Wild Accusations of "Chinese Capital" and "Red Enterprises"
China Times editorial (Taipei, Taiwan, ROC)
February 10, 2011
Recently the Liberty Times published a series of news reports. It referred to the head of the Want Want Group as "a Taiwan businessman named Tsai, heavily reliant on Chinese capital." The Liberty Times has repeatedly leveled wild accusations of "Chinese capital" and "Red enterprises." It has given the public a grossly misleading impression. Its conduct is reminiscent of the Cultural Revolution or the White Terror. We feel compelled to clarify the matter for the public, and to refute the distortions created by the Liberty Times.
Strictly speaking, so-called "Chinese capital" refers to strictly controlled Mainland government funds. The most obvious source of "Chinese capital" is of course, Mainland government funds. The next most obvious source is funds from state-owned enterprises. Other sources are less obvious. Most of the funding for some family enterprises may come from the private sector. But some funding may come from the government or state-owned enterprises. Other businesses derive no capital whatsoever from the Mainland government or state-owned enterprises. They merely sell their products on the Mainland. Yet the Liberty Times classifies even their profits as "Chinese capital." This is unheard of. The Liberty Times is the only entity in the world that defines "Chinese capital" in such an absurd manner.
According to the Liberty Times' novel definition, all Taiwan is under the shadow of "Chinese capital." Over 1600 companies are listed on Taiwan, Nearly 1000 have been plants on Mainland China. Technology companies account for nearly 90%. In the past, most Taiwan businessmen investing on Mainland China merely took advantage of the Mainland's cheap land, cheap labor, and other production factors. They manufactured export-oriented products, and turned the Mainland into the "world's factory." But in recent years the Mainland has undergone a transformation, to the global market. Private sector consumption has skyrocketed. All Taiwan-funded businesses have substantially increased their presence in the Mainland domestic market. These companies make money from the Mainland market. According to the Liberty Times' absurd definition, they have all become "businesses heavily reliant on Chinese capital."
These companies earn money selling products on the mainland. Back on Taiwan, they pay dividends to the investing public. Members of the public pay taxes on their dividends. The salaries of everyone in the government, from President Ma at the top, to civil servants at the bottom, come from government revenues. Therefore, according to the Liberty Times unique definition of "Chinese capital," President Ma and every civil servant on Taiwan is funded by "Chinese capital."
Taiwan-funded enterprises have grown strong on the Mainland. They have won a large market share. The public on Taiwan approves. Initially such success stories applied only to Taiwan's small and medium enterprises. The Chicken King grew strong on the Mainland. The Ting Hsing Group had a small food factory in Changhua. It became the largest instant noodle brand on the Mainland. Taiwan's RT-Mart invested heavily in Mainland China for ten years. It has now surpassed French retail giant Carrefour, and become the number one discount store on the Mainland. Others include Taiwan funded service sector industries, Daphne shoes, Natural Beauty, Les Enphants, Ou Difen Kelisiting lingerie, Christine bakeries, 85 Degree Centigrade coffee shop, Yonghe Soybean Milk. These and other large and small enterprises built their own brands on Mainland China. They created new business empires. After establishing themselves on the Mainland, these businesses returned to Taiwan to invest, or list on the Taiwan stock market, allowing investors on Taiwan to share in the profits.
Take global computer brand Acer, "the pride of Taiwan." Acer made a concerted effort to develop new markets on the Mainland. By the end of last year, it was number two in personal computer sales on the Mainland. One can hardly say that Acer made little money on the Mainland. According to the Liberty Times definition of "Chinese capital," Acer is also funded by "Chinese capital." Acer's sales pitch is highly flexible. On the Mainland, Acer stresses that it is "the pride of the Chinese people." It stresses that it is an "international brand, with local values." According to the Liberty Times' closed minded, inward looking definition of "local values," Acer's sales pitch amounts to "selling out Taiwan." But since cross-Strait financial liberalization, the [連合庫] and other public financial institutions have established branches on the Mainland. They are beginning to earn Mainland dollars. According to the Liberty Times' definition of "Chinese capital," aren't these state-owned banks under the influence of "Chinese capital?" Is the Liberty Times' view of the world reasonable and convincing?
The main business of the Want Want Group's Ilan Food Division is rice crackers. It is a 100% Taiwan owned enterprise. During the 90s it began investing in the Mainland, After 20 years of hard work, it successfully captured the hearts of Mainland consumers. After establishing a firm foothold on the Mainland, it returned to Taiwan to invest in the media. It issued TDRs. During 20 years of development, it never received a penny from the Mainland authorities or state-owned enterprises. All of its income was derived from the sale of products in the Mainland market. It returned to Taiwan to invest in the media. Its sources of funding have been closely scrutinized by the government. No "Chinese capital" is involved.
The Liberty Times however, has turned a blind eye to these facts. It persists in leveling risible allegations of "Chinese capital" against the Want Want Group and other businesses that have achieved success in the Mainland market. It persists in painting them as "Reds." It persists in misleading the general public. We are puzzled. These companies work hard. They develop new markets. They earn money from the locals. They send the profits back to Taiwan, to invest in new businesses, Do they really not "love Taiwan?" Do their actions really represent "domination by Chinese capital?" Others shut themselves up on the island of Taiwan. The engage in land speculation. They inflate real estate prices. They profit from local Taiwanese. They make it impossible for ordinary office workers to afford their own homes. Do they really "love Taiwan?" What right do such businesses have to accuse others of being "Reds?" What rigth to they have to accuse others of "domination by Chinese capital?"