Category Archives: China-Taiwan

Taiwan’s Opposition DPP Recovers Ground

The gains made by the pro-independence opposition Democratic Progressive Party in Taiwan’s local elections at the weekend were an eye-opener for President Ma Ying-jeou’s governing Kuomintang. Its policy of pursuing closer ties with Beijing were an issue with voters. They worry that it will make the island too dependent on China and that opening up to cross-Straits investment and trade risks local job losses, especially in small businesses. The KMT’s handling of Typhoon Morakot also harmed its vote.

Ma himself will face voters in the 2012 presidential election. The weekend’s results boost the DPP’s leader, Tsai Ing-wen, as an increasingly likely candidate to run against him and confirm her party has put its heavy defeats in the 2007 legislative and 2008 presidential elections under disgraced Chen Shui-ban behind it..

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China’s Automakers Likely To Cross Taiwan Strait For Parts

Taiwan’s three largest auto parts makers, Tong Yang Industry, TYC Brother Industrial and Depo Auto Parts Industrial, are open to investment from the mainland, Bloomberg reports. China’s car makers would get core design and manufacturing technologies they lack as assemblers and Taiwan’s parts makers would get access to on of the world’s still growing car markets. SAIC and Geely, who have acquired auto technologies in the U.K. and South Korea and Australia respectively, would be the most likely be in the vanguard of investors. Beijing lifted its ban on Taiwan investment on April 29 (see: “First Cross-Strait M&A Deals Struck“); for its part Taipei is considering opening 65 industries to mainland investment.

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First Cross-Strait M&A Deals Struck

An unsourced report in Taiwan’s Commercial Times (here via Bloomberg) says that some of the first companies on the island to offer to sell stakes in themselves to Chinese companies may include state-owned ones. Chinese companies will be able to take part ownership of Taiwanese companies, and vice versa, from the end of this week as part of the formal improvement of ties between Beijing and Taipei.

The first mainland investment in Taiwan we’ve heard of is China Mobile’s plans to take a $530 million 12% stake in Taiwan’s FarEasTone. The first known deal, however, was in the opposite direction. Taiwanese chip maker United Microelectronics says it will buy China’s He Jian Technology in a $285 million deal that will give it 85% of the company.

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Beijing, Taipei And The Diplomacy Of Art

China and Taiwan’s Palace Museums, collectively homes to the world’s best collection of Qing dynasty (1616-1911) treasures, have had informal but friendly ties for some time. Now that relations between Beijing and Taipei are thawing that relationship is getting complicated.

A weekend meeting between Zheng Xinmiao, curator of Beijing’s Palace Museum (the formal name for the Forbidden City), and his visiting counterpart from Taipei’s National Palace Museum, Chou Kung-hsin, was treated “as it involved two rival Chinese emperors themselves,” the FT reports. The two agreed some minor exchanges of staff and cooperation on academic research and publications, but didn’t take on any difficult issues such as labels.

Beijing won’t stand for anything that implies Taiwan is a independent state. For its part, Chou’s museum won’t lend anything to its Beijing counterpart without legal guarantees that it will get the artifacts back. It has a huge collection of Chinese treasures that arrived with the Kuomintang in 1949. Beijing holds that the treasures are in foreign hands and should be returned for free.

The Taipei museum will, though, be borrowing 29 artifacts from Beijing for three months for an exhibition about Emperor Yongzheng (1722-1735).  So the cultural diplomacy is at least flowing in one direction.

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Taiwan Legalizes Casino Gambling

Macau’s gaming industry, and along with it the local economy, has been flattened by the measures Beijing has imposed to limit the growth in high-roller gambling.

Now Taiwan wants in. It has approved legislation that would legalize gambling on the Penghu archipelago, a group of small islands in the straits between the Taiwan and the mainland. Chinese gamblers are its target audience. Taipei hopes they will shift Penghu’s way a big chunk of the $10 billion a year in gaming revenue that Macau generated before the restrictions were imposed.

One way Beijing has cracked down on gambling in Macao, the only region where gambling is legal, is to restrict travel there. Guangdong residents, for example, are limited to one visit every three months. Taipei is gambling that as cross-strait relations improve and travel becomes easier  there will be thousands of gamblers among the increased flow of tourists and business travelers — and that they won’t bring with them the economic distortions they caused in Macau.

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