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Economic stimulus from China can carry a political cost. The Dalai Lama’s visit to comfort disaster survivors at the invitation of the opposition Democratic Progressive Party (the DPP, which favours formal independence from China, rather than the unresolved status quo), and the decision to include a film about exiled Xinjiang leader Rebiya Kadeer in a film festival in Taiwan’s second city, Kaohsiung, were followed by cancellations from mainland tourist groups. The city council initially responded by removing the film from the main festival programme, a decision subsequently reversed. Kadeer herself has been refused a visa to visit in December. Meanwhile, new prime minister Wu Den-yih has managed to give some credence to DPP allegations that his contacts with mainland-orientated Hong Kong politicians represented ‘clearance’ of his appointment by the People’s Republic. The next step in relations between Taiwan and the PRC will be the signature of a deal allowing banks from both to set up on the other side of the Taiwan Strait and permitting cross-Strait investment in existing financial institutions: most of the money is expected to flow towards Taiwan. The other big issue is the negotiation of an ‘economic framework agreement’ without which Taiwan feels it will be at a disadvantage in exporting to China compared with ASEAN rivals. The petrochemical industry is particularly worried. But mutterings about the political dangers are muted by the economic reality — almost 40 per cent of Taiwan’s export trade depends on China.
The fortunes of former President Chen Shui-bian — a DPP man and former Taipei mayor — reached a new low in September with his life sentence and £4 million fine for accepting bribes and money laundering. His wheelchair-bound wife Wu Shu-chen was sentenced to life and a £2 million fine, but will not go to jail. Chen’s children and members of his staff were also involved, but his bookkeeper escaped punishment mainly because of her help in providing computer records of the family’s expenditure. Ironically, given that Taiwan is denied membership of so many international bodies, detailed evidence of oversees accounts and companies was furnished through the Egmont group, which connects national financial intelligence units of many OECD and other countries. Taiwan is a member but the PRC is not. Media interest has for the moment settled on whether Swiss banks have acted on Taiwan’s request to freeze the $100 million Chen is thought to have placed with them.
Private sector funding of Taiwan’s new rail infrastructure hit the headlines when the government was forced to take over the running of the High Speed Rail Corporation to prevent its collapse. The corporation has a 35-year agreement to run the line but accumulated deficits after only three years threatened to wipe out its capital, while the original shareholders refused to inject new money. Passenger projections seem to have been wildly over-optimistic, but the 214-mile link between Taipei and Kaohsiung, offering a journey time of only 90 minutes, has provided the environmental advantage of replacing almost all air travel on the route. Meanwhile, the spanking new Metro in Kaohsiung is encountering similar financial problems, largely because the population prefers to use cars or scooters. Only massive roadworks can change the preference for individual mobility — and wipe out the deficit.
October saw the opening shots in a battle over one of Taiwan’s unhealthiest habits. The Department of Health proposed a levy on the sale of betel nut, often dispensed to tired lorry drivers and motorists as a mild stimulant by short-skirted hostesses from brightly lit roadside booths. Its use is ubiquitous, with an estimated 1.3 million addicts — and 2,300 deaths each year from cancer of the mouth and throat. The shallow root structure of the betel-nut tree leads to erosion of mountain slopes and increases the risk of mudslides. Taiwan took a tough line against smoking in offices and restaurants, but some ruling-party legislators have already declared the betel-nut tax unnecessary, and it will certainly be difficult to implement. The stallholders prepare their own product, mixing nuts with lime, so there are no manufacturers to collect tax on the government’s behalf, and a complete ban would leave many of these small traders destitute. Taiwan is acutely aware of the dangers of rising unemployment — currently at a record 6 per cent — and will not take lightly measures that put people out of work. I’m betting on the betel-nut girls.
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