sometimes forgotten in the occasionally tense to and fro between Washington and Taipei is that unlike the previous era of US-Taiwanese diplomacy, when national authorities could act with much less concern about public scrutiny or opposition, the current leaders must be much more responsive to public sentiment and criticism.
While it is true that, on occasion, Taiwanese leaders have taken steps that went against the advice given by Washington, these initiatives were usually undertaken with a specific domestic group of supporters in mind. In a sense, this is the essence of democracy.
The challenge for this and the next generation of US and Taiwanese leaders will be to better appreciate the pressures and interests of the other. For the US president, it will mean a simultaneous desire to maintain a stable and durable understanding with China while at the same time seeking to preserve Taiwan's security and democracy.
For the Taiwanese president, it will mean negotiating a complex path between domestic expectations for greater national identity and international standing, while taking account of the obvious desires of both Beijing and Washington to avoid actions that could trigger a crisis.
Clearly, Washington and Taipei will have their hands full, but in the complex trilateral dialogue and diplomacy between Washington, Taipei and Beijing, it is clear that the common experience of democracy has created inevitable and undeniable connections between Taiwan and the US that cannot and should not be ignored. Indeed, it is these values, along with other strategic interests, that keep the US so closely engaged in the Western Pacific.
So, as presidential campaigning continues in the US and Taiwan, it is important to keep these common political experiences in mind while both sides negotiate a complex future together.
Kurt Campbell is the chief executive officer and cofounder of the Center for a New American Security.
2008年1月17日星期四
Undemocratic KMT
By Charles Hong of Columbus, Ohio
If the Chinese Nationalist Party (KMT) has a conscience, it should feel ashamed of benefiting a great deal from the recent legislative elections.
Many people did not vote for Democratic Progressive Party (DPP) candidates because of the poor performance of the DPP government and several corruption cases. However, the KMT is partly responsible for the DPP administration's poor performance because KMT legislators repeatedly boycotted proposed government projects and disapproved or cut budgets, including the national and defense budgets. The KMT would rather see the DPP government fail than allow it to operate smoothly.
The past eight years also saw persistent conflict between the central government and the KMT-controlled Taipei City Government, which appears bent on implementing a "one nation, two systems" in Taiwan. Determined to oppose the government, the KMT continues to worship dictatorship, wears its "China" hat and is committed to "ultimate unification."
Corruption by government officials and their family members should be condemned. But the fact is the KMT is not any cleaner than the DPP. In last Saturday's referendums, 91.5 percent of the valid votes cast were in favor of asking the KMT to return its stolen assets and 58.2 percent were in favor of punishing corrupt officials. Unfortunately, both issues were defeated partly because of the KMT's campaign to boycott the referendums, including the one it proposed. Strangely, the KMT was afraid of a high turnout of voters.
In spite of the fatal setback the DPP suffered, DPP members have displayed sportsmanship. In contrast, after the last two presidential elections in 2000 and 2004, the KMT and other pan-blue party members protested loudly and violently in the streets day and night for several months. Taiwan needs democracy with sportsmanship.
"If the Chinese Nationalist Party (KMT) has a conscience, it should feel ashamed of benefiting a great deal from the recent legislative elections."
If they did, they would have long apologized for the atrocities they have committed, both past and present...
"In spite of the fatal setback the DPP suffered, DPP members have displayed sportsmanship. In contrast, after the last two presidential elections in 2000 and 2004, the KMT and other pan-blue party members protested loudly and violently in the streets day and night for several months. Taiwan needs democracy with sportsmanship."
Sportmanships is nice, but doesn't mean of thing if being a gracious loser means losing your country, or what was of it...
If the Chinese Nationalist Party (KMT) has a conscience, it should feel ashamed of benefiting a great deal from the recent legislative elections.
Many people did not vote for Democratic Progressive Party (DPP) candidates because of the poor performance of the DPP government and several corruption cases. However, the KMT is partly responsible for the DPP administration's poor performance because KMT legislators repeatedly boycotted proposed government projects and disapproved or cut budgets, including the national and defense budgets. The KMT would rather see the DPP government fail than allow it to operate smoothly.
The past eight years also saw persistent conflict between the central government and the KMT-controlled Taipei City Government, which appears bent on implementing a "one nation, two systems" in Taiwan. Determined to oppose the government, the KMT continues to worship dictatorship, wears its "China" hat and is committed to "ultimate unification."
Corruption by government officials and their family members should be condemned. But the fact is the KMT is not any cleaner than the DPP. In last Saturday's referendums, 91.5 percent of the valid votes cast were in favor of asking the KMT to return its stolen assets and 58.2 percent were in favor of punishing corrupt officials. Unfortunately, both issues were defeated partly because of the KMT's campaign to boycott the referendums, including the one it proposed. Strangely, the KMT was afraid of a high turnout of voters.
In spite of the fatal setback the DPP suffered, DPP members have displayed sportsmanship. In contrast, after the last two presidential elections in 2000 and 2004, the KMT and other pan-blue party members protested loudly and violently in the streets day and night for several months. Taiwan needs democracy with sportsmanship.
"If the Chinese Nationalist Party (KMT) has a conscience, it should feel ashamed of benefiting a great deal from the recent legislative elections."
If they did, they would have long apologized for the atrocities they have committed, both past and present...
"In spite of the fatal setback the DPP suffered, DPP members have displayed sportsmanship. In contrast, after the last two presidential elections in 2000 and 2004, the KMT and other pan-blue party members protested loudly and violently in the streets day and night for several months. Taiwan needs democracy with sportsmanship."
Sportmanships is nice, but doesn't mean of thing if being a gracious loser means losing your country, or what was of it...
A Beautfiul Country
By Hayley Swinamer of Canada
As a Canadian who lived in Taiwan for three years, I feel compelled to speak about last Saturday's elections.
I do not pretend to understand all the intricacies of Taiwanese politics and culture.
But what I do want to say to all Taiwanese is that you already have an interesting, vibrant, beautiful country that charms people who visit it, even for a short time. It would take too many pages to write about all the wonderful experiences I have been fortunate to have in Taiwan. I consider my years there as the best of my life, and I will be forever grateful for all the things I learned in Taiwan.
I spent some weeks in China during that time as well. I wish I had not. In all the cities I visited in China, I found none of the sparkle and charm of Taiwan.
I saw only downtrodden people, children begging on the streets, a tense atmosphere everywhere and horrible pollution. I am not implying that all of China is all of those things, or that China has no positive qualities, but my experience there was very negative.
Aside from my personal experience, China's horrible environmental and human rights records are very well-known. I was so thankful to get back to Taiwan after those weeks.
As I understand it, the Chinese Nationalist Party (KMT) has no interest in furthering Taiwan as it is, or taking it to its full potential. From all the information I can gather, the KMT will only use Taiwan to further its own ends, possibly eventually making it unrecognizable from the place it is today.
I frequently hear from my Taiwanese friends and acquaintances a wish that Taiwan was "more," "bigger," "grander" and so on. Please look around at your wonderful country, which bears much less resemblance to China than most people know and realize what a wonderful place it is and all its potential to be even more. Please don't allow fear, or short-term thinking to give the KMT -- or anyone -- the power to harm or destroy such a wonderful place as Taiwan.
As a Canadian who lived in Taiwan for three years, I feel compelled to speak about last Saturday's elections.
I do not pretend to understand all the intricacies of Taiwanese politics and culture.
But what I do want to say to all Taiwanese is that you already have an interesting, vibrant, beautiful country that charms people who visit it, even for a short time. It would take too many pages to write about all the wonderful experiences I have been fortunate to have in Taiwan. I consider my years there as the best of my life, and I will be forever grateful for all the things I learned in Taiwan.
I spent some weeks in China during that time as well. I wish I had not. In all the cities I visited in China, I found none of the sparkle and charm of Taiwan.
I saw only downtrodden people, children begging on the streets, a tense atmosphere everywhere and horrible pollution. I am not implying that all of China is all of those things, or that China has no positive qualities, but my experience there was very negative.
Aside from my personal experience, China's horrible environmental and human rights records are very well-known. I was so thankful to get back to Taiwan after those weeks.
As I understand it, the Chinese Nationalist Party (KMT) has no interest in furthering Taiwan as it is, or taking it to its full potential. From all the information I can gather, the KMT will only use Taiwan to further its own ends, possibly eventually making it unrecognizable from the place it is today.
I frequently hear from my Taiwanese friends and acquaintances a wish that Taiwan was "more," "bigger," "grander" and so on. Please look around at your wonderful country, which bears much less resemblance to China than most people know and realize what a wonderful place it is and all its potential to be even more. Please don't allow fear, or short-term thinking to give the KMT -- or anyone -- the power to harm or destroy such a wonderful place as Taiwan.
Taiwanese Be Proud
By Samuel Yang of Bloomfield Hills, Michigan
The resounding defeat of the indendependence-leaning ruling party in the recent legislative elections must have been profoundly depressing to those who hoped for self-determination for Taiwan.
The defeat may look like a forfeiture of self-determination. However, Taiwanese democracy has survived a very bitter contest between the pro-Taiwan and pro-China groups, without significant civic unrest. Moreover, it has also overcome the subversive threat of China's united front tactics.
As such, Taiwanese should hold their heads up high and treasure the preservation of this most remarkable democracy. The decision of the majority prevailed, and all issues can be resolved by peaceful means.
The extraordinary tolerance shown by the pro-Taiwan group to the anti-democratic provocations by the opposition should not be considered cowardice. Instead, it should be rewarded handsomely in future elections.
The legislative responsibilities of rooting out corruption in the government, reinvigorating the economy and safeguarding Taiwan's sovereignty are now entirely in the hands of the pro-China group. The pro-Taiwan group will be in the driver's seat to oversee the performance of the Chinese Nationalist Party (KMT). A free press and free speech, which had been carefully nurtured by the ruling party during the last eight years, will also scrutinize the promises made by the KMT before the elections.
With a firmly established democracy, it will be impossible for the KMT to resurrect the past autocratic regime. In March, the pro-Taiwan group will have another chance to prove that its relentless pursuit of democracy is most beneficial to all Taiwanese.
The resounding defeat of the indendependence-leaning ruling party in the recent legislative elections must have been profoundly depressing to those who hoped for self-determination for Taiwan.
The defeat may look like a forfeiture of self-determination. However, Taiwanese democracy has survived a very bitter contest between the pro-Taiwan and pro-China groups, without significant civic unrest. Moreover, it has also overcome the subversive threat of China's united front tactics.
As such, Taiwanese should hold their heads up high and treasure the preservation of this most remarkable democracy. The decision of the majority prevailed, and all issues can be resolved by peaceful means.
The extraordinary tolerance shown by the pro-Taiwan group to the anti-democratic provocations by the opposition should not be considered cowardice. Instead, it should be rewarded handsomely in future elections.
The legislative responsibilities of rooting out corruption in the government, reinvigorating the economy and safeguarding Taiwan's sovereignty are now entirely in the hands of the pro-China group. The pro-Taiwan group will be in the driver's seat to oversee the performance of the Chinese Nationalist Party (KMT). A free press and free speech, which had been carefully nurtured by the ruling party during the last eight years, will also scrutinize the promises made by the KMT before the elections.
With a firmly established democracy, it will be impossible for the KMT to resurrect the past autocratic regime. In March, the pro-Taiwan group will have another chance to prove that its relentless pursuit of democracy is most beneficial to all Taiwanese.
DPP Loss Part of Democratic Process
By Cao Changqing 曹長青
THE RESULT OF the legislative elections was difficult for everyone in the pan-green camp. Questions abound on why it happened and what the green camp should do next. Pro-pan-blue media have given two explanations for the results: It was a vote of no confidence in President Chen Shui-bian (陳水扁), and it was the result of the deep-greens taking the Democratic Progressive Party (DPP) hostage.
There are two reasons why the Chinese Nationalist Party (KMT) is making much of these interpretations. First, the KMT wants to lead the public into thinking that Ma Ying-jeou (馬英九), the party's presidential candidate, is most likely to be elected. And second, the KMT wants to lure the DPP into adopting a more moderate line, thus putting a stop to the normalization of the country and weakening the confidence of pan-green supporters.
A closer look at the election system and structure would reveal the reasons behind the DPP loss.
First, the change to a new single-member district, two-vote system. In 2005, former DPP chairman Lin I-hsiung (林義雄) went on a hunger strike to call for a reduction in the number of legislative seats. This came from an idealistic view of politics. However, the new system favored the KMT, with its stash of stolen assets and huge and well organized power base. As a result, when a blue and a green candidate competed for a seat in one district, the pan-blue candidate obviously had the advantage. The day the new single-member district system was decided on, the green camp's loss became unavoidable. The KMT won only 15 percent more votes than the DPP in the elections, but garnered 4.7 times the number of seats. This shows just how much the pan-blue camp benefited from the new voting system. For the pan-green camp, this was the bitter result of top party members insisting on political correctness at the expense of political reality.
A second cause of the DPP loss was the vote captains. In Yunlin County, a 27-year-old woman who had just finished her studies, never been elected to any local council and lacked political experience and qualifications became a legislator because her father had a large power base in the area. This happened while many honest, skilled, senior legislators lost, demonstrating the effectiveness of a vote captain culture at the grassroots level. The KMT has at least 250 times more assets than the DPP and can support its vote captain culture with injections of cash. This made the election battle very unbalanced, but it is the price the country had to pay for a peaceful transfer of power, and it must be endured.
The third reason behind the DPP loss was the economy. Since the green camp came to power, the Chinese Communist Party, together with the KMT, has lamented the state of affairs in Taiwan, exaggerating Taiwan's economic problems and saying the public couldn't make ends meet because the DPP government was ineffective. Even former president Lee Teng-hui (李登輝) went along with this and talked about how the public was suffering. And with the KMT-controlled media contributing to the distortion of facts and reinforcing this message of an economic malaise, many were swayed.
A fourth reason was overly high expectations. After the fall of communist regimes in Eastern Europe, most democratic parties that came to power faced the same problem after taking office for the first time: very high expectations from the public. As soon as a member of the government was found to be corrupt, the party's supporters became enraged. The old media added fuel to the fire and, as a result, the public became even less forgiving of the new government than the old one. Often, democratic governments that had come to power in these new East European democracies lost in the next elections. However, as the public gradually gained more faith in democracy, the democratic parties became more successful.
Under the KMT and China's watch, Taiwan's situation is more difficult than that of East European countries. The DPP may have suffered in the elections, but as long as Taiwanese don't give up their faith in democracy and remain steadfast in upholding Taiwanese identity, Taiwan can still succeed in its quest for normalization. The pan-green camp must now leave all its old complaints behind, refrain from fingerpointing, stop being discouraged or disappointed and put all its efforts into winning over the public and outrunning the KMT in the March presidential election.
Cao Changqing is a political commentator based in the US.
THE RESULT OF the legislative elections was difficult for everyone in the pan-green camp. Questions abound on why it happened and what the green camp should do next. Pro-pan-blue media have given two explanations for the results: It was a vote of no confidence in President Chen Shui-bian (陳水扁), and it was the result of the deep-greens taking the Democratic Progressive Party (DPP) hostage.
There are two reasons why the Chinese Nationalist Party (KMT) is making much of these interpretations. First, the KMT wants to lead the public into thinking that Ma Ying-jeou (馬英九), the party's presidential candidate, is most likely to be elected. And second, the KMT wants to lure the DPP into adopting a more moderate line, thus putting a stop to the normalization of the country and weakening the confidence of pan-green supporters.
A closer look at the election system and structure would reveal the reasons behind the DPP loss.
First, the change to a new single-member district, two-vote system. In 2005, former DPP chairman Lin I-hsiung (林義雄) went on a hunger strike to call for a reduction in the number of legislative seats. This came from an idealistic view of politics. However, the new system favored the KMT, with its stash of stolen assets and huge and well organized power base. As a result, when a blue and a green candidate competed for a seat in one district, the pan-blue candidate obviously had the advantage. The day the new single-member district system was decided on, the green camp's loss became unavoidable. The KMT won only 15 percent more votes than the DPP in the elections, but garnered 4.7 times the number of seats. This shows just how much the pan-blue camp benefited from the new voting system. For the pan-green camp, this was the bitter result of top party members insisting on political correctness at the expense of political reality.
A second cause of the DPP loss was the vote captains. In Yunlin County, a 27-year-old woman who had just finished her studies, never been elected to any local council and lacked political experience and qualifications became a legislator because her father had a large power base in the area. This happened while many honest, skilled, senior legislators lost, demonstrating the effectiveness of a vote captain culture at the grassroots level. The KMT has at least 250 times more assets than the DPP and can support its vote captain culture with injections of cash. This made the election battle very unbalanced, but it is the price the country had to pay for a peaceful transfer of power, and it must be endured.
The third reason behind the DPP loss was the economy. Since the green camp came to power, the Chinese Communist Party, together with the KMT, has lamented the state of affairs in Taiwan, exaggerating Taiwan's economic problems and saying the public couldn't make ends meet because the DPP government was ineffective. Even former president Lee Teng-hui (李登輝) went along with this and talked about how the public was suffering. And with the KMT-controlled media contributing to the distortion of facts and reinforcing this message of an economic malaise, many were swayed.
A fourth reason was overly high expectations. After the fall of communist regimes in Eastern Europe, most democratic parties that came to power faced the same problem after taking office for the first time: very high expectations from the public. As soon as a member of the government was found to be corrupt, the party's supporters became enraged. The old media added fuel to the fire and, as a result, the public became even less forgiving of the new government than the old one. Often, democratic governments that had come to power in these new East European democracies lost in the next elections. However, as the public gradually gained more faith in democracy, the democratic parties became more successful.
Under the KMT and China's watch, Taiwan's situation is more difficult than that of East European countries. The DPP may have suffered in the elections, but as long as Taiwanese don't give up their faith in democracy and remain steadfast in upholding Taiwanese identity, Taiwan can still succeed in its quest for normalization. The pan-green camp must now leave all its old complaints behind, refrain from fingerpointing, stop being discouraged or disappointed and put all its efforts into winning over the public and outrunning the KMT in the March presidential election.
Cao Changqing is a political commentator based in the US.
Voting Democracy Away
There is a saying that has long circulated in circles like Washington that "Chinese are too busy making money to worry about democracy."
Author James Mann, however, contends in his book The China Fantasy that this is a fallacy and just a convenient sound bite for foreign businesspeople and politicians who wish to ignore the authoritarian nature of China's current regime while taking advantage of its cheap labor.
The frequent demonstrations seen in Hong Kong opposing Beijing's heavy-handed rule and the lack of democratic progress since its handover to China lend credence to Mann's theory. Just last Sunday, about 20,000 Hong Kongers took to the streets in the latest protest calling for universal suffrage in the territory. The protesters were upset at Beijing's announcement last month that they might be able to elect their leader by 2017. Hong Kongers had been pushing for the right to elect their government by 2012.
It is a safe bet that given the chance, millions of people in China would also help prove Mann right.
Contrast this with events here last Saturday, when Taiwanese voted for a new legislature. The outcome saw the Chinese Nationalist Party (KMT) gain a two-thirds majority in the legislature, giving the party's presidential candidate, Ma Ying-jeou (馬英九), a huge boost ahead of the March presidential poll.
The KMT backs increasing cross-strait economic ties, arguing that more business with China will help solve what they term "Taiwan's economic malaise."
But despite promises from Ma that he will not talk unification if elected president, the increased business and cultural contact that would occur under a Beijing-friendly KMT government and the sacrifices of sovereignty the KMT will have to make to achieve this will make future expressions of Taiwan's current independent status even more difficult and the drift toward some kind of unification agreement all the more unavoidable.
This could eventually pose a threat to the full democratic rights Taiwanese now enjoy.
Increasing cross-strait business ties and investment will only give China more control over Taiwan's prosperity and will likely result in more wealthy and influential Taiwanese tying their colors to Beijing's mast. People like former United Microelectronics Corp chairman Robert Tsao (曹興誠) bear testament to this.
When Chris Patten, the last British governor of Hong Kong, tried to institutionalize democratic ideals in the territory ahead of its return to China, some of his most vociferous opponents were the billionaire business barons who considered democracy an unnecessary and unwanted obstacle to their continued wealth accumulation.
Mann points out that a similar phenomenon could occur in China's ruling and newly wealthy middle class. This could prevent the move toward democracy in China that US officials seem convinced increased trade relations will eventually bring.
Taking this into account, Taiwanese could also one day find themselves in the same situation as Hong Kongers, where tycoons who hold influence in Taipei and have a vested interest in China continue to oppose democracy.
Of course, Taiwan's already established democratic system would be difficult for China to dismantle, but with Beijing's relentless arms build-up showing no sign of slowing and its burgeoning economic might bringing other powerful countries to heel, 20 years from now Taiwan may be in no position to resist.
How ironic it would be if Taiwan, the first and only true democracy in an ethnic Chinese country, were to buck the global trend and give its hard-won freedom away.
Taipei Times Editorial, January 18, 2008
"How ironic it would be if Taiwan, the first and only true democracy in an ethnic Chinese country, were to buck the global trend and give its hard-won freedom away."
ironic indeed...
Author James Mann, however, contends in his book The China Fantasy that this is a fallacy and just a convenient sound bite for foreign businesspeople and politicians who wish to ignore the authoritarian nature of China's current regime while taking advantage of its cheap labor.
The frequent demonstrations seen in Hong Kong opposing Beijing's heavy-handed rule and the lack of democratic progress since its handover to China lend credence to Mann's theory. Just last Sunday, about 20,000 Hong Kongers took to the streets in the latest protest calling for universal suffrage in the territory. The protesters were upset at Beijing's announcement last month that they might be able to elect their leader by 2017. Hong Kongers had been pushing for the right to elect their government by 2012.
It is a safe bet that given the chance, millions of people in China would also help prove Mann right.
Contrast this with events here last Saturday, when Taiwanese voted for a new legislature. The outcome saw the Chinese Nationalist Party (KMT) gain a two-thirds majority in the legislature, giving the party's presidential candidate, Ma Ying-jeou (馬英九), a huge boost ahead of the March presidential poll.
The KMT backs increasing cross-strait economic ties, arguing that more business with China will help solve what they term "Taiwan's economic malaise."
But despite promises from Ma that he will not talk unification if elected president, the increased business and cultural contact that would occur under a Beijing-friendly KMT government and the sacrifices of sovereignty the KMT will have to make to achieve this will make future expressions of Taiwan's current independent status even more difficult and the drift toward some kind of unification agreement all the more unavoidable.
This could eventually pose a threat to the full democratic rights Taiwanese now enjoy.
Increasing cross-strait business ties and investment will only give China more control over Taiwan's prosperity and will likely result in more wealthy and influential Taiwanese tying their colors to Beijing's mast. People like former United Microelectronics Corp chairman Robert Tsao (曹興誠) bear testament to this.
When Chris Patten, the last British governor of Hong Kong, tried to institutionalize democratic ideals in the territory ahead of its return to China, some of his most vociferous opponents were the billionaire business barons who considered democracy an unnecessary and unwanted obstacle to their continued wealth accumulation.
Mann points out that a similar phenomenon could occur in China's ruling and newly wealthy middle class. This could prevent the move toward democracy in China that US officials seem convinced increased trade relations will eventually bring.
Taking this into account, Taiwanese could also one day find themselves in the same situation as Hong Kongers, where tycoons who hold influence in Taipei and have a vested interest in China continue to oppose democracy.
Of course, Taiwan's already established democratic system would be difficult for China to dismantle, but with Beijing's relentless arms build-up showing no sign of slowing and its burgeoning economic might bringing other powerful countries to heel, 20 years from now Taiwan may be in no position to resist.
How ironic it would be if Taiwan, the first and only true democracy in an ethnic Chinese country, were to buck the global trend and give its hard-won freedom away.
Taipei Times Editorial, January 18, 2008
"How ironic it would be if Taiwan, the first and only true democracy in an ethnic Chinese country, were to buck the global trend and give its hard-won freedom away."
ironic indeed...
Use Your Horsepower Sense, Buy Used.
By Laura Rowley, Money & Happiness
The North American International Auto Show opens to the public on Jan. 19 in Detroit, showcasing luxury sedans, shiny sports cars, and roomy SUVs that rival some of the city's single-family homes in price.
But while there's nothing like being the first to nestle in a new car's supple leather seats and inhale that fresh-from-the-assembly-line perfume, it's an expensive romance.
Online Shopping Soars, New-Car Values Drop
If the idea of saving thousands of dollars is more thrilling to you than that new-car smell, you'll find your heart's desire in the used car market. A wider pool of quality used cars, and progress in Internet search functionality, have vastly changed the buying experience.
In 2007, roughly one in four buyers of late-model used vehicles relied on an Internet vehicle locator or online classified ad service to find the auto they purchased. That's a 44 percent jump over the previous year, according to a study by J.D. Power and Associates.
And there's no beating the price. "People don't think of depreciation as an out-of-pocket cost, but it is," says Philip Reed, senior consumer advice editor at Edmunds.com and author of "Strategies for Smart Car Buyers." "There's a steep drop off in [value] in the first year, and 30 percent depreciation by the end of the third year."
For example, Edmunds looked at the Lexus GS 430 and GS 450. "The first-year depreciation on the new car is $14,000; if you bought a two-year-old model, the depreciation is $3,000 in the first year of ownership," says Reed.
Know What You're Looking For
Before you begin your search, get the Kelley Blue Book value on the make, model, and year of the car you're considering. Edmunds offers two appraisal tools: the True Market Value guide and the True Cost to Own calculator, which considers ownership costs like maintenance, repairs, depreciation, and fuel.
If you don't have a specific vehicle in mind, the $10 "Consumer Reports Used Car Buying Guide 2008," which comes out on Jan. 22, is a good place to start. Quality is widespread, experts say, so look beyond the popular brand names. "I worked as a mechanic 30 years ago, and it wasn't unusual to overhaul the engine at 75,000 to 80,000 miles," says John Paul, AAA's southern New England "car doctor." "They don't make them like they used to -- and that's a good thing. The line between best and worst is pretty thin these days." (See my blog for specific model recommendations.)
Also get a one-month subscription to CARFAX, the oldest of several services that offer reports on a vehicle's history through its vehicle identification number (VIN). The report tells you how many owners the vehicle has had, when it was serviced, and whether there was an odometer rollback or a salvage report -- indicating that the car was stolen, in a serious accident, or flooded.
"The VIN can also let you know any outstanding recalls that need to be taken care of," says Paul, "Thirty to forty percent of recalls announced never actually get fulfilled."
Do Your Research
Next, head to the Internet. The sheer volume of listings, ease of use, ability to refine a search, and forums with advice from other buyers has mushroomed in recent years. Some 72 percent of Internet shoppers in 2007 visited consumer forums to get opinions from real car buyers, and 94 percent found it helpful, according to the J.D. Power and Associates study.
If you're someone who worries about buying a lemon, go to the individual automaker's home page and click on "certified pre-owned vehicles." These models are usually no more than five years old, and undergo an inspection based on the manufacturer's certification standards. Most important, you get a warranty. (Be sure to get the real deal from the manufacturer, rather than an extended service contract issued by a third party.)
All that reassurance can be costly, though. "You don't get the bargains in certified shopping, because they try to turn used-car buying into a new-car experience," says Reed. "You don't need a mechanical inspection of a vehicle, and they give you a guarantee. That makes it simple, but you will pay extra."
Online Bargains Abound
CarMax.com is another fast-growing seller that offers warranty protection. (Warren Buffett's Berkshire Hathaway bought a 6 percent stake in the company last November.) CarMax operates 86 used car stores in 39 U.S. markets, where it buys, reconditions, and resells vehicles. You can search its entire network through the web site and have the car shipped to you for a fee. The company touts its no-haggle pricing and five-day money-back guarantee. (Even with a warranty, it may be worthwhile to pay an extra $100 or so to have a vehicle inspected by an independent mechanic.)
Then there are the online auto classified ad sites, offering vehicles from both dealers and private sellers. You can search by make, model, year, price, mileage, location, and more than a dozen specific features, from engine to upholstery. The biggest players include AutoTrader.com, with 3 million cars for sale; Cars.com; and eBay Motors, which had $18 billion in sales last year.
According to Reed, "eBay is a very active source, and it's my estimation that [non-specialty] cars sell at wholesale prices on eBay" He adds, "There's quite a bit of flexibility to search for local cars, and work with a seller in terms of inspecting it beforehand. People are also buying cars and having them shipped without a whole lot of fuss. There are usually provisions if [the vehicle] doesn't live up to the description." (See my blog for buying tips.)
Better Safe Than Sorry
As for safety, experts say most late-model used cars offer the critical features. First, examine the crash test data from both the government and the Insurance Institute for Highway Safety. Then put these top safety features on your shopping list:
• Airbags: Frontal airbags have been required since 1998 in passenger cars and 1999 in SUVs and trucks, but side- and rear-impact air bags are still optional, and may be difficult to find in used cars, says Reed.
• Antilock brake systems (ABS): When you slam on your brakes in a panic, you often lose steering ability. "If the wheels aren't turning, you're on a platform skidding forward," says Reed. "With ABS, you can continue to steer -- it's a huge development in safety." ABS can be found on two-thirds of new cars.
• Electronic Stability Control (ESC): This feature allows the car to sense when the wheels are losing traction on a turn, and independently brakes the wheels to keep you in the direction you need to go without rolling over. It's estimated to save between 5,000 and 10,000 lives a year. ESC was standard in half of new cars last year, and the government is requiring it in almost all vehicles by 2012.
•Tire pressure systems: "It's appalling how little attention people pay to the pressure in tires," says Reed, adding that these systems will become mandatory in new vehicles in 2008. "You begin to compromise safety at 5 percent below recommended pressure, fuel economy is compromised immediately, and the tire wear is increased."
What you won't find in the used market are the features like airbags for the legs and knees, lane departure warning systems, and rear back-up cameras, with a screen to show what's behind the vehicle when you put it in reverse. "There are going to be tradeoffs when you buy used," says Reed, "but you can find everything you need. And far and away the most important safety factor is the driver."
The North American International Auto Show opens to the public on Jan. 19 in Detroit, showcasing luxury sedans, shiny sports cars, and roomy SUVs that rival some of the city's single-family homes in price.
But while there's nothing like being the first to nestle in a new car's supple leather seats and inhale that fresh-from-the-assembly-line perfume, it's an expensive romance.
Online Shopping Soars, New-Car Values Drop
If the idea of saving thousands of dollars is more thrilling to you than that new-car smell, you'll find your heart's desire in the used car market. A wider pool of quality used cars, and progress in Internet search functionality, have vastly changed the buying experience.
In 2007, roughly one in four buyers of late-model used vehicles relied on an Internet vehicle locator or online classified ad service to find the auto they purchased. That's a 44 percent jump over the previous year, according to a study by J.D. Power and Associates.
And there's no beating the price. "People don't think of depreciation as an out-of-pocket cost, but it is," says Philip Reed, senior consumer advice editor at Edmunds.com and author of "Strategies for Smart Car Buyers." "There's a steep drop off in [value] in the first year, and 30 percent depreciation by the end of the third year."
For example, Edmunds looked at the Lexus GS 430 and GS 450. "The first-year depreciation on the new car is $14,000; if you bought a two-year-old model, the depreciation is $3,000 in the first year of ownership," says Reed.
Know What You're Looking For
Before you begin your search, get the Kelley Blue Book value on the make, model, and year of the car you're considering. Edmunds offers two appraisal tools: the True Market Value guide and the True Cost to Own calculator, which considers ownership costs like maintenance, repairs, depreciation, and fuel.
If you don't have a specific vehicle in mind, the $10 "Consumer Reports Used Car Buying Guide 2008," which comes out on Jan. 22, is a good place to start. Quality is widespread, experts say, so look beyond the popular brand names. "I worked as a mechanic 30 years ago, and it wasn't unusual to overhaul the engine at 75,000 to 80,000 miles," says John Paul, AAA's southern New England "car doctor." "They don't make them like they used to -- and that's a good thing. The line between best and worst is pretty thin these days." (See my blog for specific model recommendations.)
Also get a one-month subscription to CARFAX, the oldest of several services that offer reports on a vehicle's history through its vehicle identification number (VIN). The report tells you how many owners the vehicle has had, when it was serviced, and whether there was an odometer rollback or a salvage report -- indicating that the car was stolen, in a serious accident, or flooded.
"The VIN can also let you know any outstanding recalls that need to be taken care of," says Paul, "Thirty to forty percent of recalls announced never actually get fulfilled."
Do Your Research
Next, head to the Internet. The sheer volume of listings, ease of use, ability to refine a search, and forums with advice from other buyers has mushroomed in recent years. Some 72 percent of Internet shoppers in 2007 visited consumer forums to get opinions from real car buyers, and 94 percent found it helpful, according to the J.D. Power and Associates study.
If you're someone who worries about buying a lemon, go to the individual automaker's home page and click on "certified pre-owned vehicles." These models are usually no more than five years old, and undergo an inspection based on the manufacturer's certification standards. Most important, you get a warranty. (Be sure to get the real deal from the manufacturer, rather than an extended service contract issued by a third party.)
All that reassurance can be costly, though. "You don't get the bargains in certified shopping, because they try to turn used-car buying into a new-car experience," says Reed. "You don't need a mechanical inspection of a vehicle, and they give you a guarantee. That makes it simple, but you will pay extra."
Online Bargains Abound
CarMax.com is another fast-growing seller that offers warranty protection. (Warren Buffett's Berkshire Hathaway bought a 6 percent stake in the company last November.) CarMax operates 86 used car stores in 39 U.S. markets, where it buys, reconditions, and resells vehicles. You can search its entire network through the web site and have the car shipped to you for a fee. The company touts its no-haggle pricing and five-day money-back guarantee. (Even with a warranty, it may be worthwhile to pay an extra $100 or so to have a vehicle inspected by an independent mechanic.)
Then there are the online auto classified ad sites, offering vehicles from both dealers and private sellers. You can search by make, model, year, price, mileage, location, and more than a dozen specific features, from engine to upholstery. The biggest players include AutoTrader.com, with 3 million cars for sale; Cars.com; and eBay Motors, which had $18 billion in sales last year.
According to Reed, "eBay is a very active source, and it's my estimation that [non-specialty] cars sell at wholesale prices on eBay" He adds, "There's quite a bit of flexibility to search for local cars, and work with a seller in terms of inspecting it beforehand. People are also buying cars and having them shipped without a whole lot of fuss. There are usually provisions if [the vehicle] doesn't live up to the description." (See my blog for buying tips.)
Better Safe Than Sorry
As for safety, experts say most late-model used cars offer the critical features. First, examine the crash test data from both the government and the Insurance Institute for Highway Safety. Then put these top safety features on your shopping list:
• Airbags: Frontal airbags have been required since 1998 in passenger cars and 1999 in SUVs and trucks, but side- and rear-impact air bags are still optional, and may be difficult to find in used cars, says Reed.
• Antilock brake systems (ABS): When you slam on your brakes in a panic, you often lose steering ability. "If the wheels aren't turning, you're on a platform skidding forward," says Reed. "With ABS, you can continue to steer -- it's a huge development in safety." ABS can be found on two-thirds of new cars.
• Electronic Stability Control (ESC): This feature allows the car to sense when the wheels are losing traction on a turn, and independently brakes the wheels to keep you in the direction you need to go without rolling over. It's estimated to save between 5,000 and 10,000 lives a year. ESC was standard in half of new cars last year, and the government is requiring it in almost all vehicles by 2012.
•Tire pressure systems: "It's appalling how little attention people pay to the pressure in tires," says Reed, adding that these systems will become mandatory in new vehicles in 2008. "You begin to compromise safety at 5 percent below recommended pressure, fuel economy is compromised immediately, and the tire wear is increased."
What you won't find in the used market are the features like airbags for the legs and knees, lane departure warning systems, and rear back-up cameras, with a screen to show what's behind the vehicle when you put it in reverse. "There are going to be tradeoffs when you buy used," says Reed, "but you can find everything you need. And far and away the most important safety factor is the driver."
2008年1月16日星期三
Unsung Victims of Dollar Diplomacy
By Vincent Rollet
FOLLOWING MALAWI'S DECISION to drop ties with Taiwan in favor of China, an important issue is emerging: What will happen to people living with HIV/AIDS who receive treatment and care from a joint Malawi-Taiwan program in Mzuzu City in the country's north?
The impact on Malawians could be devastating. Several other agricultural, health and cultural projects involving Taiwan will also have to be canceled at the expense of the local population.
In 2000, a Taiwanese medical mission began to work in the only referral hospital in Northern Malawi province, which is home to 4 million people who have limited access to modern facilities.
Given a nationwide lack of medical staff -- a problem that Medecins Sans Frontieres has cited time and again -- the presence of the 20 regular medical staff from Taiwan is very welcome; the team provides around 40 percent of in-hospital care in Mzuzu.
To support the fight against HIV/AIDS in Malawi -- where about 1 million people are living with HIV/AIDS and where 15 percent of people aged 15 to 49 are infected -- the Taiwanese team, in cooperation with Mzuzu Hospital, launched a program that has allowed around 7,900 patients to receive antiretroviral treatment.
The joint program includes a therapeutic follow-up, which relies on a monitoring electronic system that was developed by the Taiwanese team and that is internationally recognized (The Lancet, Vol. 365, Issue 9469, April 23, 2005).
If, in the name of non-dual recognition, the Taiwanese medical mission has to leave Malawi, the consequences for these patients could be disastrous.
If the team leaves Mzuzu Hospital, the capacity to provide treatment to people living with HIV/AIDS will decrease sharply and will not be replaced by other Malawian health professionals, despite the fact that the mission has made a point of including local health professionals in the program.
Provision of care, distribution of antiretroviral drugs and monitoring of HIV patients will also decrease.
People living with HIV/AIDS will directly suffer from this development and the risk of resistance to drugs will be increased because of the interruption to their treatment.
There is a possibility that the Taiwanese will be replaced by a Chinese medical team.
In theory this could work, but in reality the new team would have to spend time building trust with local people to understand the sociopolitical situation and to gather sufficient expertise on the local experience of HIV/AIDS. This process would take some time. So, once again, the quality of care, drug distribution and follow-up would be seriously disrupted.
For the sake of the health of Malawians living in the northern part of the country -- and particularly for those who are living with HIV/AIDS -- it is a far better option that the Taiwanese team continue its work at Mzuzu Hospital.
The continued provision of adequate health services to the region will rely on the wisdom of the three governments involved.
Taiwan has to accept the need to continue supporting its medical team at the AIDS clinic even now that Malawi has made China a diplomatic ally.
This would offer conspicuous evidence that Taiwan does not play politics over health.
China, as a responsible state committed to the promotion of sustainable development, should let the Taiwanese team continue pursuing its work, which is important for the development of a country that has high rates of HIV/AIDS.
New health projects could be developed by China in other regions where health access remains limited.
Finally, the Malawian government should understand that if it supports the departure of the Taiwanese medical team, the main victims in this diplomatic shift would be its own people, notably people living with HIV/AIDS in the north.
The question is this: Is it acceptable for a democratic country to sacrifice its own population for political gain?
The health of people living with HIV/AIDS and of people in the northern region of Malawi in general directly depends on the interlinked responses of the three governments.
If any one of them places politics before health, it must be aware that lives will be put in great danger.
Vincent Rollet is a doctoral candidate in the Department of International Relations at the Institute of Political Science in Paris.
"Taiwan has to accept the need to continue supporting its medical team at the AIDS clinic even now that Malawi has made China a diplomatic ally."
Oh really?
FOLLOWING MALAWI'S DECISION to drop ties with Taiwan in favor of China, an important issue is emerging: What will happen to people living with HIV/AIDS who receive treatment and care from a joint Malawi-Taiwan program in Mzuzu City in the country's north?
The impact on Malawians could be devastating. Several other agricultural, health and cultural projects involving Taiwan will also have to be canceled at the expense of the local population.
In 2000, a Taiwanese medical mission began to work in the only referral hospital in Northern Malawi province, which is home to 4 million people who have limited access to modern facilities.
Given a nationwide lack of medical staff -- a problem that Medecins Sans Frontieres has cited time and again -- the presence of the 20 regular medical staff from Taiwan is very welcome; the team provides around 40 percent of in-hospital care in Mzuzu.
To support the fight against HIV/AIDS in Malawi -- where about 1 million people are living with HIV/AIDS and where 15 percent of people aged 15 to 49 are infected -- the Taiwanese team, in cooperation with Mzuzu Hospital, launched a program that has allowed around 7,900 patients to receive antiretroviral treatment.
The joint program includes a therapeutic follow-up, which relies on a monitoring electronic system that was developed by the Taiwanese team and that is internationally recognized (The Lancet, Vol. 365, Issue 9469, April 23, 2005).
If, in the name of non-dual recognition, the Taiwanese medical mission has to leave Malawi, the consequences for these patients could be disastrous.
If the team leaves Mzuzu Hospital, the capacity to provide treatment to people living with HIV/AIDS will decrease sharply and will not be replaced by other Malawian health professionals, despite the fact that the mission has made a point of including local health professionals in the program.
Provision of care, distribution of antiretroviral drugs and monitoring of HIV patients will also decrease.
People living with HIV/AIDS will directly suffer from this development and the risk of resistance to drugs will be increased because of the interruption to their treatment.
There is a possibility that the Taiwanese will be replaced by a Chinese medical team.
In theory this could work, but in reality the new team would have to spend time building trust with local people to understand the sociopolitical situation and to gather sufficient expertise on the local experience of HIV/AIDS. This process would take some time. So, once again, the quality of care, drug distribution and follow-up would be seriously disrupted.
For the sake of the health of Malawians living in the northern part of the country -- and particularly for those who are living with HIV/AIDS -- it is a far better option that the Taiwanese team continue its work at Mzuzu Hospital.
The continued provision of adequate health services to the region will rely on the wisdom of the three governments involved.
Taiwan has to accept the need to continue supporting its medical team at the AIDS clinic even now that Malawi has made China a diplomatic ally.
This would offer conspicuous evidence that Taiwan does not play politics over health.
China, as a responsible state committed to the promotion of sustainable development, should let the Taiwanese team continue pursuing its work, which is important for the development of a country that has high rates of HIV/AIDS.
New health projects could be developed by China in other regions where health access remains limited.
Finally, the Malawian government should understand that if it supports the departure of the Taiwanese medical team, the main victims in this diplomatic shift would be its own people, notably people living with HIV/AIDS in the north.
The question is this: Is it acceptable for a democratic country to sacrifice its own population for political gain?
The health of people living with HIV/AIDS and of people in the northern region of Malawi in general directly depends on the interlinked responses of the three governments.
If any one of them places politics before health, it must be aware that lives will be put in great danger.
Vincent Rollet is a doctoral candidate in the Department of International Relations at the Institute of Political Science in Paris.
"Taiwan has to accept the need to continue supporting its medical team at the AIDS clinic even now that Malawi has made China a diplomatic ally."
Oh really?
Chinese Predators and Local Ennui
China has done it again, buying a Taiwanese ally with a very large sum of money. It is highly regrettable that 42 years of Taiwanese-Malawi relations apparently meant little to a Malawian government in thrall of US$6 billion. And it is laughable that China continues to attack Taiwanese diplomatic interests with not so much as a response from supporters of the cross-strait "status quo" in the US.
This circus was designed to embarrass the Taiwanese government and President Chen Shui-bian (陳水扁) in particular. China signed a memorandum of understanding with Malawi on Dec. 28 in which Malawi said it would adhere to the "one China" principle, but it seems that Malawi was asked to wait until Taiwan's legislative elections were over before announcing the switch -- conveniently, it was also the day Chen embarked on a trip to cement ties with Taiwan's Central American allies.
This is a near replay of July 2002 when Nauru, in a convenient coincidence, announced it would recognize China on the day Chen was sworn in as Democratic Progressive Party (DPP) chairman.
Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou (馬英九) should receive kudos for -- unusually -- speaking with one voice with the DPP government in condemning China's predatory strategy.
However, the KMT is living in a fantasy land of Chinese benevolence judging from his claim yesterday that his "three noes" pledge -- promising no move toward unification or independence and no use of force -- would pave the way for long-term peace in the Taiwan Strait and satisfy Beijing.
In a world of genuine benevolence, Taiwan would have gained international space following the agreement reached between former KMT chairman Lien Chan (連戰) and Chinese President Hu Jintao (胡錦濤) during Lien's visit to China in May 2005.
We're still waiting for any sign of it.
Beijing could also have ended its hunt for Taiwan's allies as a sign of goodwill following KMT Legislator John Chiang's (蔣孝嚴) remarks last August that China would leave the allies alone if Taipei established better relations with Beijing.
In March, two referendums will be held in tandem with the presidential election. One is a DPP-initiated referendum on joining the UN under the name "Taiwan," and the other is a KMT-proposed referendum on "rejoining" the world body using the official name of the Republic of China, or any other "practical" title that would uphold the nation's dignity.
Regardless of which version the public supports, the referendum questions offer Taiwanese a fine opportunity to let the world know that their country wants to be treated with respect and recognized as part of the world community.
If neither referendum passes -- a grave possibility given the KMT's penchant for boycotting plebiscites -- the message would be bleak and difficult to undo: If Taiwanese can't assert themselves and claim a place on the world map, then how can they denounce others for swapping allegiances?
China can and should be criticized for poaching Taiwan's allies, but so should those Taiwanese who can't be bothered to stand up for themselves.
Taipei Times Editorial, January 17, 2008.
This circus was designed to embarrass the Taiwanese government and President Chen Shui-bian (陳水扁) in particular. China signed a memorandum of understanding with Malawi on Dec. 28 in which Malawi said it would adhere to the "one China" principle, but it seems that Malawi was asked to wait until Taiwan's legislative elections were over before announcing the switch -- conveniently, it was also the day Chen embarked on a trip to cement ties with Taiwan's Central American allies.
This is a near replay of July 2002 when Nauru, in a convenient coincidence, announced it would recognize China on the day Chen was sworn in as Democratic Progressive Party (DPP) chairman.
Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou (馬英九) should receive kudos for -- unusually -- speaking with one voice with the DPP government in condemning China's predatory strategy.
However, the KMT is living in a fantasy land of Chinese benevolence judging from his claim yesterday that his "three noes" pledge -- promising no move toward unification or independence and no use of force -- would pave the way for long-term peace in the Taiwan Strait and satisfy Beijing.
In a world of genuine benevolence, Taiwan would have gained international space following the agreement reached between former KMT chairman Lien Chan (連戰) and Chinese President Hu Jintao (胡錦濤) during Lien's visit to China in May 2005.
We're still waiting for any sign of it.
Beijing could also have ended its hunt for Taiwan's allies as a sign of goodwill following KMT Legislator John Chiang's (蔣孝嚴) remarks last August that China would leave the allies alone if Taipei established better relations with Beijing.
In March, two referendums will be held in tandem with the presidential election. One is a DPP-initiated referendum on joining the UN under the name "Taiwan," and the other is a KMT-proposed referendum on "rejoining" the world body using the official name of the Republic of China, or any other "practical" title that would uphold the nation's dignity.
Regardless of which version the public supports, the referendum questions offer Taiwanese a fine opportunity to let the world know that their country wants to be treated with respect and recognized as part of the world community.
If neither referendum passes -- a grave possibility given the KMT's penchant for boycotting plebiscites -- the message would be bleak and difficult to undo: If Taiwanese can't assert themselves and claim a place on the world map, then how can they denounce others for swapping allegiances?
China can and should be criticized for poaching Taiwan's allies, but so should those Taiwanese who can't be bothered to stand up for themselves.
Taipei Times Editorial, January 17, 2008.
Happiness is a Good Job
By Anya Kamenetz of Generation Debt
Gen Debt is notorious for its outsized job expectations. Many of us are looking for an extreme level of passion, fulfillment, creativity, social purpose, and customization from our jobs, along with friendly co-workers and a flexible working environment. And if we don't find what we need right away, we are often all too ready to move on.
The eager poster boy for this attitude is Sean Aiken, a 26-year-old Canadian who decided to tackle the job search in a novel way: He's spending a year working a different job every week, with the goal of finding a position that suits him perfectly.
When I caught up with Aiken in December, his resume looked like this: "Fashion buyer and then photographer in New York City, baker in Brooklyn, pizza maker in Cape Cod, winemaker in Washington State; this week I'll be working in a martial arts studio in Vancouver." This being the 2000s, he has a video blog, he's sponsored by a job Web site, he's staying with strangers using Couchsurfing, and he's even donating his salaries to charity.
Sean has clearly thought a lot about the way young adults look at their jobs, maybe because he has answered so many reporters' questions about the meaning of his mission.
"It's about not settling," he says. "Many people in my generation have higher expectations around the workforce. We're not looking for job security and a high-paying salary. Other things are more important in our decisions: job satisfaction, flexibility, the people you're working with. We're looking for more of a balanced lifestyle, where that line between careers and social lives blurs into one. It's a movement of saying, Hey, I want to be happy."
There are many people out there who think trying to be happy in your job is mostly a pipe dream. Some even seem to find the idea personally offensive. When I wrote about Aiken's mission on my own blog, one headhunter responded, "Part of the eventual downfall of our society will be these punks with this stupid, unfounded sense of entitlement and those who enable them."
Now, perhaps young people who hop from job to job are guilty of being a little flaky, and as a parent I probably wouldn't want to bankroll such explorations indefinitely. But I have trouble understanding exactly why someone would feel so negatively about someone else trying to be happy.
As a Brookings Institution survey of the college Class of 2003 found: "[Young people] place the highest value on making a difference in the work that they do and the chance to learn new skills and do challenging work. Salary ranks at the very bottom of a list of very important considerations as they make decisions about future careers." Does that sound like a terrible worker or a terrible person?
A Good Job Is Hard to Find
What really intrigues me about the trend of youthful idealism is the way it contrasts with young people's actual experience of the changing work world. Workers younger than 30 are the largest and fastest-growing uninsured group in the country -- two out of five recent college graduates go without health coverage.
Gen Debt is also far less likely to have pensions and consists of the least likely workers to belong to a union. The two-thirds of young workers without college degrees dominate the low-wage workforce, occupying half of all minimum-wage jobs and the majority of high-turnover, dead-end service-industry jobs such as barista, waitress, and clerk.
Young people with bachelor's degrees also increasingly spend time in nonstandard work: as unpaid interns, temps, freelancers, contract workers, academic adjuncts, "permatemps," and "permalancers."
The Center for Economic and Policy Research chronicled the declining "good job" in a report by economist John Schmitt, released in November. They defined a "good job" as one that paid at least $17 an hour in 2006 dollars, or $34,000 a year -- the median pay for men in 1979 -- and boasted both a pension and health insurance.
Schmitt found that the share of "good jobs" fell between 1979 and 2006, despite economic growth, mostly because of the decline in benefits. Moreover, "good jobs" declined more sharply in the most recent business cycle than in the previous two business cycles.
It's important to note that the independent workforce is growing quickly and doesn't just consist of young workers but of everyone from working mothers to high-tech specialists to older, semi-retired folks. So, not every independent worker necessarily has a "bad job."
The Bureau of Labor Statistics, in its reports on "alternative employment arrangements," distinguishes between independent contractors and temporary or contingent workers. The former actually earn more than full-time workers on average, while the latter earn less and tend to say that they would rather have a full-time job. The key difference is the ability to negotiate and set your own rates, which of course usually comes with valuable skills and experience.
Getting Real
In some ways, young workers like Sean Aiken are simply reacting to the changing work world by shifting their priorities. Permanent jobs with benefits are scarce, so you can learn to prize independence and flexibility. If the money's not so great, you seek intrinsic rewards.
Getting a graduate degree is another strategy to compete, but it means you must seek an increasingly specialized type of job. And with student loans piling up, the pressure to find the "perfect job" can be economic as well.
I believe it's a good thing that a new generation is bringing new values and attitudes to the workplace. But my view is that a lifetime of job-hopping won't do much to replace bad jobs with good ones. Young workers need to understand their true value in the marketplace and put employers on notice that shortchanging them is not acceptable.
I witnessed a great example of this during the first week of December 2007 in New York City. Viacom, a media industry behemoth that owns MTV, VH1, BET, Comedy Central, Nickelodeon, Logo, and other television networks, classifies reportedly up to half of its writers, animators, producers, editors, Web designers, and other creative talents as freelancers or contract workers. These people work full-time, often for years, alongside regular employees, but with lower salaries and benefits.
Fighting for Your Rights
Just in time for the holiday season, Viacom sharply cut benefits and pay even more for these workers, handing out the information alongside invites to the holiday party. But the permalancers, largely in their 20s and early 30s, didn't take kindly to the coal in their stockings. They walked off the job four days in a row. And they actually won some concessions -- Viacom promised to restore their 401(k)s and original health plan.
Sara Horowitz, the founder of the Freelancers Union, which represents 50,000 independent workers nationwide and is technically the fourth-largest union in New York State, called the Viacom walkout "the beginning of a social movement."
Independence, passion, and work-life balance are all well and good, but young workers shouldn't give up on the old-school rewards our parents looked for when they started out: a living wage, the ability to go to the doctor when you're sick, and some money to put some away for the future. We shouldn't just adjust to the changing workforce -- we should strive to transform it through our own commitment and excellence.
Gen Debt is notorious for its outsized job expectations. Many of us are looking for an extreme level of passion, fulfillment, creativity, social purpose, and customization from our jobs, along with friendly co-workers and a flexible working environment. And if we don't find what we need right away, we are often all too ready to move on.
The eager poster boy for this attitude is Sean Aiken, a 26-year-old Canadian who decided to tackle the job search in a novel way: He's spending a year working a different job every week, with the goal of finding a position that suits him perfectly.
When I caught up with Aiken in December, his resume looked like this: "Fashion buyer and then photographer in New York City, baker in Brooklyn, pizza maker in Cape Cod, winemaker in Washington State; this week I'll be working in a martial arts studio in Vancouver." This being the 2000s, he has a video blog, he's sponsored by a job Web site, he's staying with strangers using Couchsurfing, and he's even donating his salaries to charity.
Sean has clearly thought a lot about the way young adults look at their jobs, maybe because he has answered so many reporters' questions about the meaning of his mission.
"It's about not settling," he says. "Many people in my generation have higher expectations around the workforce. We're not looking for job security and a high-paying salary. Other things are more important in our decisions: job satisfaction, flexibility, the people you're working with. We're looking for more of a balanced lifestyle, where that line between careers and social lives blurs into one. It's a movement of saying, Hey, I want to be happy."
There are many people out there who think trying to be happy in your job is mostly a pipe dream. Some even seem to find the idea personally offensive. When I wrote about Aiken's mission on my own blog, one headhunter responded, "Part of the eventual downfall of our society will be these punks with this stupid, unfounded sense of entitlement and those who enable them."
Now, perhaps young people who hop from job to job are guilty of being a little flaky, and as a parent I probably wouldn't want to bankroll such explorations indefinitely. But I have trouble understanding exactly why someone would feel so negatively about someone else trying to be happy.
As a Brookings Institution survey of the college Class of 2003 found: "[Young people] place the highest value on making a difference in the work that they do and the chance to learn new skills and do challenging work. Salary ranks at the very bottom of a list of very important considerations as they make decisions about future careers." Does that sound like a terrible worker or a terrible person?
A Good Job Is Hard to Find
What really intrigues me about the trend of youthful idealism is the way it contrasts with young people's actual experience of the changing work world. Workers younger than 30 are the largest and fastest-growing uninsured group in the country -- two out of five recent college graduates go without health coverage.
Gen Debt is also far less likely to have pensions and consists of the least likely workers to belong to a union. The two-thirds of young workers without college degrees dominate the low-wage workforce, occupying half of all minimum-wage jobs and the majority of high-turnover, dead-end service-industry jobs such as barista, waitress, and clerk.
Young people with bachelor's degrees also increasingly spend time in nonstandard work: as unpaid interns, temps, freelancers, contract workers, academic adjuncts, "permatemps," and "permalancers."
The Center for Economic and Policy Research chronicled the declining "good job" in a report by economist John Schmitt, released in November. They defined a "good job" as one that paid at least $17 an hour in 2006 dollars, or $34,000 a year -- the median pay for men in 1979 -- and boasted both a pension and health insurance.
Schmitt found that the share of "good jobs" fell between 1979 and 2006, despite economic growth, mostly because of the decline in benefits. Moreover, "good jobs" declined more sharply in the most recent business cycle than in the previous two business cycles.
It's important to note that the independent workforce is growing quickly and doesn't just consist of young workers but of everyone from working mothers to high-tech specialists to older, semi-retired folks. So, not every independent worker necessarily has a "bad job."
The Bureau of Labor Statistics, in its reports on "alternative employment arrangements," distinguishes between independent contractors and temporary or contingent workers. The former actually earn more than full-time workers on average, while the latter earn less and tend to say that they would rather have a full-time job. The key difference is the ability to negotiate and set your own rates, which of course usually comes with valuable skills and experience.
Getting Real
In some ways, young workers like Sean Aiken are simply reacting to the changing work world by shifting their priorities. Permanent jobs with benefits are scarce, so you can learn to prize independence and flexibility. If the money's not so great, you seek intrinsic rewards.
Getting a graduate degree is another strategy to compete, but it means you must seek an increasingly specialized type of job. And with student loans piling up, the pressure to find the "perfect job" can be economic as well.
I believe it's a good thing that a new generation is bringing new values and attitudes to the workplace. But my view is that a lifetime of job-hopping won't do much to replace bad jobs with good ones. Young workers need to understand their true value in the marketplace and put employers on notice that shortchanging them is not acceptable.
I witnessed a great example of this during the first week of December 2007 in New York City. Viacom, a media industry behemoth that owns MTV, VH1, BET, Comedy Central, Nickelodeon, Logo, and other television networks, classifies reportedly up to half of its writers, animators, producers, editors, Web designers, and other creative talents as freelancers or contract workers. These people work full-time, often for years, alongside regular employees, but with lower salaries and benefits.
Fighting for Your Rights
Just in time for the holiday season, Viacom sharply cut benefits and pay even more for these workers, handing out the information alongside invites to the holiday party. But the permalancers, largely in their 20s and early 30s, didn't take kindly to the coal in their stockings. They walked off the job four days in a row. And they actually won some concessions -- Viacom promised to restore their 401(k)s and original health plan.
Sara Horowitz, the founder of the Freelancers Union, which represents 50,000 independent workers nationwide and is technically the fourth-largest union in New York State, called the Viacom walkout "the beginning of a social movement."
Independence, passion, and work-life balance are all well and good, but young workers shouldn't give up on the old-school rewards our parents looked for when they started out: a living wage, the ability to go to the doctor when you're sick, and some money to put some away for the future. We shouldn't just adjust to the changing workforce -- we should strive to transform it through our own commitment and excellence.
2008年1月15日星期二
Whither the DPP?
Even by the day it appears that the Democratic Progressive Party (DPP) is getting deeper into trouble in its campaign to retain the presidency. This is not helped by do-nothing senior members of the party such as Vice President Annette Lu (呂秀蓮) who, true to form, has launched attacks against members of the government instead of rallying around the party flag to salvage something for the March poll.
Lu and a number of other embarrassing party members command an inordinate degree of respect despite their political stupidity and/or laziness.
In this regard the party is all too similar to the Chinese Nationalist Party (KMT), which also seems unable to unload "old guard" freeloaders in its party framework and the legislature.
There was always going to have be a reckoning for the DPP's terrible performance in the legislative elections -- "performance" here referring to the manner in which the campaign was conducted, regardless of any structural disadvantages the party was facing.
The problem is that the DPP lacks a coherent strategy and merit-based hierarchy to do this.
Indeed, the party does not have the remotest idea how to begin to reinvigorate itself for the next legislative poll in 2012, let alone for a presidential election in two months.
Former premier Yu Shyi-kun was DPP chairman for most of President Chen Shui-bian's (陳水扁) second term, a time when the party was in the most desperate need of launching a campaign to engage new voters. But the time he had was utterly wasted. By the time Chen took over, it was clear that the party never appreciated the need to look beyond the green-blue divide and appeal to common interests at the local level.
Instead, it seems to have concentrated on spoils for established figures, such as Legislator Chai Trong-rong (蔡同榮), the former boss of Formosa TV, whose flight from his Chiayi City electorate in the face of a split vote and election as a legislator-at-large typify the mess that the DPP now finds itself in.
Some will argue that the KMT's domination of resources makes any DPP incursion into local politics a futile affair. This is only true if the DPP thinks that local sentiment is not worth fighting for.
If KMT presidential candidate Ma Ying-jeou (馬英九) is elected in March, there will be ample opportunity to critique the policies and competence of a KMT government.
DPP supporters will be disappointed by the public's willingness to reward the boycott of the legislature with an increased majority.
They will wonder why it is that the public could support a party that would threaten to cut off Taiwan Post's budget because it refused to print a stamp designed by a KMT legislator, that would cripple arms spending in the face of a deadly threat from China, and that would shut down the arm of the government that monitors the performance of public servants simply because it could.
The answer is in the party's name: Taiwan is a "democratic" state, and people do not always vote for what candidates consider virtuous.
Party strategists must realize that it cannot mobilize moderate supporters using ideological battles and reliance on White Terror nostalgia at election time -- a fault that was most apparent in its advertising campaign.
In the end the message is clear: The KMT has what it takes to win legislative elections and the DPP does not -- and it may not for many elections to come, assuming, of course, that under a KMT government Taiwan can survive as a sovereign state.
Taipei Times Editorial, January 16, 2008.
Lu and a number of other embarrassing party members command an inordinate degree of respect despite their political stupidity and/or laziness.
In this regard the party is all too similar to the Chinese Nationalist Party (KMT), which also seems unable to unload "old guard" freeloaders in its party framework and the legislature.
There was always going to have be a reckoning for the DPP's terrible performance in the legislative elections -- "performance" here referring to the manner in which the campaign was conducted, regardless of any structural disadvantages the party was facing.
The problem is that the DPP lacks a coherent strategy and merit-based hierarchy to do this.
Indeed, the party does not have the remotest idea how to begin to reinvigorate itself for the next legislative poll in 2012, let alone for a presidential election in two months.
Former premier Yu Shyi-kun was DPP chairman for most of President Chen Shui-bian's (陳水扁) second term, a time when the party was in the most desperate need of launching a campaign to engage new voters. But the time he had was utterly wasted. By the time Chen took over, it was clear that the party never appreciated the need to look beyond the green-blue divide and appeal to common interests at the local level.
Instead, it seems to have concentrated on spoils for established figures, such as Legislator Chai Trong-rong (蔡同榮), the former boss of Formosa TV, whose flight from his Chiayi City electorate in the face of a split vote and election as a legislator-at-large typify the mess that the DPP now finds itself in.
Some will argue that the KMT's domination of resources makes any DPP incursion into local politics a futile affair. This is only true if the DPP thinks that local sentiment is not worth fighting for.
If KMT presidential candidate Ma Ying-jeou (馬英九) is elected in March, there will be ample opportunity to critique the policies and competence of a KMT government.
DPP supporters will be disappointed by the public's willingness to reward the boycott of the legislature with an increased majority.
They will wonder why it is that the public could support a party that would threaten to cut off Taiwan Post's budget because it refused to print a stamp designed by a KMT legislator, that would cripple arms spending in the face of a deadly threat from China, and that would shut down the arm of the government that monitors the performance of public servants simply because it could.
The answer is in the party's name: Taiwan is a "democratic" state, and people do not always vote for what candidates consider virtuous.
Party strategists must realize that it cannot mobilize moderate supporters using ideological battles and reliance on White Terror nostalgia at election time -- a fault that was most apparent in its advertising campaign.
In the end the message is clear: The KMT has what it takes to win legislative elections and the DPP does not -- and it may not for many elections to come, assuming, of course, that under a KMT government Taiwan can survive as a sovereign state.
Taipei Times Editorial, January 16, 2008.
2008年1月13日星期日
Voting for Taiwan's Demise
By Lee Long-hwa
When I was told I should prepare for the Chinese Nationalist Party (KMT) winning the presidential election in March, I acknowledged that it was a possibility. I pointed out that once the KMT takes hold of Taiwan, it would use the nation as a lever, trading sovereignty for some opportunity to get into China.
After all, for the past 50 years, Taiwan has been nothing more to the KMT than a piggy bank and parking space, as the party's dream has always been to return to China.
For the other half of Taiwan, there is no going "back." There is only here. The problem is "here" never seems to be enough. Many Taiwanese long to be part of something bigger, something powerful. This accounts in some way for the strange fascination and appreciation that some have for developments at the hands of the Japanese colonialists -- if they could overlook the death, destruction and cultural genocide the Japanese wrought.
By the same token, some Taiwanese appreciate the KMT dictatorship for the contributions the party had made to the economy and industrial development. However, they do not welcome the prejudice, the racism and the derogatory attitude toward people considered "too Taiwanese" that persists to this day.
So what are we faced with? Two months from the election, and we still don't know what KMT presidential candidate Ma Ying-jeou (馬英九) will do, not "for" but "to" Taiwan. Will he surrender to China? Possibly. Will he fight China? Never. Will he dissect Taiwan, allowing it to be raped slowly by China, in exchange for the KMT scions returning to China as kings and kingmakers, as wealthy owners and directors, setting up a new network of loyal KMT legions?
All of this will be done at the expense of Taiwan. After all, Taiwan is merely a bargaining chip, something to be thrown in as part of some deal -- a deal that may already have been made. For the KMT, Taiwan is not something of value, not a place to stay in, but only a place worth leaving. And with Ma comes the opportunity to finally find a place in the sun in China once again.
Yes, cross-strait tensions will lessen, but only because a Ma administration will have moved toward surrendering Taiwan's sovereignty.
Perhaps the KMT will agree to outlaw the Democratic Progressive Party (DPP).
Perhaps the KMT will use its majority to adopt China's "Anti-Secession" Law in Taiwan and use it to suppress any talk of independence.
Perhaps once again talk of independence will become a crime and DPP members may become targets of arrest.
Taiwan will once again become a one-party town. And it will no longer be Taiwan. It will become Chinese Taipei, an island built around a city.
With the lowering of all barriers to investment in China, Taiwan will lose all of its industry to China and become the Honolulu of China, a mere tourist island, where international fame comes from its betelnut beauties.
For many people, that may be the only job left, after all the high-tech jobs have fled to China.
I don't know if all of these will happen or not. But if Taiwanese were to elect the KMT, giving it a legislative majority and the presidency, they will be voting for their own demise.
When I was told I should prepare for the Chinese Nationalist Party (KMT) winning the presidential election in March, I acknowledged that it was a possibility. I pointed out that once the KMT takes hold of Taiwan, it would use the nation as a lever, trading sovereignty for some opportunity to get into China.
After all, for the past 50 years, Taiwan has been nothing more to the KMT than a piggy bank and parking space, as the party's dream has always been to return to China.
For the other half of Taiwan, there is no going "back." There is only here. The problem is "here" never seems to be enough. Many Taiwanese long to be part of something bigger, something powerful. This accounts in some way for the strange fascination and appreciation that some have for developments at the hands of the Japanese colonialists -- if they could overlook the death, destruction and cultural genocide the Japanese wrought.
By the same token, some Taiwanese appreciate the KMT dictatorship for the contributions the party had made to the economy and industrial development. However, they do not welcome the prejudice, the racism and the derogatory attitude toward people considered "too Taiwanese" that persists to this day.
So what are we faced with? Two months from the election, and we still don't know what KMT presidential candidate Ma Ying-jeou (馬英九) will do, not "for" but "to" Taiwan. Will he surrender to China? Possibly. Will he fight China? Never. Will he dissect Taiwan, allowing it to be raped slowly by China, in exchange for the KMT scions returning to China as kings and kingmakers, as wealthy owners and directors, setting up a new network of loyal KMT legions?
All of this will be done at the expense of Taiwan. After all, Taiwan is merely a bargaining chip, something to be thrown in as part of some deal -- a deal that may already have been made. For the KMT, Taiwan is not something of value, not a place to stay in, but only a place worth leaving. And with Ma comes the opportunity to finally find a place in the sun in China once again.
Yes, cross-strait tensions will lessen, but only because a Ma administration will have moved toward surrendering Taiwan's sovereignty.
Perhaps the KMT will agree to outlaw the Democratic Progressive Party (DPP).
Perhaps the KMT will use its majority to adopt China's "Anti-Secession" Law in Taiwan and use it to suppress any talk of independence.
Perhaps once again talk of independence will become a crime and DPP members may become targets of arrest.
Taiwan will once again become a one-party town. And it will no longer be Taiwan. It will become Chinese Taipei, an island built around a city.
With the lowering of all barriers to investment in China, Taiwan will lose all of its industry to China and become the Honolulu of China, a mere tourist island, where international fame comes from its betelnut beauties.
For many people, that may be the only job left, after all the high-tech jobs have fled to China.
I don't know if all of these will happen or not. But if Taiwanese were to elect the KMT, giving it a legislative majority and the presidency, they will be voting for their own demise.
2008年1月10日星期四
Politicians May Need to Step Back to Go Forward
By Paul Lin 林保華, translated by Anna Stiggelbout
RECENT TV COMMERCIALS by the Chinese Nationalist Party (KMT) make me worry about Taiwan's future. How can it be OK for the KMT to use its party assets to distort facts? It professes to love Taiwan while making it look bad. Its ideology is pro-China and anti-Taiwan.
Look at their claim that the economy is so bad people can't make ends meet. China sees tens of thousands of mass uprisings a year; Taiwan does not. Using a scorched earth tactic, the pan-blue legislative majority blocks the budgets that would develop Taiwan's economy and national security, and then blames the government for being ineffective.
Then they say that Taiwan must therefore unify with China.
Should Taiwan really become a part of China, an empire of lies?
Unfair aspects of the election system were abolished after the authoritarian era ended, such as electoral district divisions and the KMT using its party assets to secure votes. The strong influence the party still has over the judiciary makes the elections extremely difficult for the pro-localization democratic pan-green camp. No matter how hard it tries, it cannot win a legislative majority. It would be a catastrophe for Taiwan if the KMT, which works closely with Beijing, won a two-thirds legislative majority.
The cooperation between the pro-China New Party and the forces in the KMT supporting former chairman Lien Chan's (連戰) call to cooperate with China to prevent Taiwanese independence are signs of China's influence. The huge funds China uses to win over Taiwan's diplomatic allies is clearly aimed at helping the KMT create an image of the government as diplomatically incapable.
Taiwan is the only democratic country in the world that has a presidential candidate like the KMT's Ma Ying-jeou (馬英九), who calls on voters to give up their democratic rights to vote in a referendum.
Is he a fit candidate for a democratic country?
Facing such a grim outlook, the pan-green politicians must consider their options.
To win votes, candidates need to mobilize the public and appeal to moderate voters. But pan-green voters also face the problem of whom to vote for, as pan-green politicians are competing against each other. It's not easy to accumulate enough votes to win a legislative seat, but with candidates attacking each other, tens of thousands of votes are lost to the green camp if one of them loses, and then the legislative seat is lost.
Two years ago, the Democratic Progressive Party won the Kaohsiung mayoral elections by a razor-thin margin, resulting in a year of lawsuits. What if the party had lost those few thousands ballots?
Pan-green politicians competing against each other -- regardless of what party they represent or how well they are doing in polls -- must take the initiative to step back and give their votes and their support to the opposing pan-green candidate. At first this might seem to mean throwing away one's political future, but it will benefit the pan-green camp and all of Taiwan. In any case, it is far more preferable to letting a pro-Chinese party win these seats.
Doing so would create more room for Taiwan and take a candidate out of a difficult situation while showing him or her as open-minded, sensible and democratic, thus creating new possibilities for future elections.
Politicians need to move the public. Whoever steps back to make way for another pan-green candidate will move both his or her own voters and those in other districts, showing them that pan-green politicians truly fight for Taiwan's future and not for themselves or for partisan benefits. Taiwanese will remember a candidate stepping back for the greater good.
Paul Lin is a political commentator based in Taiwan.
RECENT TV COMMERCIALS by the Chinese Nationalist Party (KMT) make me worry about Taiwan's future. How can it be OK for the KMT to use its party assets to distort facts? It professes to love Taiwan while making it look bad. Its ideology is pro-China and anti-Taiwan.
Look at their claim that the economy is so bad people can't make ends meet. China sees tens of thousands of mass uprisings a year; Taiwan does not. Using a scorched earth tactic, the pan-blue legislative majority blocks the budgets that would develop Taiwan's economy and national security, and then blames the government for being ineffective.
Then they say that Taiwan must therefore unify with China.
Should Taiwan really become a part of China, an empire of lies?
Unfair aspects of the election system were abolished after the authoritarian era ended, such as electoral district divisions and the KMT using its party assets to secure votes. The strong influence the party still has over the judiciary makes the elections extremely difficult for the pro-localization democratic pan-green camp. No matter how hard it tries, it cannot win a legislative majority. It would be a catastrophe for Taiwan if the KMT, which works closely with Beijing, won a two-thirds legislative majority.
The cooperation between the pro-China New Party and the forces in the KMT supporting former chairman Lien Chan's (連戰) call to cooperate with China to prevent Taiwanese independence are signs of China's influence. The huge funds China uses to win over Taiwan's diplomatic allies is clearly aimed at helping the KMT create an image of the government as diplomatically incapable.
Taiwan is the only democratic country in the world that has a presidential candidate like the KMT's Ma Ying-jeou (馬英九), who calls on voters to give up their democratic rights to vote in a referendum.
Is he a fit candidate for a democratic country?
Facing such a grim outlook, the pan-green politicians must consider their options.
To win votes, candidates need to mobilize the public and appeal to moderate voters. But pan-green voters also face the problem of whom to vote for, as pan-green politicians are competing against each other. It's not easy to accumulate enough votes to win a legislative seat, but with candidates attacking each other, tens of thousands of votes are lost to the green camp if one of them loses, and then the legislative seat is lost.
Two years ago, the Democratic Progressive Party won the Kaohsiung mayoral elections by a razor-thin margin, resulting in a year of lawsuits. What if the party had lost those few thousands ballots?
Pan-green politicians competing against each other -- regardless of what party they represent or how well they are doing in polls -- must take the initiative to step back and give their votes and their support to the opposing pan-green candidate. At first this might seem to mean throwing away one's political future, but it will benefit the pan-green camp and all of Taiwan. In any case, it is far more preferable to letting a pro-Chinese party win these seats.
Doing so would create more room for Taiwan and take a candidate out of a difficult situation while showing him or her as open-minded, sensible and democratic, thus creating new possibilities for future elections.
Politicians need to move the public. Whoever steps back to make way for another pan-green candidate will move both his or her own voters and those in other districts, showing them that pan-green politicians truly fight for Taiwan's future and not for themselves or for partisan benefits. Taiwanese will remember a candidate stepping back for the greater good.
Paul Lin is a political commentator based in Taiwan.
"Media Slaves" Bow to Their Masters
By Lu Shih-hsiang 盧世祥, translated by Anna Stiggelbout
DURING THE AUTHORITARIAN era, the news media in Taiwan had to fawn on the party-state authorities. Together with educational institutions, the media had to do the dirty work of brainwashing the public to its political ends. To this day many Taiwanese still haven't realized this.
After media censorship was abolished 20 years ago, some were unable to function under normal ethical journalistic standards. They were unable to deal with the true state of affairs and, lost in the democratic era, they continued to mislead the public.
Some politicians allow their public personas to be led by the media and consequently they lose touch with reality. As a result, they are dismissed by the public. These victims of the abnormal media climate could be described as "media slaves."
This kind of behavior is frequently apparent in the latest election race.
In normal democracies, the media report the truth, explain the news, determine which issues are important and reflect public opinion. Politicians in such an environment cannot easily ignore the media.
In Taiwan, however, apart from a few exceptions, the media often publish untrue reports, run subjective commentary and distort public opinion with skewed opinion polls. For example, if media opinion polls were to be believed, the winner of the Kaohsiung mayoral election in December 2006 would have been Chinese Nationalist Party (KMT) candidate Huang Chun-ying (黃俊英), not Democratic Progressive Party (DPP) candidate Chen Chu (陳菊). The only exception was the Liberty Times (the Taipei Times' sister paper).
In the current media environment, politicians looking to the media for guidance on how to govern the country will suffer the political consequences. If they believe everything they see in the media, the damage will be even greater.
It is worth noting that political intervention by Taiwan's media has been increasing in recent years. In addition to the politicization of all news, all criticism is based on political position and ideology. The result is a polarization of media outlets that protect those they favor and working against those they don't. Thus, the Taiwanese media have created a number of media darlings and an even greater number of "media slaves." However, because media standards are seriously slanted, those who are made to look good by the media have no reason to congratulate themselves, and those attacked by them could feel persecuted. Unfortunately, few people are able to see through these media tricks.
Fame and glory are often hard to resist. Even political leaders who have held high office, prominent individuals in the private sector and academics who consider themselves above political wrangling can't avoid falling into this self-delusional trap.
Because Taiwanese media remain under the control of proponents of "one China," many media darlings are pan-blue politicians.
If they suit the media's tastes, pro-localization politicians can also win their favor. But for them, it is still as Mencius (孟子) said: Those whom Zhao Meng (趙孟) promote, he can also demote. If the media do not profit from favoring a certain politician, their halo can be removed overnight, leaving a media slave with nothing.
There are many of these media slaves in the pan-green camp. The weakness they have in common is a tendency to make sensational statements. In their competition for media attention, they often end up targeting their own camp to gain a reputation as reformers while labeling those of other opinions reactionaries or corrupt. Examples in recent years include former DPP chairmen Hsu Hsin-liang (許信良) and Shih Ming-teh (施明德), former DPP legislator Shen Fu-hsiung (沈富雄) and some of the members of the party's New Tide faction. All were influenced by the blue-leaning media.
These people were often given a lot of exposure and were made to look good by certain media outlets, but their political possibilities kept decreasing.
Some pro-green academics who sympathized with the red-clad anti-corruption protesters that shook up Taiwan in 2006 also belonged to this group. Some fell into the trap of mistaking the lies of certain media for the truth and empty reputation for reality.
These media, however, have left fact and public opinion behind.
Those who are manipulated by the media or try to use them don't have a grip on what the public wants and will continue to sink ever lower, together with the media.
Lu Shih-hsiang is an adviser to the Taipei Times.
DURING THE AUTHORITARIAN era, the news media in Taiwan had to fawn on the party-state authorities. Together with educational institutions, the media had to do the dirty work of brainwashing the public to its political ends. To this day many Taiwanese still haven't realized this.
After media censorship was abolished 20 years ago, some were unable to function under normal ethical journalistic standards. They were unable to deal with the true state of affairs and, lost in the democratic era, they continued to mislead the public.
Some politicians allow their public personas to be led by the media and consequently they lose touch with reality. As a result, they are dismissed by the public. These victims of the abnormal media climate could be described as "media slaves."
This kind of behavior is frequently apparent in the latest election race.
In normal democracies, the media report the truth, explain the news, determine which issues are important and reflect public opinion. Politicians in such an environment cannot easily ignore the media.
In Taiwan, however, apart from a few exceptions, the media often publish untrue reports, run subjective commentary and distort public opinion with skewed opinion polls. For example, if media opinion polls were to be believed, the winner of the Kaohsiung mayoral election in December 2006 would have been Chinese Nationalist Party (KMT) candidate Huang Chun-ying (黃俊英), not Democratic Progressive Party (DPP) candidate Chen Chu (陳菊). The only exception was the Liberty Times (the Taipei Times' sister paper).
In the current media environment, politicians looking to the media for guidance on how to govern the country will suffer the political consequences. If they believe everything they see in the media, the damage will be even greater.
It is worth noting that political intervention by Taiwan's media has been increasing in recent years. In addition to the politicization of all news, all criticism is based on political position and ideology. The result is a polarization of media outlets that protect those they favor and working against those they don't. Thus, the Taiwanese media have created a number of media darlings and an even greater number of "media slaves." However, because media standards are seriously slanted, those who are made to look good by the media have no reason to congratulate themselves, and those attacked by them could feel persecuted. Unfortunately, few people are able to see through these media tricks.
Fame and glory are often hard to resist. Even political leaders who have held high office, prominent individuals in the private sector and academics who consider themselves above political wrangling can't avoid falling into this self-delusional trap.
Because Taiwanese media remain under the control of proponents of "one China," many media darlings are pan-blue politicians.
If they suit the media's tastes, pro-localization politicians can also win their favor. But for them, it is still as Mencius (孟子) said: Those whom Zhao Meng (趙孟) promote, he can also demote. If the media do not profit from favoring a certain politician, their halo can be removed overnight, leaving a media slave with nothing.
There are many of these media slaves in the pan-green camp. The weakness they have in common is a tendency to make sensational statements. In their competition for media attention, they often end up targeting their own camp to gain a reputation as reformers while labeling those of other opinions reactionaries or corrupt. Examples in recent years include former DPP chairmen Hsu Hsin-liang (許信良) and Shih Ming-teh (施明德), former DPP legislator Shen Fu-hsiung (沈富雄) and some of the members of the party's New Tide faction. All were influenced by the blue-leaning media.
These people were often given a lot of exposure and were made to look good by certain media outlets, but their political possibilities kept decreasing.
Some pro-green academics who sympathized with the red-clad anti-corruption protesters that shook up Taiwan in 2006 also belonged to this group. Some fell into the trap of mistaking the lies of certain media for the truth and empty reputation for reality.
These media, however, have left fact and public opinion behind.
Those who are manipulated by the media or try to use them don't have a grip on what the public wants and will continue to sink ever lower, together with the media.
Lu Shih-hsiang is an adviser to the Taipei Times.
Rejecting the Tools of Democracy
After undertaking months' campaign to collect 1 million signatures endorsing its proposed referendum, the Chinese Nationalist Party (KMT) had a sudden change of heart two weeks prior to election day and asked voters to boycott tomorrow's referendums -- including its own.
Making the decision during the KMT Central Standing Committee, the party justified its position by arguing that the "referendums have been twisted and kidnapped by the Democratic Progressive Party [DPP] to be used as a tool to provoke conflict."
KMT Chairman Wu Poh-hsiung (吳伯雄) added that the party had not ruled out boycotting the two UN-membership referendums -- one by the DPP to join the UN using the name "Taiwan" and the other by the KMT to "return" to the UN using the nation's official title, "Republic of China" -- that are scheduled to be held on March 22 in tandem with the presidential election.
It is dumbfounding how easy it is for the KMT, in today's democratic Taiwan, to disregard the voices of millions in such a casual way: The opinions of a few Central Standing Committee members have effortlessly overruled the collective opinion of more than 1 million petitioners.
Taiwan has come a long way from the days of authoritarian rule. No direct presidential election was allowed and freedom of speech and the press was a pipe dream. Today, people can freely exercise their rights without fear that they could be dragged out of their beds in the middle of the night and disappear.
Some trumpet participation in referendums as the "people's right." But a closer look shows it would be more precise to say that it is the "people's privilege," because not every country practices direct democracy. With this is mind, anyone who is a proud Taiwanese should not easily abandon that special privilege by forsaking their referendum ballots.
It is not that surprising to hear calls from the KMT to boycott the referendums. After all, it was the pan-blue camp's actions that resulted in the "bird cage" version of the Referendum Law (公民投票法), which resorts to technicalities to restrict the use of referendums, depriving Taiwanese of greater democratic power.
But anyone who respects the country's democratic pioneers and feels a sense of responsibility in defending the country's hard-won democracy should not allow themselves to be intoxicated by the KMT's anti-democratic rhetoric.
Two referendums will be held tomorrow -- one initiated by the DPP on recovering assets stolen by the KMT, and the other proposed by the KMT to empower the legislature to investigate misconduct of senior government officials and their families.
Whether individuals agree or disagree with the questions addressed in the two referendums, they should cast their referendum ballots tomorrow and make their voices heard.
Taking part in a referendum is a privilege but also an obligation from which each citizen of a democracy should draw pride.
The boycott proposal is not only an insult to voters, but also harmful to the nation's effort to consolidate democracy.
Taipei Times Editorial, January 11, 2008.
Making the decision during the KMT Central Standing Committee, the party justified its position by arguing that the "referendums have been twisted and kidnapped by the Democratic Progressive Party [DPP] to be used as a tool to provoke conflict."
KMT Chairman Wu Poh-hsiung (吳伯雄) added that the party had not ruled out boycotting the two UN-membership referendums -- one by the DPP to join the UN using the name "Taiwan" and the other by the KMT to "return" to the UN using the nation's official title, "Republic of China" -- that are scheduled to be held on March 22 in tandem with the presidential election.
It is dumbfounding how easy it is for the KMT, in today's democratic Taiwan, to disregard the voices of millions in such a casual way: The opinions of a few Central Standing Committee members have effortlessly overruled the collective opinion of more than 1 million petitioners.
Taiwan has come a long way from the days of authoritarian rule. No direct presidential election was allowed and freedom of speech and the press was a pipe dream. Today, people can freely exercise their rights without fear that they could be dragged out of their beds in the middle of the night and disappear.
Some trumpet participation in referendums as the "people's right." But a closer look shows it would be more precise to say that it is the "people's privilege," because not every country practices direct democracy. With this is mind, anyone who is a proud Taiwanese should not easily abandon that special privilege by forsaking their referendum ballots.
It is not that surprising to hear calls from the KMT to boycott the referendums. After all, it was the pan-blue camp's actions that resulted in the "bird cage" version of the Referendum Law (公民投票法), which resorts to technicalities to restrict the use of referendums, depriving Taiwanese of greater democratic power.
But anyone who respects the country's democratic pioneers and feels a sense of responsibility in defending the country's hard-won democracy should not allow themselves to be intoxicated by the KMT's anti-democratic rhetoric.
Two referendums will be held tomorrow -- one initiated by the DPP on recovering assets stolen by the KMT, and the other proposed by the KMT to empower the legislature to investigate misconduct of senior government officials and their families.
Whether individuals agree or disagree with the questions addressed in the two referendums, they should cast their referendum ballots tomorrow and make their voices heard.
Taking part in a referendum is a privilege but also an obligation from which each citizen of a democracy should draw pride.
The boycott proposal is not only an insult to voters, but also harmful to the nation's effort to consolidate democracy.
Taipei Times Editorial, January 11, 2008.
2008年1月9日星期三
Taiwan Needs a Green Legislature
By Jerome Keating
WHEN TAIWAN WAS a one-party state dictatorship under the Chinese Nationalist Party (KMT), the power of the country was in its president.
The Legislative Yuan was a rubber stamp body in which each legislator who had been elected back in 1947 was guaranteed his position for life. The only thing legislators had to do was approve what dictator Chiang Kai-shek (蔣介石) and later what his son, former president Chiang Ching-kuo (蔣經國), directed.
This all began to change under former president Lee Teng-hui (李登輝) when the "iron rice bowl" legislators who had not yet died had to step down. After 1992 legislators had to run for office and compete with members of other newly allowed parties.
In 1996, another major change happened in Taiwan. The president, like members of the Legislative Yuan, had to be elected by the public. At this point the balance of power in Taiwan began to shift from the presidency to the Legislative Yuan.
This is the way it is today. The legislature creates laws, controls budgets and confirms emergency orders. It can tell the Executive Yuan to change its policies, it can amend the Constitution and it can settle disputes in matters of self-governance of special municipalities, counties, cities and other administrative units. It can also paralyze the country.
The KMT and its pan-blue alliance have always controlled the Legislative Yuan -- from the rubber stamp days of the Chiangs through today. They use it to promote their own agenda and not that of the public. Whatever smoke and mirrors the pan-blue media fabricates to make it seem like today's problems are the result of the presidency, the reality is that the majority of the problems lay at the door of the pan-blue legislature.
One serious problem is the injustice of not having a level playing field for all political parties in Taiwan. The residue of the past one-party state rule is that the KMT still owns the majority of the state assets left over from the Japanese colonial era.
By its own declaration, the KMT admits to resources in excess of US$750 million. This declaration does not include those state assets that have already been siphoned off to the KMT leadership.
All other parties in Taiwan, blue or green, do not have a combined total of US$1 million in assets.
The KMT uses the assets for its own self-aggrandizement and ends: It can out-advertise, out-spend and out-promote any and all of the other parties. This injustice can never be righted as long as the KMT controls the majority in the Legislative Yuan.
The KMT has repeatedly blocked the people of Taiwan from regaining what belongs to them. In the upcoming elections, the KMT is telling its members to boycott a referendum on its ill-gotten assets. The pan-blue dominated legislature must go before Taiwan can be truly democratic.
In addition to a need for justice, the KMT-led pan-blue Legislative Yuan has sabotaged the country, forcing it into paralysis as it strives to regain its lost privilege.
The KMT would rather see Taiwan flounder than lose its legislative privilege and thus its assets and benefits. Even the crass, bottom-line motivation behind the KMT's goal of unification is more because of personal profit than a warped ideology. If the KMT is voted out in Taiwan, ultimately its leaders would gamble they could ingratiate themselves with the controlling cabal of China.
Their hope would be that by offering Taiwan as a sacrificial lamb they would be feted as heroes and allowed to maintain their privilege as governors of the island. Better to be a Puyi governor appointed by China than to continually risk being a loser in a free election in a democratic state. Note the sniveling way that Lien Chan (連戰) and James Soong (宋楚瑜) -- two-time losers and once long-time enemies of the PRC -- went back to China to be feted after they lost in the last presidential election.
Need other examples of the KMT's sabotage? Examine how the do-nothing legislature blocked the country's arms budget for three years and only finally passed it just before last year's session ended.
Rather than see anything positive happen under President Chen Shui-bian (陳水扁), they prefer to weaken the country, blocking budgets and appointments to the Control Yuan. In this way, the anti-corruption watchdog of the country would be ineffectual.
Look at the legislative elections. The KMT caused an uproar to protest the Central Election Committee (CEC) ruling for a one-step voting procedure. Many suspect the KMT wanted a two-step procedure so that they could measure how effective bribes were concerning the referendum ballots.
If the KMT paid a voter to oppose the referendum for recovering state assets, the best way to know if the person followed through would be to see if he or she picked up the ballot. If people accept a ballot after getting a bribe, the KMT could wonder why they did so. With a ballot in hand, a person could still secretly vote in favor of the referendum.
Facing a confrontation with the CEC and legal action, the KMT finally accepted a compromise, but almost immediately afterwards, the KMT did an about-face and told its constituents to boycott the referendums.
This exposed the KMT's true intent. Their original referendum on rooting out corruption was a smokescreen to match the green referendum on state assets and the KMT abandoned it without compunction.
The ruckus they raised over the voting procedure was a farce. What they were really after was to stop the state assets referendum.
I do not mean to say that green legislators and officials are free of corruption. Many dogs have learned from the wolves and are driven by the same greed and a system of favors that masks corruption. They too must be weeded out.
But first the playing field must be leveled; the state assets must be properly in the hands of the state and not one political party. Taiwan must get rid of politicians who serve their party to the detriment of the nation.
Level the playing field and progress will follow.
Jerome Keating is a Taiwan-based writer.
WHEN TAIWAN WAS a one-party state dictatorship under the Chinese Nationalist Party (KMT), the power of the country was in its president.
The Legislative Yuan was a rubber stamp body in which each legislator who had been elected back in 1947 was guaranteed his position for life. The only thing legislators had to do was approve what dictator Chiang Kai-shek (蔣介石) and later what his son, former president Chiang Ching-kuo (蔣經國), directed.
This all began to change under former president Lee Teng-hui (李登輝) when the "iron rice bowl" legislators who had not yet died had to step down. After 1992 legislators had to run for office and compete with members of other newly allowed parties.
In 1996, another major change happened in Taiwan. The president, like members of the Legislative Yuan, had to be elected by the public. At this point the balance of power in Taiwan began to shift from the presidency to the Legislative Yuan.
This is the way it is today. The legislature creates laws, controls budgets and confirms emergency orders. It can tell the Executive Yuan to change its policies, it can amend the Constitution and it can settle disputes in matters of self-governance of special municipalities, counties, cities and other administrative units. It can also paralyze the country.
The KMT and its pan-blue alliance have always controlled the Legislative Yuan -- from the rubber stamp days of the Chiangs through today. They use it to promote their own agenda and not that of the public. Whatever smoke and mirrors the pan-blue media fabricates to make it seem like today's problems are the result of the presidency, the reality is that the majority of the problems lay at the door of the pan-blue legislature.
One serious problem is the injustice of not having a level playing field for all political parties in Taiwan. The residue of the past one-party state rule is that the KMT still owns the majority of the state assets left over from the Japanese colonial era.
By its own declaration, the KMT admits to resources in excess of US$750 million. This declaration does not include those state assets that have already been siphoned off to the KMT leadership.
All other parties in Taiwan, blue or green, do not have a combined total of US$1 million in assets.
The KMT uses the assets for its own self-aggrandizement and ends: It can out-advertise, out-spend and out-promote any and all of the other parties. This injustice can never be righted as long as the KMT controls the majority in the Legislative Yuan.
The KMT has repeatedly blocked the people of Taiwan from regaining what belongs to them. In the upcoming elections, the KMT is telling its members to boycott a referendum on its ill-gotten assets. The pan-blue dominated legislature must go before Taiwan can be truly democratic.
In addition to a need for justice, the KMT-led pan-blue Legislative Yuan has sabotaged the country, forcing it into paralysis as it strives to regain its lost privilege.
The KMT would rather see Taiwan flounder than lose its legislative privilege and thus its assets and benefits. Even the crass, bottom-line motivation behind the KMT's goal of unification is more because of personal profit than a warped ideology. If the KMT is voted out in Taiwan, ultimately its leaders would gamble they could ingratiate themselves with the controlling cabal of China.
Their hope would be that by offering Taiwan as a sacrificial lamb they would be feted as heroes and allowed to maintain their privilege as governors of the island. Better to be a Puyi governor appointed by China than to continually risk being a loser in a free election in a democratic state. Note the sniveling way that Lien Chan (連戰) and James Soong (宋楚瑜) -- two-time losers and once long-time enemies of the PRC -- went back to China to be feted after they lost in the last presidential election.
Need other examples of the KMT's sabotage? Examine how the do-nothing legislature blocked the country's arms budget for three years and only finally passed it just before last year's session ended.
Rather than see anything positive happen under President Chen Shui-bian (陳水扁), they prefer to weaken the country, blocking budgets and appointments to the Control Yuan. In this way, the anti-corruption watchdog of the country would be ineffectual.
Look at the legislative elections. The KMT caused an uproar to protest the Central Election Committee (CEC) ruling for a one-step voting procedure. Many suspect the KMT wanted a two-step procedure so that they could measure how effective bribes were concerning the referendum ballots.
If the KMT paid a voter to oppose the referendum for recovering state assets, the best way to know if the person followed through would be to see if he or she picked up the ballot. If people accept a ballot after getting a bribe, the KMT could wonder why they did so. With a ballot in hand, a person could still secretly vote in favor of the referendum.
Facing a confrontation with the CEC and legal action, the KMT finally accepted a compromise, but almost immediately afterwards, the KMT did an about-face and told its constituents to boycott the referendums.
This exposed the KMT's true intent. Their original referendum on rooting out corruption was a smokescreen to match the green referendum on state assets and the KMT abandoned it without compunction.
The ruckus they raised over the voting procedure was a farce. What they were really after was to stop the state assets referendum.
I do not mean to say that green legislators and officials are free of corruption. Many dogs have learned from the wolves and are driven by the same greed and a system of favors that masks corruption. They too must be weeded out.
But first the playing field must be leveled; the state assets must be properly in the hands of the state and not one political party. Taiwan must get rid of politicians who serve their party to the detriment of the nation.
Level the playing field and progress will follow.
Jerome Keating is a Taiwan-based writer.
Just What the KMT Mean by "Scared"?
By Lien Chan 林洽
THE CHINESE NATIONALIST Party (KMT) has accused the Democratic Progressive Party of hijacking what it calls "the sacred referendums" to mess up the elections, and is therefore urging voters not to vote in the referendums so as not to "destroy" the elections.
The KMT's statement is based on a strange logic.
If a loved one is kidnapped or hurt, we should try to save and protect them, not abandon them. If a sacred and precious belief is being hijacked, we should try to realize it and implement it, not discard it.
Holding referendums concurrently with elections is common in many countries.
In theory, this is considered favorable to maintaining ballot secrecy.
Not only that, but from a more academic perspective, cost sharing can create "spillover" effects, or, to put it more plainly, the elections and referendums can benefit each other by being held on the same day.
To voters, the cost of voting is the time spent. This is an obstacle inherent to democracy.
The cost of the referendum is not just the few hundred million NT dollars spent on administering the elections. The real cost of the elections should be calculated with Taiwan's GDP in mind.
The daily production value created by the public is NT$48.8 billion, or about NT$6 billion per hour.
From this perspective, the cost of voters taking time out to vote is astronomical.
To have time for the polls, people have to sacrifice their work or their leisure time. Helping them save time will increase their willingness to vote.
Thus combining elections, saving time and promoting democracy are three compatible concepts.
Combining the referendums and the legislative elections is good for both the ballots.
If the KMT really believes that the referendum institution is sacred, it should approve of attempts to save voters' time and protect ballot secrecy.
Only political parties that are opposed to the full and free expression of public opinion would worry about "one election hijacking another," only a party relying on money to mobilize voters for the legislative elections would tell supporters to forgo voting in the referendums and only a party with nominees whose interests stand in stark contrast to the referendums would accuse another party of using them to hijack elections.
When the KMT says that the referendums are sacred but refuses to vote in them, it is in fact revealing the true face of its presidential candidate, Ma Ying-jeou (馬英九).
If the KMT has nothing to hide when it comes to its party assets, or if they support Taiwan's democracy, the party should stand up and convince the public to vote "no" to recovering the party's inappropriately obtained assets.
Instead, the party rejects the referendums altogether, rather than defending itself and justifying its party assets, thus compounding a bad deed by also denying what they claim to hold sacred.
By rejecting the referendums, the KMT is also sacrificing its own anti-corruption referendum. In its attempt to protect its ill-gotten party assets, the KMT has demonstrated to the public the insincerity with which it called for the referendum.
Paraphrasing what has by now become a well-known statement by Ma, I would like to tell the members of the KMT that I see you as human beings, as Taiwanese and I will educate you: The sacred referendums should be carried out and unjustly obtained party assets should be returned.
Lin Chia is a political commentator in Taipei.
THE CHINESE NATIONALIST Party (KMT) has accused the Democratic Progressive Party of hijacking what it calls "the sacred referendums" to mess up the elections, and is therefore urging voters not to vote in the referendums so as not to "destroy" the elections.
The KMT's statement is based on a strange logic.
If a loved one is kidnapped or hurt, we should try to save and protect them, not abandon them. If a sacred and precious belief is being hijacked, we should try to realize it and implement it, not discard it.
Holding referendums concurrently with elections is common in many countries.
In theory, this is considered favorable to maintaining ballot secrecy.
Not only that, but from a more academic perspective, cost sharing can create "spillover" effects, or, to put it more plainly, the elections and referendums can benefit each other by being held on the same day.
To voters, the cost of voting is the time spent. This is an obstacle inherent to democracy.
The cost of the referendum is not just the few hundred million NT dollars spent on administering the elections. The real cost of the elections should be calculated with Taiwan's GDP in mind.
The daily production value created by the public is NT$48.8 billion, or about NT$6 billion per hour.
From this perspective, the cost of voters taking time out to vote is astronomical.
To have time for the polls, people have to sacrifice their work or their leisure time. Helping them save time will increase their willingness to vote.
Thus combining elections, saving time and promoting democracy are three compatible concepts.
Combining the referendums and the legislative elections is good for both the ballots.
If the KMT really believes that the referendum institution is sacred, it should approve of attempts to save voters' time and protect ballot secrecy.
Only political parties that are opposed to the full and free expression of public opinion would worry about "one election hijacking another," only a party relying on money to mobilize voters for the legislative elections would tell supporters to forgo voting in the referendums and only a party with nominees whose interests stand in stark contrast to the referendums would accuse another party of using them to hijack elections.
When the KMT says that the referendums are sacred but refuses to vote in them, it is in fact revealing the true face of its presidential candidate, Ma Ying-jeou (馬英九).
If the KMT has nothing to hide when it comes to its party assets, or if they support Taiwan's democracy, the party should stand up and convince the public to vote "no" to recovering the party's inappropriately obtained assets.
Instead, the party rejects the referendums altogether, rather than defending itself and justifying its party assets, thus compounding a bad deed by also denying what they claim to hold sacred.
By rejecting the referendums, the KMT is also sacrificing its own anti-corruption referendum. In its attempt to protect its ill-gotten party assets, the KMT has demonstrated to the public the insincerity with which it called for the referendum.
Paraphrasing what has by now become a well-known statement by Ma, I would like to tell the members of the KMT that I see you as human beings, as Taiwanese and I will educate you: The sacred referendums should be carried out and unjustly obtained party assets should be returned.
Lin Chia is a political commentator in Taipei.
China Makes Another Miscalculation
Minister of Foreign Affairs James Huang (黃志芳) returned to Taiwan on Tuesday following his unsuccessful last-ditch mission to save diplomatic ties with Malawi.
Malawi's refusal to receive Huang means a switch of recognition to China now looks inevitable and it will mark the latest strike in Beijing's war of attrition to win the allegiance of the nation's allies.
But one could argue that -- when it is made official -- neither China nor Malawi will prosper, as neither China's geopolitical ambitions nor the plight of the citizens of Malawi will be advanced from the establishment of relations.
Apart from the opportunity to further decrease Taiwan's international space and reduce its number of allies, China's other reason for courting African countries is to secure access to the globe's diminishing natural resources, vital if it is to keep its burgeoning economy ticking over and its massive population pacified. In this respect Malawi, with its unexploited deposits of uranium and bauxite, is a useful acquisition.
Beijing reportedly offered the government of Malawi a financial package totaling US$6 billion in return for breaking ties with Taipei and it is understandable that a poverty-stricken nation like Malawi would be tempted by such a generous offer, given that its annual GDP stands at around US$7 billion. It is unlikely, however, that any of this cash will trickle down to the Malawian population and past experience has shown they will not receive the same medical, agricultural and technical help from Beijing as they have from Taipei's missions.
Many other African countries, such as Angola, Mozambique and Sudan, have given China's unfettered access to their natural resources in return for cash, construction projects and economic development, but more often than not the results fail to live up to the promises.
Human rights activists and foreign aid workers in these countries have voiced concerns that, like European nations before them, China's involvement in Africa often only serves to enrich the continent's already corrupt leaders. BBC reports have also detailed how Chinese construction firms bring in Chinese workers because they are unwilling to train the locals and impart vital skills to the Africans. Peasant Chinese farmers are even being sent to work the African land in an attempt to relieve pressure on land in China. In some cases, locals allege that prisoners are being imported to do hard labor.
This has led African activists to question China's motives and has generated accusations of a new era of imperialism.
Ministry officials expect Malawi to announce its decision to recognize China within the next few days, just in time for Saturday's legislative election -- chosen by Beijing to cause maximum embarrassment to the government.
But China should have learned from its previous ham-fisted attempts -- both direct and indirect -- to meddle in Taiwan's elections, that intervention has the opposite effect, producing a galvanizing effect on large sections of the Taiwanese population. The more China attacks, the more people come to detest its belligerent bullying.
In contrast to viewing the latest loss of an ally as an indication of Taiwan's weakness and another step on the road to international obscurity, people will view it as China's latest insult to Taiwan's sovereignty.
Losing one more ally to China does not really do that much harm to Taiwan's interests, but it makes Beijing's job of achieving its dream of "eventual unification" that much harder.
Taipei Times Editorial, January 10, 2008.
Malawi's refusal to receive Huang means a switch of recognition to China now looks inevitable and it will mark the latest strike in Beijing's war of attrition to win the allegiance of the nation's allies.
But one could argue that -- when it is made official -- neither China nor Malawi will prosper, as neither China's geopolitical ambitions nor the plight of the citizens of Malawi will be advanced from the establishment of relations.
Apart from the opportunity to further decrease Taiwan's international space and reduce its number of allies, China's other reason for courting African countries is to secure access to the globe's diminishing natural resources, vital if it is to keep its burgeoning economy ticking over and its massive population pacified. In this respect Malawi, with its unexploited deposits of uranium and bauxite, is a useful acquisition.
Beijing reportedly offered the government of Malawi a financial package totaling US$6 billion in return for breaking ties with Taipei and it is understandable that a poverty-stricken nation like Malawi would be tempted by such a generous offer, given that its annual GDP stands at around US$7 billion. It is unlikely, however, that any of this cash will trickle down to the Malawian population and past experience has shown they will not receive the same medical, agricultural and technical help from Beijing as they have from Taipei's missions.
Many other African countries, such as Angola, Mozambique and Sudan, have given China's unfettered access to their natural resources in return for cash, construction projects and economic development, but more often than not the results fail to live up to the promises.
Human rights activists and foreign aid workers in these countries have voiced concerns that, like European nations before them, China's involvement in Africa often only serves to enrich the continent's already corrupt leaders. BBC reports have also detailed how Chinese construction firms bring in Chinese workers because they are unwilling to train the locals and impart vital skills to the Africans. Peasant Chinese farmers are even being sent to work the African land in an attempt to relieve pressure on land in China. In some cases, locals allege that prisoners are being imported to do hard labor.
This has led African activists to question China's motives and has generated accusations of a new era of imperialism.
Ministry officials expect Malawi to announce its decision to recognize China within the next few days, just in time for Saturday's legislative election -- chosen by Beijing to cause maximum embarrassment to the government.
But China should have learned from its previous ham-fisted attempts -- both direct and indirect -- to meddle in Taiwan's elections, that intervention has the opposite effect, producing a galvanizing effect on large sections of the Taiwanese population. The more China attacks, the more people come to detest its belligerent bullying.
In contrast to viewing the latest loss of an ally as an indication of Taiwan's weakness and another step on the road to international obscurity, people will view it as China's latest insult to Taiwan's sovereignty.
Losing one more ally to China does not really do that much harm to Taiwan's interests, but it makes Beijing's job of achieving its dream of "eventual unification" that much harder.
Taipei Times Editorial, January 10, 2008.
2008年1月7日星期一
Economy, Geopolitics Guide Oil Price
Why are oil prices rising when the situation in Iraq seems to be improving, tensions with Iran appear to be easing and a mild late winter is expected in the US?
Now that the price of crude oil has crossed the psychologically important US$100-a-barrel threshold, and then retreated, what direction will it take next?
Many experts say it will go up, then down, and then maybe up again. That, anyway, has been the pattern of the last several years of volatile prices.
The arguments for even higher oil prices are well known. The economies of China and India are booming and hungry for energy. Oil fields in Mexico and the US are drying up, tightening world supplies. Venezuelan President Hugo Chavez is using oil as a political weapon. Rebels in Nigeria are creating havoc in some of Africa's most productive oil fields.
The war in Iraq rages on. The dollar is weakening, causing hedge funds and traders to flee to oil and other commodities as a safe haven.
But all those factors were in play last summer when the price fell to about US$60 a barrel, before it rallied at the end of the year. The price touched US$100 on Wednesday and surpassed that briefly on Thursday before retreating after the US government reported higher-than-expected heating oil and gasoline supplies. The price settled at US$99.18 a barrel, down 44 cents.
"Predicting oil prices continually demonstrates the perils of prophecy, because oil prices are the derivative of what happens in the global economy and global geopolitics," said Daniel Yergin, chairman of Cambridge Energy Research Associates. Yergin said he could foresee oil prices surging as high as US$150 in the next few years or falling as low as US$40.
John Richels, president of the Devon Energy Corp, an international oil and gas company based in Oklahoma City, said US$150 a barrel was possible, but so was US$55.
"We have to make investments based on our outlook over a long period of time," he said. "It is tough."
Central to the question of where oil prices will go is the effect of high prices on the consumption and development of alternative fuels.
Large amounts of public and private investment are going into solar, wind and biofuel development, but so far they are making only a slight contribution to energy supplies. Scientific and engineering leaps, like developing the atomic bomb or sending a man to the moon, can be made relatively quickly, but they are still measured in years.
Until now, most economists have been surprised that the steady rise in oil prices -- from as low as US$11 less than a decade ago -- has not had a greater effect on US consumers. But with oil prices rising at an increasingly rapid rate over the last few months in conjunction with the housing market slump and credit squeeze, many economists wonder whether oil prices could tip the economy into a recession.
A recession, of course, would curb oil demand. That would push oil prices right back down again, or so the theory goes, as fewer consumers drive to the mall, companies produce and ship less and world trade slows.
"If we are slowing down, we will not be buying as much goods from China and services from India," said Addison Armstrong, director for market research at Tradition Energy, an energy broker that deals with banks and hedge funds.
"My forecast for 2008 is that crude prices will average US$75 a barrel, and that is based on a scenario of a slowing economy in the United States," he said.
But Armstrong and other experts cautioned that a protracted insurgency in Nigeria, a punishing hurricane season or other unpredictable events could take oil prices up.
So why are oil prices going up now? The military situation in Iraq is arguably improving, and Iraqi oil exports are beginning to flow again. Tensions with Iran have eased a bit. There are forecasts for a mild late winter in the US, which should help bolster oil and gasoline inventories going into the spring and summer driving season.
Many experts say the answer lies in the investment decisions of traders and hedge funds. With the markets in equities, housing, credit and currency shaky in the US, traders are betting on oil and other commodities as a perceived safe haven.
Phil Flynn, a vice president and market analyst with the Alaron Trading Corp in Chicago, said the recent interest rate cuts by the Federal Reserve had underscored for traders the depths of the country's economic risks and led them to buy oil futures.
Flynn said he thought that oil prices were more likely to fall than rise, "because I think the factors that drove us to today are unlikely to repeat in 2008."
He added that he thinks the dollar will find a bottom this year and that the problems in housing are already priced into the markets.
But most experts say that if oil prices do go down, they will probably not go down very far or for very long.
Richels of Devon Energy said that consumers in Europe and Japan were not feeling the same pressure as Americans because their currencies have been strengthening and not weakening.
"There is still a lot of demand that is outside of the United States," Richels said. "There is increasing oil consumption, particularly in the developing nations, and oil is getting more difficult to find."
NY TIMES NEWS SERVICE, NEW YORK
Now that the price of crude oil has crossed the psychologically important US$100-a-barrel threshold, and then retreated, what direction will it take next?
Many experts say it will go up, then down, and then maybe up again. That, anyway, has been the pattern of the last several years of volatile prices.
The arguments for even higher oil prices are well known. The economies of China and India are booming and hungry for energy. Oil fields in Mexico and the US are drying up, tightening world supplies. Venezuelan President Hugo Chavez is using oil as a political weapon. Rebels in Nigeria are creating havoc in some of Africa's most productive oil fields.
The war in Iraq rages on. The dollar is weakening, causing hedge funds and traders to flee to oil and other commodities as a safe haven.
But all those factors were in play last summer when the price fell to about US$60 a barrel, before it rallied at the end of the year. The price touched US$100 on Wednesday and surpassed that briefly on Thursday before retreating after the US government reported higher-than-expected heating oil and gasoline supplies. The price settled at US$99.18 a barrel, down 44 cents.
"Predicting oil prices continually demonstrates the perils of prophecy, because oil prices are the derivative of what happens in the global economy and global geopolitics," said Daniel Yergin, chairman of Cambridge Energy Research Associates. Yergin said he could foresee oil prices surging as high as US$150 in the next few years or falling as low as US$40.
John Richels, president of the Devon Energy Corp, an international oil and gas company based in Oklahoma City, said US$150 a barrel was possible, but so was US$55.
"We have to make investments based on our outlook over a long period of time," he said. "It is tough."
Central to the question of where oil prices will go is the effect of high prices on the consumption and development of alternative fuels.
Large amounts of public and private investment are going into solar, wind and biofuel development, but so far they are making only a slight contribution to energy supplies. Scientific and engineering leaps, like developing the atomic bomb or sending a man to the moon, can be made relatively quickly, but they are still measured in years.
Until now, most economists have been surprised that the steady rise in oil prices -- from as low as US$11 less than a decade ago -- has not had a greater effect on US consumers. But with oil prices rising at an increasingly rapid rate over the last few months in conjunction with the housing market slump and credit squeeze, many economists wonder whether oil prices could tip the economy into a recession.
A recession, of course, would curb oil demand. That would push oil prices right back down again, or so the theory goes, as fewer consumers drive to the mall, companies produce and ship less and world trade slows.
"If we are slowing down, we will not be buying as much goods from China and services from India," said Addison Armstrong, director for market research at Tradition Energy, an energy broker that deals with banks and hedge funds.
"My forecast for 2008 is that crude prices will average US$75 a barrel, and that is based on a scenario of a slowing economy in the United States," he said.
But Armstrong and other experts cautioned that a protracted insurgency in Nigeria, a punishing hurricane season or other unpredictable events could take oil prices up.
So why are oil prices going up now? The military situation in Iraq is arguably improving, and Iraqi oil exports are beginning to flow again. Tensions with Iran have eased a bit. There are forecasts for a mild late winter in the US, which should help bolster oil and gasoline inventories going into the spring and summer driving season.
Many experts say the answer lies in the investment decisions of traders and hedge funds. With the markets in equities, housing, credit and currency shaky in the US, traders are betting on oil and other commodities as a perceived safe haven.
Phil Flynn, a vice president and market analyst with the Alaron Trading Corp in Chicago, said the recent interest rate cuts by the Federal Reserve had underscored for traders the depths of the country's economic risks and led them to buy oil futures.
Flynn said he thought that oil prices were more likely to fall than rise, "because I think the factors that drove us to today are unlikely to repeat in 2008."
He added that he thinks the dollar will find a bottom this year and that the problems in housing are already priced into the markets.
But most experts say that if oil prices do go down, they will probably not go down very far or for very long.
Richels of Devon Energy said that consumers in Europe and Japan were not feeling the same pressure as Americans because their currencies have been strengthening and not weakening.
"There is still a lot of demand that is outside of the United States," Richels said. "There is increasing oil consumption, particularly in the developing nations, and oil is getting more difficult to find."
NY TIMES NEWS SERVICE, NEW YORK
What's Really Bothering Beijing?
By Gerrit van der Wees
Almost every day, Taiwan is feeling the heat of China's aggression: Beijing's military threat and intimidation, more than 1,000 missiles aimed its way, constant attempts to isolate it internationally and a failure to accept Taiwan as a friendly neighbor.
What is China fighting against? What is driving China's leaders in their obsession with Taiwan? When we go back in history, we see three main reasons.
One is the Chinese Civil War, which the Chinese Communist Party (CCP) fought against the Chinese Nationalist Party (KMT). This struggle was deeply ingrained in the minds of older leaders of the CCP, and still plays an important role in the thinking of the present leadership. But as the international power and influence of the KMT waned in the 1970s and 1980s, the old hostility was refocused on the new "threat": Taiwan's democracy.
While Taiwan considered its transition to democracy in the late 1980s and early 1990s a momentous achievement, the leaders of the PRC perceived it as a threat to the authoritarian system they had built in China.
If the Chinese had ideas similar to those of the Taiwanese, then the rule of the CCP would be finished.
China is thus not fighting Taiwan because the latter wants to remain separate: History shows that most Chinese leaders don't care much whether Taiwan is separate or not. It is an outlying place -- very much like the Northwest Territories for the US -- and not crucial to China's "center of civilization."
The real reason China is fighting Taiwan is because it represents a successful democracy right next door, undermining the CCP's authoritarian "stability."
The second reason that seems to be prevalent in Chinese thinking is to "right the wrongs" caused by two centuries of "humiliation"at the hands of Western countries.
This may have been a factor in the 19th century, after the Opium Wars, when Western states established enclaves along the Chinese coast, but the trials and tribulations of the 20th century were of China's own making: The Chinese Civil War, the Great Leap Forward and the Cultural Revolution were internal Chinese affairs with which the West had little to do.
The third reason for China's hardheaded attitude toward Taiwan is that it thinks Taiwan's close association with the US and the West stands in the way of China becoming a "great power."
The leaders in Beijing have set an ambitious course for China to become a "superpower" along the lines of the US: wielding economic and political influence and power across the globe.
For China's leaders, "possession" of Taiwan is a key element in their geostrategic competition with the US -- and to a lesser extent in their regional competition with Japan.
This is because of Taiwan's strategic location -- straddling the important sea lanes between Japan and Southeast Asia while keeping China from unfettered access to the deep oceans of the Pacific.
China's threats to Taiwan are thus not caused by Taiwan's efforts to seek its rightful place under the sun, but rather by geostrategic competition with the US. This argument is made eloquently in a recent book titled Why Taiwan? by Alan Wachman of Tufts University. As long as "Taiwan's people seek the dignity of sovereignty and the assurance that so long as they do no harm to the PRC, Beijing will regard the island with neighborly comity," Wachman writes.
He argues that if, on the other hand, one views the issue through the lens of Beijing's geostrategic ambitions, one might come to a very different conclusion. If it sees Taiwan as essential to its security and even more importantly as part of a broader geostrategic competition with the US and Japan, the chance of Beijing resorting to the use of force is much greater.
This has important implications for the US. Another US East Asia researcher, Don Rodgers, recently wrote: "In the United States, policymakers must be careful not to view increasing tensions between China and Taiwan as the outcome of a `trouble-making' government in Taiwan (as they seem far too inclined to do), but rather as one manifestation of an intensifying geostrategic competition between China and the US and Japan."
Let us hope that Washington pays heed.
Gerrit van der Wees is editor at the Washington-based Taiwan Communique.
Almost every day, Taiwan is feeling the heat of China's aggression: Beijing's military threat and intimidation, more than 1,000 missiles aimed its way, constant attempts to isolate it internationally and a failure to accept Taiwan as a friendly neighbor.
What is China fighting against? What is driving China's leaders in their obsession with Taiwan? When we go back in history, we see three main reasons.
One is the Chinese Civil War, which the Chinese Communist Party (CCP) fought against the Chinese Nationalist Party (KMT). This struggle was deeply ingrained in the minds of older leaders of the CCP, and still plays an important role in the thinking of the present leadership. But as the international power and influence of the KMT waned in the 1970s and 1980s, the old hostility was refocused on the new "threat": Taiwan's democracy.
While Taiwan considered its transition to democracy in the late 1980s and early 1990s a momentous achievement, the leaders of the PRC perceived it as a threat to the authoritarian system they had built in China.
If the Chinese had ideas similar to those of the Taiwanese, then the rule of the CCP would be finished.
China is thus not fighting Taiwan because the latter wants to remain separate: History shows that most Chinese leaders don't care much whether Taiwan is separate or not. It is an outlying place -- very much like the Northwest Territories for the US -- and not crucial to China's "center of civilization."
The real reason China is fighting Taiwan is because it represents a successful democracy right next door, undermining the CCP's authoritarian "stability."
The second reason that seems to be prevalent in Chinese thinking is to "right the wrongs" caused by two centuries of "humiliation"at the hands of Western countries.
This may have been a factor in the 19th century, after the Opium Wars, when Western states established enclaves along the Chinese coast, but the trials and tribulations of the 20th century were of China's own making: The Chinese Civil War, the Great Leap Forward and the Cultural Revolution were internal Chinese affairs with which the West had little to do.
The third reason for China's hardheaded attitude toward Taiwan is that it thinks Taiwan's close association with the US and the West stands in the way of China becoming a "great power."
The leaders in Beijing have set an ambitious course for China to become a "superpower" along the lines of the US: wielding economic and political influence and power across the globe.
For China's leaders, "possession" of Taiwan is a key element in their geostrategic competition with the US -- and to a lesser extent in their regional competition with Japan.
This is because of Taiwan's strategic location -- straddling the important sea lanes between Japan and Southeast Asia while keeping China from unfettered access to the deep oceans of the Pacific.
China's threats to Taiwan are thus not caused by Taiwan's efforts to seek its rightful place under the sun, but rather by geostrategic competition with the US. This argument is made eloquently in a recent book titled Why Taiwan? by Alan Wachman of Tufts University. As long as "Taiwan's people seek the dignity of sovereignty and the assurance that so long as they do no harm to the PRC, Beijing will regard the island with neighborly comity," Wachman writes.
He argues that if, on the other hand, one views the issue through the lens of Beijing's geostrategic ambitions, one might come to a very different conclusion. If it sees Taiwan as essential to its security and even more importantly as part of a broader geostrategic competition with the US and Japan, the chance of Beijing resorting to the use of force is much greater.
This has important implications for the US. Another US East Asia researcher, Don Rodgers, recently wrote: "In the United States, policymakers must be careful not to view increasing tensions between China and Taiwan as the outcome of a `trouble-making' government in Taiwan (as they seem far too inclined to do), but rather as one manifestation of an intensifying geostrategic competition between China and the US and Japan."
Let us hope that Washington pays heed.
Gerrit van der Wees is editor at the Washington-based Taiwan Communique.
2008年1月6日星期日
2008年1月2日星期三
How to Cash in on a Warming Planet
By Adam Aston
Set aside, for now, the really complex and costly financial implications of climate change. Ignore the tricky abstractions of carbon trading. Forget the worries over flooded cities and the ins and outs of renewable energy.
Instead, consider just a few everyday money-making ideas created by the warming of our planet. For example, oenophiles could short the stocks of vintners in drought-prone areas such as Australia or California and bet on upstarts in Canada and England, where new wineries are sprouting as temperatures rise. Or, since ski resorts are seeing less and less snow, it might make sense to buy and hold manufacturers of snowmakers.
Of course, the potential of climate-change investing goes far beyond mere curiosities. A growing number of advisers to big institutional investors and high-net-worth types are sizing up companies based on how likely they are to benefit from rising energy prices, stricter regulations, and changes to the natural world ranging from freshwater shortages to new disease patterns and more chaotic weather. Since public opinion is increasingly driving U.S. policymakers to act, analysts' climate predictions need not be perfectly prescient to pay off. "Perception drives valuations," says Edward M. Kerschner, chief investment strategist for Citi Global Wealth Management (C), who recently made public a list of some 90 "climate consequences companies" he believes could excel as the climate changes and limits on carbon emissions multiply.
If there's a whiff of familiarity to investing in climate change, that's because some of its key elements have already attracted attention. Pure-play renewable energy stocks, for example, make up a big slice of the new climate change offerings and have seen meteoric gains over the past year. The difference is that climate change strategists make their picks from a larger pool, including everything from small-cap alternative energy startups to globe-spanning conglomerates, as well as a few decidedly nongreen plays. Given the breadth of companies in this space, "there's significant opportunity for actively managed funds," says Michael Herbst, a mutual fund analyst at Morningstar (MORN).
HOT OPTIONS
Consider HSBC's (HBC) Global Climate Change Benchmark Index, which tracks 300 equities, spans 34 countries (11 of which are emerging markets), and includes small, medium, and big companies. Simulations of the 45 months prior to its September debut show the index would have beaten the Morgan Stanley (MS) Capital International (MSCI) global index by 70%. In November, HSBC launched a fund in Europe that focuses on a subset of about 60 companies from the index. A U.S. version, the GIF Climate Change Fund, is due by April.
Deutsche Bank's (DB) DWS Climate Change Fund beat HSBC to the American market last November. It mirrors the German DWS Klimawandel fund, which since its launch last February is up 10.4%. For DWS's U.S. offering, expect somewhat pricey expense ratios of 1.75% to 2.5% of assets.
For a lower-cost approach, stock pickers can follow the pros' logic and make their own calls. Luckily, evaluating equities on their potential to capitalize on climate change is easier than untangling the complexities of global warming. A useful approach is to split the opportunities into two broad groups, explains Mark Fulton, climate-change strategist at Deutsche Bank Asset Management: mitigation and adaptation.
The first basket includes products and services that slow the flow of greenhouse gases by using less energy or by substituting clean energy for fossil fuels. That's why so many renewables such as solar and wind show up in the new climate-change funds and indices.
As of September, for example, the top 10 holdings in DWS Climate Change Fund included nine that either produce carbon-free energy or help conserve fossil fuels: solar energy (LDK Solar (LDK), SolarWorld, Umicore, and First Solar), wind energy (Acciona Energia and Gamesa), electric efficiency specialists (ABB (ABB) and Emerson Electric (EMR)), and an electric vehicle maker, Tanfield Group.
Fulton's second category includes opportunities to help the world adapt to the effects of the changing climate. This group may offer hidden values in some more obscure sectors. DWS's fund, for example, owns Veolia Environment, a water-services specialist that can help parched regions adjust. Citi's Kerschner, likewise, predicts growth for Leighton Holdings, an Australian engineering contractor that is building a growing number of plants that make seawater drinkable.
SHADES OF GREEN
If anything, the greenest of investors may be put off by aspects of climate-change investing. Citi likes big nuclear plant operators such as Entergy (ETR) and Exelon (EXC), despite worries over their waste, since their reactors crank out huge volumes of juice with virtually no greenhouse gases. Fluor (FLR), a U.S. engineering construction giant, makes the cut since it's positioned to benefit from demand for new power plants, regardless of whether they're powered by clean gas, controversial nuclear, or even not-so-clean coal.
Many of the top picks among the adaptation plays are cheaper than mitigation stocks. Ormat Technologies (ORA), a leader in renewable geothermal energy, has a pricey p-e ratio of 41, based on 2008 earnings. But in the less glamorous auto sector, makers of mileage-boosting technologies may outsell competitors more reliant on gas guzzlers. By this logic, France's PSA Peugeot Citroën, which builds Europe's most fuel-thrifty fleet, stands to beat out U.S. rivals as global demand for eco-vehicles rises. Its p-e is just 9.
An upside to these broad climate-change funds is that they expose investors to plays of all sizes, in both developed and emerging markets. But tracking such a diverse portfolio requires unusually broad expertise in complex energy, technology, and cross-border markets, notes Angus McCrone, chief editor at New Energy Finance, which tracks green markets. Regulatory reversals can also dent returns. As U.S. lawmakers debated the recent energy bill this fall, renewable stocks were whipsawed on each rumor that beneficial tax credits would disappear or expand.
Set aside, for now, the really complex and costly financial implications of climate change. Ignore the tricky abstractions of carbon trading. Forget the worries over flooded cities and the ins and outs of renewable energy.
Instead, consider just a few everyday money-making ideas created by the warming of our planet. For example, oenophiles could short the stocks of vintners in drought-prone areas such as Australia or California and bet on upstarts in Canada and England, where new wineries are sprouting as temperatures rise. Or, since ski resorts are seeing less and less snow, it might make sense to buy and hold manufacturers of snowmakers.
Of course, the potential of climate-change investing goes far beyond mere curiosities. A growing number of advisers to big institutional investors and high-net-worth types are sizing up companies based on how likely they are to benefit from rising energy prices, stricter regulations, and changes to the natural world ranging from freshwater shortages to new disease patterns and more chaotic weather. Since public opinion is increasingly driving U.S. policymakers to act, analysts' climate predictions need not be perfectly prescient to pay off. "Perception drives valuations," says Edward M. Kerschner, chief investment strategist for Citi Global Wealth Management (C), who recently made public a list of some 90 "climate consequences companies" he believes could excel as the climate changes and limits on carbon emissions multiply.
If there's a whiff of familiarity to investing in climate change, that's because some of its key elements have already attracted attention. Pure-play renewable energy stocks, for example, make up a big slice of the new climate change offerings and have seen meteoric gains over the past year. The difference is that climate change strategists make their picks from a larger pool, including everything from small-cap alternative energy startups to globe-spanning conglomerates, as well as a few decidedly nongreen plays. Given the breadth of companies in this space, "there's significant opportunity for actively managed funds," says Michael Herbst, a mutual fund analyst at Morningstar (MORN).
HOT OPTIONS
Consider HSBC's (HBC) Global Climate Change Benchmark Index, which tracks 300 equities, spans 34 countries (11 of which are emerging markets), and includes small, medium, and big companies. Simulations of the 45 months prior to its September debut show the index would have beaten the Morgan Stanley (MS) Capital International (MSCI) global index by 70%. In November, HSBC launched a fund in Europe that focuses on a subset of about 60 companies from the index. A U.S. version, the GIF Climate Change Fund, is due by April.
Deutsche Bank's (DB) DWS Climate Change Fund beat HSBC to the American market last November. It mirrors the German DWS Klimawandel fund, which since its launch last February is up 10.4%. For DWS's U.S. offering, expect somewhat pricey expense ratios of 1.75% to 2.5% of assets.
For a lower-cost approach, stock pickers can follow the pros' logic and make their own calls. Luckily, evaluating equities on their potential to capitalize on climate change is easier than untangling the complexities of global warming. A useful approach is to split the opportunities into two broad groups, explains Mark Fulton, climate-change strategist at Deutsche Bank Asset Management: mitigation and adaptation.
The first basket includes products and services that slow the flow of greenhouse gases by using less energy or by substituting clean energy for fossil fuels. That's why so many renewables such as solar and wind show up in the new climate-change funds and indices.
As of September, for example, the top 10 holdings in DWS Climate Change Fund included nine that either produce carbon-free energy or help conserve fossil fuels: solar energy (LDK Solar (LDK), SolarWorld, Umicore, and First Solar), wind energy (Acciona Energia and Gamesa), electric efficiency specialists (ABB (ABB) and Emerson Electric (EMR)), and an electric vehicle maker, Tanfield Group.
Fulton's second category includes opportunities to help the world adapt to the effects of the changing climate. This group may offer hidden values in some more obscure sectors. DWS's fund, for example, owns Veolia Environment, a water-services specialist that can help parched regions adjust. Citi's Kerschner, likewise, predicts growth for Leighton Holdings, an Australian engineering contractor that is building a growing number of plants that make seawater drinkable.
SHADES OF GREEN
If anything, the greenest of investors may be put off by aspects of climate-change investing. Citi likes big nuclear plant operators such as Entergy (ETR) and Exelon (EXC), despite worries over their waste, since their reactors crank out huge volumes of juice with virtually no greenhouse gases. Fluor (FLR), a U.S. engineering construction giant, makes the cut since it's positioned to benefit from demand for new power plants, regardless of whether they're powered by clean gas, controversial nuclear, or even not-so-clean coal.
Many of the top picks among the adaptation plays are cheaper than mitigation stocks. Ormat Technologies (ORA), a leader in renewable geothermal energy, has a pricey p-e ratio of 41, based on 2008 earnings. But in the less glamorous auto sector, makers of mileage-boosting technologies may outsell competitors more reliant on gas guzzlers. By this logic, France's PSA Peugeot Citroën, which builds Europe's most fuel-thrifty fleet, stands to beat out U.S. rivals as global demand for eco-vehicles rises. Its p-e is just 9.
An upside to these broad climate-change funds is that they expose investors to plays of all sizes, in both developed and emerging markets. But tracking such a diverse portfolio requires unusually broad expertise in complex energy, technology, and cross-border markets, notes Angus McCrone, chief editor at New Energy Finance, which tracks green markets. Regulatory reversals can also dent returns. As U.S. lawmakers debated the recent energy bill this fall, renewable stocks were whipsawed on each rumor that beneficial tax credits would disappear or expand.
Some Financial New Year's Resolutions
by Anya Kamenetz of Generation Debt
It's 2008 - and time to make a fresh financial start.
Simply ringing in the new year at midnight just doesn't do it for me anymore. I have a six-year tradition of greeting the dawn on New Year's Day. There's nothing like a cold, clear January sunrise to make you really believe in new beginnings.
Not that new beginnings are in short supply during the Gen Debt stage of life. Most of the young adults I know already have lives that are jam-packed with transitions: graduating college, starting grad school, changing roommates, changing jobs, changing cities, changing relationships. Even relatively small shifts like taking out a loan, getting a promotion at work, or dealing with the holidays can add stress to our lives. Check out this scale to see just how many "Life Change Units" you've piled up in the last year.
No matter what changes you might be experiencing, the new year is an excellent time to take stock of your personal, professional, and financial lives. According to a Harris Survey commissioned by Yahoo!, 65 percent of Americans who make a financial New Year's resolution vow to eliminate or reduce debt. Here are some of my own monetary resolutions for the year.
Spend lean and green
With the Bali climate conference taking place in December, a big energy bill in the Senate, and Al Gore accepting the Nobel Peace Prize for his efforts to help solve the climate crisis, awareness of our impact on the environment is at an all-time high. Recently, I had an inspiring conversation with TLC's Peter Walsh (the host of that cable network's "Clean Sweep") in which he pointed out that every purchase we make includes "buying in" to the manufacturing, transportation, and packaging of the product.
The earth's future belongs to young people like us, and that's why I'm trying hard to buy less, buy used, buy local, and buy green. This doesn't always mean purchasing the cheapest thing in the store - certainly not if it's going to wear out and need to be replaced right away. It means making conscious spending decisions, choosing items that are beautiful enough to give you joy and well-made enough to last a lifetime.
For more motivation, watch this very informative animated Web lecture, "The Story of Stuff."
Monitor your credit score
I had a ding on my credit score early last year due to a missed bill while I was out of the country, so I've been ordering my credit scores from MyFico.com for $15.95 a pop every six months.
This is an excellent place to start getting a handle on your financial life. (You can also go to Annualcreditreport.com to get your free credit report as required by federal law, but it doesn't include your score.) The credit report shows all the revolving accounts you have, such as credit cards, student loans, and car loans. It shows your payment history and the number of credit inquiries made in the last year -- for example, if you signed up for a new cell phone account or applied for a car loan, a company may have pulled your file.
If you see any mistakes on your account, you'll need to send a letter disputing the charge. MyFico does a good job of explaining which actions (like paying off your cards) can help your score and which actions (like maxing out your cards) can hurt it. But don't sign up for the extras like credit-score monitoring services (which alert you monthly, weekly, or even daily to changes in your credit) -- they're of dubious value.
Rediscover pencils, paper, and cash
Financial management is increasingly taking place online. This fall I've been trying out some of the different free online financial planning services aimed at younger folks, such as Mint, Geezeo, and Wesabe.
These sites centralize all of your accounts in one place, which makes things easier for you if you have multiple credit cards or student loans. For me, what works best is to have one bank account, one credit card that I use, and one brokerage account. Each of these institutions sends me a monthly e-statement, reminding me to go over the books.
As useful as online tools can be, 2008 is going to be the year of the analog for me. Just last week I was trying to figure out a discrepancy in my credit card bill, and I ended up writing down and adding up all the charges for the last three months. I was shocked to realize that on the credit card I "never use," I had made over $250 worth of purchases. There's nothing like pen and paper to make money clear and concrete.
I also vow that January 2008 is going to be the month I try out the envelope trick. If you want to get a clue about how much you're spending on incidentals, go to the ATM at the beginning of the week and distribute the cash into envelopes marked Food, Travel, Entertainment, Pharmacy, and Miscellaneous. When you go to a store, take out the cash from the right envelope and put in the receipt. No more cash? No more movies or pizza slices until next week.
Get proactive about saving
Pay yourself first. Your first priority is paying down high-interest debt. Then you want a $2,000 emergency fund (invested in a money market or e-savings account earning 4 percent-plus) and a retirement account. If you're a savings pro, purchase a 12-month CD (topping out at 5 percent interest) as a way to save for medium-term purchases like a vacation or a car. If you devote 10 percent of your income to savings, you'll be a happy camper.
Take control of retirement planning
If you're in your 20s and you don't have a 401(k) through your employer, do not pass go. Open a Roth Individual Retirement Account right now. There is no minimum amount to open the account.
Once you open it, there is the question of how to invest the funds. This can be surprisingly simple. I originally opened my IRA with my bank in 2004. I had asked for my retirement savings to be invested in "low-cost" mutual funds and trusted the friendly, helpful representative at the bank to provide them.
This year, in an attempt to diversify, I also purchased some overseas mutual funds with Vanguard, the market leader in low-cost investing. In the process, I learned that I should be looking to invest in "no load" mutual funds with an "expense ratio" of 0.75 percent or less.
It turns out that for an average, long-term investor, low administrative costs and commissions are far more important to your returns than the "performance" of the fund or how well your stocks do in any one year.
In fact, those who simply purchase very low-cost index funds -- a broad sampling of stocks from the entire market -- are far ahead of the game.
"I have yet to meet a retiree that couldn't have met his or her retirement goals just with market returns," Paul Merriman, the editor of FundAdvice.com and an investment adviser at Merriman Berkman Next in Seattle, told "The New York Times" earlier this fall.
So I decided to switch my IRA into low-cost, no-load index funds. It was very frustrating to learn that my existing account didn't provide no-load options, and that the "low cost" mutual fund I was signed up for actually had a high expense ratio of 1.75 percent.
I'm now in the process of moving my IRA over to Vanguard so I can keep my investing costs as low as possible, and opening a SEP IRA (Simplified Employment Pension IRA) so I can increase the amount I put away. Fidelity is another often-recommended broker with lots of resources for retirement planning.
Get ahead of tax time
An old-fashioned receipt spike, like you see in a restaurant, will help collect business-related receipts for better filing in chronological order, whether you use an online tool to record expenses or not.
Set conscious goals
It's natural to get stressed out when thinking about money. What helps me deal is to picture positive long-term goals. What's your vision for the year? Improving your credit score 20 points into the "good" range? A fully funded retirement account? Getting into "good standing" with Sallie Mae? Opening your bills right away instead of tossing them?
Write your goals on Post-It Notes and stick them next to your desk or on your bedside table. Or set up an online calendar reminder to pop up in a month or two.
When my reminder comes up on Feb. 1, I'll re-read this column to see how on-track I am. If anyone else has financial resolutions, please leave them in the comments; you're more likely to keep a public pledge.
It's 2008 - and time to make a fresh financial start.
Simply ringing in the new year at midnight just doesn't do it for me anymore. I have a six-year tradition of greeting the dawn on New Year's Day. There's nothing like a cold, clear January sunrise to make you really believe in new beginnings.
Not that new beginnings are in short supply during the Gen Debt stage of life. Most of the young adults I know already have lives that are jam-packed with transitions: graduating college, starting grad school, changing roommates, changing jobs, changing cities, changing relationships. Even relatively small shifts like taking out a loan, getting a promotion at work, or dealing with the holidays can add stress to our lives. Check out this scale to see just how many "Life Change Units" you've piled up in the last year.
No matter what changes you might be experiencing, the new year is an excellent time to take stock of your personal, professional, and financial lives. According to a Harris Survey commissioned by Yahoo!, 65 percent of Americans who make a financial New Year's resolution vow to eliminate or reduce debt. Here are some of my own monetary resolutions for the year.
Spend lean and green
With the Bali climate conference taking place in December, a big energy bill in the Senate, and Al Gore accepting the Nobel Peace Prize for his efforts to help solve the climate crisis, awareness of our impact on the environment is at an all-time high. Recently, I had an inspiring conversation with TLC's Peter Walsh (the host of that cable network's "Clean Sweep") in which he pointed out that every purchase we make includes "buying in" to the manufacturing, transportation, and packaging of the product.
The earth's future belongs to young people like us, and that's why I'm trying hard to buy less, buy used, buy local, and buy green. This doesn't always mean purchasing the cheapest thing in the store - certainly not if it's going to wear out and need to be replaced right away. It means making conscious spending decisions, choosing items that are beautiful enough to give you joy and well-made enough to last a lifetime.
For more motivation, watch this very informative animated Web lecture, "The Story of Stuff."
Monitor your credit score
I had a ding on my credit score early last year due to a missed bill while I was out of the country, so I've been ordering my credit scores from MyFico.com for $15.95 a pop every six months.
This is an excellent place to start getting a handle on your financial life. (You can also go to Annualcreditreport.com to get your free credit report as required by federal law, but it doesn't include your score.) The credit report shows all the revolving accounts you have, such as credit cards, student loans, and car loans. It shows your payment history and the number of credit inquiries made in the last year -- for example, if you signed up for a new cell phone account or applied for a car loan, a company may have pulled your file.
If you see any mistakes on your account, you'll need to send a letter disputing the charge. MyFico does a good job of explaining which actions (like paying off your cards) can help your score and which actions (like maxing out your cards) can hurt it. But don't sign up for the extras like credit-score monitoring services (which alert you monthly, weekly, or even daily to changes in your credit) -- they're of dubious value.
Rediscover pencils, paper, and cash
Financial management is increasingly taking place online. This fall I've been trying out some of the different free online financial planning services aimed at younger folks, such as Mint, Geezeo, and Wesabe.
These sites centralize all of your accounts in one place, which makes things easier for you if you have multiple credit cards or student loans. For me, what works best is to have one bank account, one credit card that I use, and one brokerage account. Each of these institutions sends me a monthly e-statement, reminding me to go over the books.
As useful as online tools can be, 2008 is going to be the year of the analog for me. Just last week I was trying to figure out a discrepancy in my credit card bill, and I ended up writing down and adding up all the charges for the last three months. I was shocked to realize that on the credit card I "never use," I had made over $250 worth of purchases. There's nothing like pen and paper to make money clear and concrete.
I also vow that January 2008 is going to be the month I try out the envelope trick. If you want to get a clue about how much you're spending on incidentals, go to the ATM at the beginning of the week and distribute the cash into envelopes marked Food, Travel, Entertainment, Pharmacy, and Miscellaneous. When you go to a store, take out the cash from the right envelope and put in the receipt. No more cash? No more movies or pizza slices until next week.
Get proactive about saving
Pay yourself first. Your first priority is paying down high-interest debt. Then you want a $2,000 emergency fund (invested in a money market or e-savings account earning 4 percent-plus) and a retirement account. If you're a savings pro, purchase a 12-month CD (topping out at 5 percent interest) as a way to save for medium-term purchases like a vacation or a car. If you devote 10 percent of your income to savings, you'll be a happy camper.
Take control of retirement planning
If you're in your 20s and you don't have a 401(k) through your employer, do not pass go. Open a Roth Individual Retirement Account right now. There is no minimum amount to open the account.
Once you open it, there is the question of how to invest the funds. This can be surprisingly simple. I originally opened my IRA with my bank in 2004. I had asked for my retirement savings to be invested in "low-cost" mutual funds and trusted the friendly, helpful representative at the bank to provide them.
This year, in an attempt to diversify, I also purchased some overseas mutual funds with Vanguard, the market leader in low-cost investing. In the process, I learned that I should be looking to invest in "no load" mutual funds with an "expense ratio" of 0.75 percent or less.
It turns out that for an average, long-term investor, low administrative costs and commissions are far more important to your returns than the "performance" of the fund or how well your stocks do in any one year.
In fact, those who simply purchase very low-cost index funds -- a broad sampling of stocks from the entire market -- are far ahead of the game.
"I have yet to meet a retiree that couldn't have met his or her retirement goals just with market returns," Paul Merriman, the editor of FundAdvice.com and an investment adviser at Merriman Berkman Next in Seattle, told "The New York Times" earlier this fall.
So I decided to switch my IRA into low-cost, no-load index funds. It was very frustrating to learn that my existing account didn't provide no-load options, and that the "low cost" mutual fund I was signed up for actually had a high expense ratio of 1.75 percent.
I'm now in the process of moving my IRA over to Vanguard so I can keep my investing costs as low as possible, and opening a SEP IRA (Simplified Employment Pension IRA) so I can increase the amount I put away. Fidelity is another often-recommended broker with lots of resources for retirement planning.
Get ahead of tax time
An old-fashioned receipt spike, like you see in a restaurant, will help collect business-related receipts for better filing in chronological order, whether you use an online tool to record expenses or not.
Set conscious goals
It's natural to get stressed out when thinking about money. What helps me deal is to picture positive long-term goals. What's your vision for the year? Improving your credit score 20 points into the "good" range? A fully funded retirement account? Getting into "good standing" with Sallie Mae? Opening your bills right away instead of tossing them?
Write your goals on Post-It Notes and stick them next to your desk or on your bedside table. Or set up an online calendar reminder to pop up in a month or two.
When my reminder comes up on Feb. 1, I'll re-read this column to see how on-track I am. If anyone else has financial resolutions, please leave them in the comments; you're more likely to keep a public pledge.
$100 Oil Will Hit Gas and Airfare
by Steve Hargreaves and Keisha Lamothe, CNNMoney.com staff writers
The rising price of oil is starting to bite - at the pump, the airline ticket counter and possibly in your home.
Oil hit $100 a barrel Wednesday and gasoline prices could soon top their all-time record from last May of $3.22 a gallon.
"There's no doubt, gasoline prices are rocketing higher," said Stephen Schork, publisher of the industry newsletter the Schork Report. "We could be paying more for gas than we were during the start of the summer driving season."
Gas prices now average $3.05 a gallon nationwide, according to AAA. Many states have had gas over $3 for some time.
In the past few months, drivers have gotten off easy - gas prices hadn't kept up with the increase in oil prices. The main reason: Demand has been fairly tame.
But demand picked up during the holiday season.
At the same time, supplies of gas could get tight as many U.S. refiners are undergoing maintenance, according to Schork. And they stand ready to decrease production if gas prices don't move higher, according to Kevin Norrish, a commodities analyst at Barclays in London.
"The relative price of gasoline is low, and that's unsustainable," said Norrish.
As for next spring, when gas prices usually spike on anticipation of increased demand over the summer, Schork noted that in all likelihood we'll be going into the season with much less in gasoline inventories than last year.
"You're that much closer to $4" a gallon gasoline, he said.
Expensive flights
Higher oil prices also mean higher airfare for travelers. As the price of crude rises, jet fuel prices also increase.
In November, American Airlines - the nation's biggest carrier - raised the price of U.S. round-trip tickets by $20, and other major airlines followed suit.
American said it increased fares in an attempt to offset losses from rising crude oil and jet fuel prices.
The Air Transport Association (ATA), the airline industry's main trade group, said recently higher fuel prices drove second-quarter costs 5.6 percent higher. That's more than twice the rate during the same period last year.
"Jet fuel has been going up consistently for the last 3 to 4 years to the point where it's affecting the airlines bottom line," said Will Alibrandi, an analyst for the aviation market analysis firm Forecast International. "Any cost gets returned to the customer, so they've been bumping up ticket prices to make up the difference," he said.
Heating up a bit
Rising oil prices could also mean higher heating bills for those who use oil - mostly households in the Northeast, or about 7 percent of the country.
For them, oil's rise will be particularly painful: a 22 percent increase in bills from last year, according to the Energy Information Administration.
The rest of the country doesn't face such steep increases, but they won't exactly get a free ride.
Roughly 50 percent of Americans use natural gas to heat their homes. And while natural gas prices aren't tied directly to the price of crude, those who use natural gas could see a 10 percent increase in home-heating bills.
Norrish expects natural gas prices to rise only modestly in the near future.
People who heat with electricity, about 30 percent of the nation, can expect to pay 4 percent more.
The bigger picture
One fear is that higher gas prices will lift the costs to transport all goods, whether by truck, ship or plane - and that manufacturers and retailers will respond by raising prices for consumers.
But economists say that's unlikely.
While costs to business have risen, cost for consumer goods have not posted a corresponding increase, said Drew Matus, a senior economist at Lehman Brothers.
"We haven't seen an impact," said Matus. "It's just not as significant as the shock value suggests."
As for consumer spending, Matus said high gas prices haven't had much of an impact as gasoline generally doesn't make up a huge chunk of people's disposable income.
"I think energy prices would have to be much higher in order for them to have an impact on consumer behavior," he said.
The rising price of oil is starting to bite - at the pump, the airline ticket counter and possibly in your home.
Oil hit $100 a barrel Wednesday and gasoline prices could soon top their all-time record from last May of $3.22 a gallon.
"There's no doubt, gasoline prices are rocketing higher," said Stephen Schork, publisher of the industry newsletter the Schork Report. "We could be paying more for gas than we were during the start of the summer driving season."
Gas prices now average $3.05 a gallon nationwide, according to AAA. Many states have had gas over $3 for some time.
In the past few months, drivers have gotten off easy - gas prices hadn't kept up with the increase in oil prices. The main reason: Demand has been fairly tame.
But demand picked up during the holiday season.
At the same time, supplies of gas could get tight as many U.S. refiners are undergoing maintenance, according to Schork. And they stand ready to decrease production if gas prices don't move higher, according to Kevin Norrish, a commodities analyst at Barclays in London.
"The relative price of gasoline is low, and that's unsustainable," said Norrish.
As for next spring, when gas prices usually spike on anticipation of increased demand over the summer, Schork noted that in all likelihood we'll be going into the season with much less in gasoline inventories than last year.
"You're that much closer to $4" a gallon gasoline, he said.
Expensive flights
Higher oil prices also mean higher airfare for travelers. As the price of crude rises, jet fuel prices also increase.
In November, American Airlines - the nation's biggest carrier - raised the price of U.S. round-trip tickets by $20, and other major airlines followed suit.
American said it increased fares in an attempt to offset losses from rising crude oil and jet fuel prices.
The Air Transport Association (ATA), the airline industry's main trade group, said recently higher fuel prices drove second-quarter costs 5.6 percent higher. That's more than twice the rate during the same period last year.
"Jet fuel has been going up consistently for the last 3 to 4 years to the point where it's affecting the airlines bottom line," said Will Alibrandi, an analyst for the aviation market analysis firm Forecast International. "Any cost gets returned to the customer, so they've been bumping up ticket prices to make up the difference," he said.
Heating up a bit
Rising oil prices could also mean higher heating bills for those who use oil - mostly households in the Northeast, or about 7 percent of the country.
For them, oil's rise will be particularly painful: a 22 percent increase in bills from last year, according to the Energy Information Administration.
The rest of the country doesn't face such steep increases, but they won't exactly get a free ride.
Roughly 50 percent of Americans use natural gas to heat their homes. And while natural gas prices aren't tied directly to the price of crude, those who use natural gas could see a 10 percent increase in home-heating bills.
Norrish expects natural gas prices to rise only modestly in the near future.
People who heat with electricity, about 30 percent of the nation, can expect to pay 4 percent more.
The bigger picture
One fear is that higher gas prices will lift the costs to transport all goods, whether by truck, ship or plane - and that manufacturers and retailers will respond by raising prices for consumers.
But economists say that's unlikely.
While costs to business have risen, cost for consumer goods have not posted a corresponding increase, said Drew Matus, a senior economist at Lehman Brothers.
"We haven't seen an impact," said Matus. "It's just not as significant as the shock value suggests."
As for consumer spending, Matus said high gas prices haven't had much of an impact as gasoline generally doesn't make up a huge chunk of people's disposable income.
"I think energy prices would have to be much higher in order for them to have an impact on consumer behavior," he said.
Reluctant Retirement Savers May Be Scared Straight by These Stats
by Robert Powell, provided by MarketWatch
What's the best way to motivate Americans to save, invest and prepare for retirement? Some behavioral finance experts suggest using the carrot. Others suggest using the stick. And still others suggest using a combination of carrot and stick.
As for me, I suggest the use of statistics. Consider just a sampling of the numbers that have been released this year:
IRAs and 401(k)s
There's $4.23 trillion in individual retirements accounts, but that figure hides the fact that very few Americans contribute to an IRA and even when they do the amount is small.
On average, just 10% of eligible Americans contributed to an IRA for the years 2000 to 2002, according to the latest issue of EBRI Notes. And in 2004, the median contribution to a traditional IRA was just $2,300, according to the Investment Company Institute. The maximum you could contribute to an IRA in 2004, by the way, was $3,000 or $3,500 for those 50 and older.
Now you might say that's not so bleak given that working Americans are presumably saving for retirement using an employer-sponsored plan, such as a 401(k), 403(b), 457 or Thrift Savings Plan. But again, the numbers are somewhat depressing.
There are nearly 100 million Americans age 21 to 64 working full-time, full-year. But of that number, just 60% or 58.4 million work for an employer that sponsors a retirement plan, and only 52.7%, or 50.8 million participate in a retirement plan.
That means roughly half of all working Americans don't participate in a retirement plan or don't have an employer-sponsored plan in which to participate. It also means that a huge number of adult Americans -- by my estimate 150 million of a potential 200 million -- aren't saving for retirement in any meaningful way, if at all.
Retirement risks
According to the Society of Actuaries' 2007 Risks and Process Retirement Survey, roughly half to 60% of retirees worry about three things: the cost of health care, the effect of inflation on their nest eggs and not being able to maintain a reasonable standard of living for the rest of their life.
Those worries are justified given the lack of savings in America. But what's really bothersome is the degree to which those who aren't worried should be.
Consider, for instance, health-care costs. Fidelity Investments estimated earlier this year that a 65-year-old couple retiring today would need $215,000 set aside just to pay for medical expenses over a 20-year span. And if that wasn't depressing enough, other estimates are even higher.
Paul Fronstin of the Employee Benefit Research Institute, for instance, said a 65-year-old couple retiring today would need, assuming average life expectancy of 82 for men and 85 for women, more than $300,000 set aside to pay for health-care costs (premiums and out-of-pocket expenses) in retirement, and more than $550,000 if the couple lives to age 92.
What's even more depressing is that neither the EBRI nor Fidelity estimates factor in the cost of nursing homes, long-term care or assisted-living facilities, or home health aides. And those costs are staggering.
According to the MetLife Mature Market Institute, it costs $69,000 per year for a semiprivate nursing-home room, $35,628 per year for a unit in an assisted-living facility, $19 an hour for a home health aide and $61 per day for an adult day care center. Where's that money going to come from?
Retirement expenses
Retirees and would-be retirees are also right to fret about maintaining their standard of living. Consider, for instance, these numbers: The median household income (half above, half below) in America is $48,451 and the average is $65,527, according to the U.S. Census Bureau. But in retirement, income falls dramatically.
The average total income for those 65 and older in America is $25,610, and the median was a meager $16,770, according to EBRI Notes. That means retirees are living on roughly one-third of their preretirement income. And that's a far cry from the 70% to 80% income replacement experts suggest Americans need to maintain their preretirement standard of living.
Besides not having the income to maintain a similar standard of living, retirees will face expenses that are certain to rise faster than the average rate of inflation.
Consider, for instance, the results of the 2002 Consumer Expenditure Survey. On average, retirees spent 32.6% on housing, 14% on food, and 13% on health care. But that's the average. What's interesting is the degree to which money spent on health care in retirement changes over time.
For instance, those 55 to 64 spend 6.8% on health care, those 65 to 74 spend 11.2% and those 75 and older spend 15.1%. That percentage rises in part because the cost of health care is rising twice as fast as the core rate of inflation (less energy and food), 5% vs. 2.3%, according to the U.S. Bureau of Labor Statistics. But it also rises because older retirees tend to spend more on health care than younger retirees.
Source of retirement income
So where do retirees get their income once in retirement? Again, the numbers are depressing (and deceiving). On average, retirees get 39.8% from Social Security, 23.7% from earnings, 19.4% from pensions and annuities, 15.4% from assets (IRAs and the like) and 1.9% from other sources, according to EBRI Notes.
But the composition of the income changes dramatically based on income. Retirees in the bottom fifth of income, those with less than $8,261 in 2006, got 87.6% of their income from Social Security while those in the top fifth of income, those with greater than $34,570, got 36.4% from earnings, 22.6% from pensions, 20.5% from assets, and just 18.5% from Social Security.
The moral of story
If you are among the 150 million who are not saving for retirement, now would be a good time to do so. If you are among the 50 million who are saving for retirement, now would be a good time to save more.
If you are among those who aren't worried about health-care costs, inflation or maintaining a standard of living in retirement, now would be a good time to start worrying.
If you are among those who worry about retirement risks, now would be a good time to do something about it: Set aside money for health care, for instance.
And if you are among those who don't know what your sources and composition of retirement income will be, now would be a good time to figure that out. After all, waiting to see how things might work out isn't the world's best plan.
Robert Powell has been a journalist covering personal finance issues for more than 20 years, writing and editing for publications such as The Wall Street Journal, the Financial Times, and Mutual Fund Market News.
What's the best way to motivate Americans to save, invest and prepare for retirement? Some behavioral finance experts suggest using the carrot. Others suggest using the stick. And still others suggest using a combination of carrot and stick.
As for me, I suggest the use of statistics. Consider just a sampling of the numbers that have been released this year:
IRAs and 401(k)s
There's $4.23 trillion in individual retirements accounts, but that figure hides the fact that very few Americans contribute to an IRA and even when they do the amount is small.
On average, just 10% of eligible Americans contributed to an IRA for the years 2000 to 2002, according to the latest issue of EBRI Notes. And in 2004, the median contribution to a traditional IRA was just $2,300, according to the Investment Company Institute. The maximum you could contribute to an IRA in 2004, by the way, was $3,000 or $3,500 for those 50 and older.
Now you might say that's not so bleak given that working Americans are presumably saving for retirement using an employer-sponsored plan, such as a 401(k), 403(b), 457 or Thrift Savings Plan. But again, the numbers are somewhat depressing.
There are nearly 100 million Americans age 21 to 64 working full-time, full-year. But of that number, just 60% or 58.4 million work for an employer that sponsors a retirement plan, and only 52.7%, or 50.8 million participate in a retirement plan.
That means roughly half of all working Americans don't participate in a retirement plan or don't have an employer-sponsored plan in which to participate. It also means that a huge number of adult Americans -- by my estimate 150 million of a potential 200 million -- aren't saving for retirement in any meaningful way, if at all.
Retirement risks
According to the Society of Actuaries' 2007 Risks and Process Retirement Survey, roughly half to 60% of retirees worry about three things: the cost of health care, the effect of inflation on their nest eggs and not being able to maintain a reasonable standard of living for the rest of their life.
Those worries are justified given the lack of savings in America. But what's really bothersome is the degree to which those who aren't worried should be.
Consider, for instance, health-care costs. Fidelity Investments estimated earlier this year that a 65-year-old couple retiring today would need $215,000 set aside just to pay for medical expenses over a 20-year span. And if that wasn't depressing enough, other estimates are even higher.
Paul Fronstin of the Employee Benefit Research Institute, for instance, said a 65-year-old couple retiring today would need, assuming average life expectancy of 82 for men and 85 for women, more than $300,000 set aside to pay for health-care costs (premiums and out-of-pocket expenses) in retirement, and more than $550,000 if the couple lives to age 92.
What's even more depressing is that neither the EBRI nor Fidelity estimates factor in the cost of nursing homes, long-term care or assisted-living facilities, or home health aides. And those costs are staggering.
According to the MetLife Mature Market Institute, it costs $69,000 per year for a semiprivate nursing-home room, $35,628 per year for a unit in an assisted-living facility, $19 an hour for a home health aide and $61 per day for an adult day care center. Where's that money going to come from?
Retirement expenses
Retirees and would-be retirees are also right to fret about maintaining their standard of living. Consider, for instance, these numbers: The median household income (half above, half below) in America is $48,451 and the average is $65,527, according to the U.S. Census Bureau. But in retirement, income falls dramatically.
The average total income for those 65 and older in America is $25,610, and the median was a meager $16,770, according to EBRI Notes. That means retirees are living on roughly one-third of their preretirement income. And that's a far cry from the 70% to 80% income replacement experts suggest Americans need to maintain their preretirement standard of living.
Besides not having the income to maintain a similar standard of living, retirees will face expenses that are certain to rise faster than the average rate of inflation.
Consider, for instance, the results of the 2002 Consumer Expenditure Survey. On average, retirees spent 32.6% on housing, 14% on food, and 13% on health care. But that's the average. What's interesting is the degree to which money spent on health care in retirement changes over time.
For instance, those 55 to 64 spend 6.8% on health care, those 65 to 74 spend 11.2% and those 75 and older spend 15.1%. That percentage rises in part because the cost of health care is rising twice as fast as the core rate of inflation (less energy and food), 5% vs. 2.3%, according to the U.S. Bureau of Labor Statistics. But it also rises because older retirees tend to spend more on health care than younger retirees.
Source of retirement income
So where do retirees get their income once in retirement? Again, the numbers are depressing (and deceiving). On average, retirees get 39.8% from Social Security, 23.7% from earnings, 19.4% from pensions and annuities, 15.4% from assets (IRAs and the like) and 1.9% from other sources, according to EBRI Notes.
But the composition of the income changes dramatically based on income. Retirees in the bottom fifth of income, those with less than $8,261 in 2006, got 87.6% of their income from Social Security while those in the top fifth of income, those with greater than $34,570, got 36.4% from earnings, 22.6% from pensions, 20.5% from assets, and just 18.5% from Social Security.
The moral of story
If you are among the 150 million who are not saving for retirement, now would be a good time to do so. If you are among the 50 million who are saving for retirement, now would be a good time to save more.
If you are among those who aren't worried about health-care costs, inflation or maintaining a standard of living in retirement, now would be a good time to start worrying.
If you are among those who worry about retirement risks, now would be a good time to do something about it: Set aside money for health care, for instance.
And if you are among those who don't know what your sources and composition of retirement income will be, now would be a good time to figure that out. After all, waiting to see how things might work out isn't the world's best plan.
Robert Powell has been a journalist covering personal finance issues for more than 20 years, writing and editing for publications such as The Wall Street Journal, the Financial Times, and Mutual Fund Market News.
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