Zhibin Gu: China vs Taiwan vs global financial crisis: challenges vs opportunities : Miami IMC

coming war or peace for Taiwan and China: a powerful way to aviod war and move toward peace:

China and the New World Order:

How Entrepreneurship, Globalization, and Borderless Business are Reshaping China and the World (Book Excerpts)

by George Zhibin Gu
Foreword by William Ratliff
Publisher: Fultus; 248 pages

Part VI
The Taiwan Issue: Current Affairs and Trends

SUMMARY

A peaceful resolution between Taiwan and mainland China is one of the most pressing issues China faces. There are no easy solutions. The problem is made worse by the fact that it involves huge international interests; this tends to cloud the situation.

However, the picture is fast improving today as economic ties are being created and vast human interactions between the two parties are occurring. In this fast-changing environment, one very realistic resolution would be a federal system, which could produce win-win results. This federal alternative has a solid foundation in the ever-increasing economic and human ties across the strait. Furthermore, it would lead to a peaceful and productive outcome in a global context.

Currently there is also increased political feasibility for this outcome. Under the federal approach, the island of Taiwan could gain enormous advantages. For China as a whole, this approach would also provide a solid foundation for fundamental progress. Furthermore, it would promote stability and long-term peace for the region and beyond.

Chapter 21. Federation: The Best Choice for Taiwan and Mainland China

The realities between Taiwan and mainland China are "economically hot, politically cold." Their ever-increasing economic ties demand far better political relations, not to mention other things. A federation would seem to be a highly feasible solution. Economically, the time is right; politically, it is only a few steps away.

A federal system would mean more autonomy for Taiwan than Hong Kong and Macau enjoy. For Beijing in particular and China as a whole, it would mean the revolutionary concept of a unified China with multiple power centers.

Under a federal system, the island would keep its own government, military, judicial, and other systems. Its political leadership would not bow to Beijing. In short, the relationship would be a political partnership between equals. Both political entities would be subject only to a “federation” law. And anything is open for discussion under the "one China" principle.

Taiwan's Love Affair With the Mainland

Economically, Taiwan and mainland China are well connected. The mainland is Taiwan's biggest trading partner as well as its number-one export market. In 2004, total cross-strait trade reached U.S.$61.6 billion, a jump of 33.1% over 2003; of this, Taiwan's exports accounted for $45 billion, by Taiwan's own accounting.

Besides ever-increasing trade, investment is another major activity. In 2004 alone, Taiwan Inc. invested $6.94 billion in the mainland. Officially, Taiwan's total investment stood at about $60 billion by 2005. By some estimates it is $100 billion or more. This discrepancy in numbers is the result of numerous government restrictions on Taiwanese investment in the mainland; many members of Taiwan Inc. may go to the mainland from a third location. One popular way is via tax-shelter islands.

Behind the ever-increasing trade is an ever-increasing tide of investment from Taiwan Inc. The mainland, Taiwan’s biggest destination already, now has over 60,000 Taiwanese enterprises. It also has more than 1 million Taiwanese residents. Shanghai alone has more than 300,000 Taiwanese residents. Fujian, Guangdong, and Beijing, among other places, also have huge crowds of Taiwanese residents.

In general, living and working opportunities in the mainland will only increase for the Taiwanese residents, as there are more opportunities for them there. Some surveys show that the majority of educated Taiwanese youth are interested in living and working in the mainland.

...

Chapter 22. Taiwanese Business in the Mainland

The ongoing business and human flows from Taiwan to the mainland are both natural and inevitable. They follow from the basic economic principle: Humans go where opportunities lie, and so does capital.

To date, Taiwanese businesspeople have made strides in the mainland, with impacts of many dimensions. For one, they have helped to integrate the island’s economy with the mainland’s in all sorts of ways. For another, they have gained huge room for growth. In addition, they are helping to foster a new environment for a possible peaceful resolution of the unity issue.

A Vibrant Taiwanese Force

In the current era, the Hong Kong and Macau business communities went to the mainland far sooner than their Taiwanese counterpart, but the reasons were exclusively political. For Taiwanese residents, traveling to the mainland has been allowed only since 1987. Quickly, cross-strait life changed dramatically. By now, Taiwanese businesspeople have made as much of a mark in the mainland as those from Hong Kong and Macau.

Why has Taiwan Inc. put such huge capital into the mainland despite all the political tensions? Their motive is simple: The mainland offers immense opportunities, much greater than those on the island. Indeed, the early birds have already benefited greatly, which has hastened the rush.

As with their Hong Kong and Macau counterparts, the greatest strengths of the Taiwanese businesspeople come from their vast numbers. Today, most Taiwanese players are small and medium-sized companies. They cover all economic sectors, ranging from consumer products, real estate, and retail to IT and equipment manufacturing.1

These Taiwanese companies are mostly niche players, but they have numerous advantages. They are aggressive and flexible and are quick learners. Being Chinese, they can adapt to the mainland environment very quickly and effectively despite the different political surroundings. The explosive growth in the mainland market has become a new profit and growth haven for them.
...

This book consists of 26 chapters, which are organized into eight parts:
I. China’s New Role in the World Development

Ch 1. China's social changes vs tourism
Ch 2. Whose 21st century?
Ch 3. Go east, young man!
Ch 4. Everyone in the same boat
ch 5. Power and limits of later developers

II. The Yuan, Trade, and Investment

ch 6. China's competitiveness vs rising yuan.
ch 7. Where to invest your money?
ch 8. Behind a rising yuan
ch 9. Beyond textile trade wars

III. China’s Fast-Changing Society, Politics, and Economy (in light of Chinese and global history)

ch 10. Lessons from Shenzhen, China's new powerhouse.
ch 11. Hunan province: from red state to supergirl and superrice.
ch 12. A revolution of Chinese professions
ch 13. What is the Chinese bureaucratic tradition?
ch 14. Why does Beijing want to reform?

IV. China’s Banking, Insurance, and Stock Market Reforms

ch 15. The explosive insurance market
ch 16. Chinese banks on the move, finally.
ch 17. lessons from China's stock market.

V. Chinese Multinationals vs. Global Giants

ch 18. The coming of age of Chinese multinationals.
ch 19. Behind Chinese multinationals' global efforts.
ch 20. China's technology development.

VI. The Taiwan Issue : Current Affairs and Trends (federation as an alternate way for unity)

ch 21. Federation: the best choice for Taiwan and mainland China.
ch 22. Taiwanese businesses in the mainland.
a vibrant Taiwanese force.
Hightech.
Other sectors.
What is the next?
Will Spring follow winter?

VII. India vs. China : Moving Ahead at the Same Time

ch. 23. China and India: can they do better together?
ch 24. Uneven development: India vs China.

VIII. The Japan-China Issue : Evolving Relations in Light of History

ch 25. Japanese business in China.
ch 26. Japan's past aggressions vs current affairs.

Author George Zhibin Gu is a journalist/consultant based in China. He has written three other books: 1. China’s Global Reach: Markets, Multinationals and Globalization (Fultus, 2006); 2. Made in China: National and Business Players and Challengers under Globalization and Capitalism (English edition forthcoming, 2007); and 3. China Beyond Deng: Reform in the PRC (McFarland, 1991)