Will Mainland Investments in Kaohsiung Harbor Really Endanger Taiwan?
United Daily News editorial (Taipei, Taiwan, ROC)
December 22, 2012
Summary: The Investment Commission recently audited COSCO Pacific, the China Shipping Terminal Development Company, and the China Merchants Group. These Mainland enterprises, together with Taiwan's Yang Ming Marine Transport, are investing four billion dollars in the Kaohsiung Harbor Container Terminal Number Six Development Project. DPP legislators immediately voiced opposition. They claimed that allowing Mainland capital in would crowd out domestic investment, and even endanger national security. They demanded that the Ministry of Economic Affairs veto the project, immediately.
Full Text below:
The Investment Commission recently audited COSCO Pacific, the China Shipping Terminal Development Company, and the China Merchants Group. These Mainland enterprises, together with Taiwan's Yang Ming Marine Transport, are investing four billion dollars in the Kaohsiung Harbor Container Terminal Number Six Development Project. DPP legislators immediately voiced opposition. They claimed that allowing Mainland capital in would crowd out domestic investment, and even endanger national security. They demanded that the Ministry of Economic Affairs veto the project, immediately.
Green Camp opposition was predictable. The dogmatic justifications they would offer for their opposition were also predictable, and revealed their ignorance of the facts. In 1999, Kaohsiung Harbor was in its heyday. It was the number three ranked container port in the world. But eight long years of Closed Door Policy under the Democratic Progressive Party dropped its ranking to number ten. Its status as an entrepot was gradually replaced by Mainland ports that were serving the factory of the world. Think for a minute. Was domestic capital really lining up all these years to invest in Kaohsiung? Had there been a surfeit of containers transiting the port, would Kaohsiung Harbor have been reduced to its current condition? The Green Camp legislators' hysteria about a "crowding out" effect is empty rhetoric. If anything, it turns the truth on its head.
Allegations about "endangering national security" are worse than alarmist. They expose how ignorant and out of touch the Green Camp legislators are about trade in the modern age. Three Mainland enterprises investing a total of four billion dollars is a pittance. It accounts for a mere 30% of the equity in Yangming Marine's Kao Ming Container Terminal Corp. (KMCT). Yangming retains overwhelming control. Moreover, KMCT has another shareholder, the U.S. Container Terminal Corporation. The project is a "Taiwan/Mainland/US joint venture." Where exactly is the "national security threat?" Over the past thirty years, Taiwan businesses have invested nearly nine trillion NT dollars in the Mainland. They have contributed to the Mainland's rapid economic rise. Today, a mere 4.5 billion in Mainland capital is coming to Taiwan. Isn't it the height of absurdity to insist that this would endanger the security of Taiwan?
The significance of the Mainland's 30% share does not actually lie in the four billion capital investment. Its significance lies in cooperation established between the two sides. Originally three Mainland enterprises wanted a 60% share in the company. But the government was cautious. It only allowed Yangming to sell a 30% share. The main reason was that many people still harbor deep-seated fears of Communism. In fact, modern multinational shipping companies use cross-shareholdings to share in each other's strongholds, or to enhance mutual cooperation. This is a common strategy when forming alliances. This was one reason Yangming first allowed U.S. terminal companies to buy in. After the three Mainland enterprises invested in the KMCT project, its vessels were granted preferential treament when transiting the Port of Kaohsiung. This enhances throughput for Kaohsiung Harbor. Conversely, Yang Ming Marine Transport's vessels enjoy preferential treatment when transiting Mainland ports. From a business perspective, this a clear case of win/win. But if one dwells on political confrontation, then the problem is insoluble.
DPP legislators voiced concerns about the inflow of Mainland capital. Ironically the Green Camp ruled Kaohsiung City Government was welcoming the investments with open arms. It was convinced that the investments would boost Kaohsiung's economy. Contrast the two mindsets. This is the difference between theory and practice. This is the difference between groundless paranoia and substantive interests. The distinction could not be clearer.
Kaohsiung is a Green Camp stronghold. The Kaohsiung City Government is fully aware that the DPP leadership has long been "anti-China." The Kaohsiung City Government also prefers to sing a different tune than the ruling Kuomintang government. But years of recession has left Kaohsiung Harbor in serious decline. It must abandon its complacent and reactionary ideology. It must seize all opportunities for development. Kaohsiung Harbor has become increasingly marginalized. Restoring its former status will not be easy. As the city government sees it, Mainland enterprises want to invest in its harbors. How can it refuse? How can Kaohsiung Harbor become competitive again? How can become an international port again? Besides, the Ma administration is working to turn Kaohsiung into a "showcase for free trade." Will Kaohsiung cling to its fears of Communism? Will it cling to rigid "anti-China' thinking? Will it veto Mainland capital investments? If so, then will not pass muster as a "free economy." It will never become a showcase for free trade.
As we can see, the Kaohsiung City Government is concerned about economic development. It is under pressure from hard economic reality. It welcomes Mainland capital. The DPP leadership talks about reforming its Mainland policy. But it simultaneously says no to anything and everything connected to Mainland China. By contrast, the Kaohsiung City Government's pragmatism deserves applause. At least it is concerned about the local economy and the people's livelihood. The DPP leadership on the other hand, cannot get past political sloganeering. This is truly sad.
Nine trillon dollars in capital from Taiwan has flowed onto the Mainland. Today, a mere four billion from the Mainland is being invested in public construction on Taiwan. Such a turning point is hardly worth celebrating. But neither do we need to become alarmed. We need to reflect. Taiwan has been undergong globalization for decades. Why is this final step taking so long? Why are opponents still so self-righteous?
2012.12.22 03:13 am