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How China politicizes its economy
Paul Lin

On May 24, China's Taiwan Affairs Office spokesman, Zhang Mingqing, said that cross-strait exchanges are economic issues and should not be politicized. But he also said Beijing does not welcome Taiwanese businesspeople to make money in China and support Taiwan independence at home.

As a consequence, the international edition of People's Daily on May 31 directly called Chi Mei Group Chairman Hsu Wen-lung "an acknowledged pro-independence heavyweight in Taiwan's businesses circles." On June 2, Xinhua News Agency continued to attack Hsu by running a story more than four thousand words long to criticize him that had originally published in 2002 by Peng Weixue, a scholar at the Institute of Taiwan Studies at the Chinese Academy of Social Sciences.

Peng condemned Hsu using the vocabulary of the Cultural Revolution, calling him a disgrace to the people for claiming that many "comfort women" became military sex slaves voluntarily. Later, on May 3, Taiwan's stock market plunged as some Chinese scholars discussed the issue of economic sanctions on Taiwan.

Yet a Taiwan Affairs Office official had said on May 2 that in the near future, China would no longer specify by name those who are "green [pro-Taiwan independence] Taiwanese businesspeople." Zhang also pointed out on May 4 that he had heard nothing about the alleged tightening of reviews of Taiwan-ese investment applications, nor had he read any similar reports about Chinese actions on this matter. Obviously, China was worried that harsh accusations and sanctions could damage Taiwanese businesspeople's confidence in making investments there, and therefore damage China's economy.

In fact, legal investments by both blue and green Taiwanese businesspeople have contributed to China's economic develop-ment. But rumors about sanctions on Chi Mei are still everywhere.

The above situation reflects two problems. First, Zhang's remarks were self-contradictory. Wasn't his statement that Beijing does not welcome pro-independence Taiwanese businesspeople political interference with the economy? Second, both People's Daily and Xinhua News Agency are China's mouthpieces, and the Taiwan Affairs Office is a government agency, while other media are under tight control. We cannot ignore their messages. Nor can we ignore the differences among the messages caused by China's internal power struggles. Nevertheless, Beijing's intentions to interfere with the economy through politics and affect politics through the economy are obvious.

This is not the first time China has done this. The Chinese media came up with a list of green Taiwanese businesspeople in China when President Chen Shui-bian () was first elected in 2000. Rumor also had it in March 2001 that Hsu's factories in Zenjiang, Jiangsu Province, were forced to shut down. Similar cases have repeatedly happened, proving that China's communist party is still driven by politics, and that China is far from globalization. Because of this, such oppressive policies against Taiwanese businesspeople for political reasons will constantly occur to different degrees. Taiwanese businesepeople in China have to take necessary preventive measures.

When this problem occurs, we must appeal to the international community -- including the WTO, APEC and the International Court -- to seek justice.

China did not impose any additional political requirements when it first attracted foreign businesses, but it has added political requirements now. Its "market economy" is clearly a piece of deception directed by and acted upon by the Chinese government. If it can gain its purpose by pressuring Taiwanese, Beijing can surely do the same to American, Japanese and other businesspeople in the future. In that case, what free and fair market competitiveness can we have?

China has recently striven to gain the status of a "full market economy." But Assistant US Secretary of Commerce for Import Administration James Jochum says that China has years to go before it can receive this status, as the US Trade Act stipulates fundamental reforms of its currency policy, labor rights and government interference in the private sector. China's threats against Taiwanese businesspeople were certainly this sort of government interference in the economy.

Although Beijing is unable to gain this status from Washington, Malaysia surprisingly granted China full market economy status in a joint communique when Malaysian Prime Minister Abdullah Ahmad Badawi visited Beijing in late May. It's evident that China has thus tried to cover up its vicious image and actions.

Recently announced Chinese personnel appointments indicate whether or not China is a full market economy. Consider the appointment of Jiang Chaoliang as the chairman and party secretary of the state-owned Bank of Communications, and of Zhang Jianguo as the bank's president and deputy party secretary. Which market economy would appoint party secretaries to lead its enterprises? Isn't a party secretary in such a position a symbol of political interference with the economy?

Taiwanese businesspeople should take this into account when making investments in China. If Beijing repeatedly carries out economic threats against Taiwanese businesspeople, the government should also help them to seek assistance from international organizations.

Paul Lin is a political commentator in New York.

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