Ohmae on Taiwan

Kenichi Ohmae, ex-McKinsey partner and business strategist, visited Taiwan recently. His view
  • Many political leaders in Taiwan, lack a world outlook. They should give up their idea of the rule of ideology and pay more attention to Taiwan's economic development...
  • Ohmae said he never believes China would attack Taiwan. "If it did," Ohmae was quoted as saying, "the Chinese economy would die, because its driving force and bursting power are dependent on the management of Taiwan businessmen (in China).
    "President Chen seems unaware of this relationship, and instead believes the Taiwan businessmen are helping the Chinese mainland.
    "As a consequence, he has adopted a policy of confrontation.
    "That is a passe idea."
The cost for a strait war is indeed too huge for the mainland, and for the CCP regime, as economy is where its "legitimacy" is based on. This is not only because of the retreat of "business management and technology" of Taiwan investment in the mainland. It is about the general political uncertainty for everybody who is doing business with mainland China today.

Too bad CSB refuses to see this simple truth. It is appalling how ideology can blind one's common sense.


Siegfried said...

I guess CSB has only his and DPP's political interests in his mind. He won the elections using the ideology issues, and he won't give it up easily. Is CSB unaware of the relationship said above? I don't think so.

Sun Bin said...

That is also what I think.
so i carefully used the word he 'refuse to see', instead of 'failed to see'.
i could also say he 'chose to ignore'.

He does not put the interests of his people above that of his ideology/political interests. This is why I dispise him.
(I had thought very highly of him when he ran and won the mayor of Taipei back in 1994)

Michael Turton said...

ROFL. As Lee Tueng-hui pointed out, the S Koreans kept all that investment at home, and as a result, they are doing much better than Taiwan in trade with China. In the meantime Taiwan's income inequality worses, its capital is developing its worst enemy instead of building its own economy, and it performs more poorly than S Korea. Sure.

Investment in China is a really stupid idea, from every perspective.

Too bad CSB refuses to see this simple truth. It is appalling how ideology can blind one's common sense.

Look in the mirror, Sun Bin. If you weren't blinded by this irrational hatred of Chen that seems so prevalent among the pro-China crowd, you'd see that he and similarly-minded politicians are trying to save the island from being hollowed out and destroyed by China, as was LTH before him.

As for the idea that economic development is going to prevent an attack by China on Taiwan, that too is laughable. Tight economic integration has never prevented wars in the past, and isn't going to prevent one today. There's nothing more naive than a Realpolitik type who thinks that because he's a hardass he must be right.


Sun Bin said...

I saw your Lee Tenghui article. LTH has no credibility to me, regarding economic matters. He has a clear political agenda. (I do respect his contribution in Taiwan's democratization, however. In addition, Lee Tenghui has done a better job than CSB, partly because he is more experienced and he has to yield to the pro-blue camp inside KMT then)

If you really look at the numbers. LTH is wrong. SK invested as much as Taiwan in mainland China, esp in the past 5 years. In addition, SK let its business to decide what to invest and what not. SK's cost when investing in China is also much lower (direct flight, no govt harassment, e.g.)

1. you are wrong about my opinion on CSB. I was an admirer of him when he was and before he was elected Taipei mayor. I told my friends in Taiwan I wished him win and wanted him win in 1994 - my friends, many pan-green, were more pessimistic than me back then.
again, i maintain my judgment. CSB let his personal (political) interests blurred his decision, and put the interests of the people lower in his list. therefore, this makes him just any selfish politician, no different from Lien Chan or James Soong, both of which I also dispise.
2. economic development. yes, it will greatly reduce the motivation for conflict. i am not jsut talking about economic relationship across the strait. i am talking about the general integration of China's economy into the world.

Patrick Tan said...

The British Empire was the world's largest overseas investor in the 1900s, known as the "World's creditor". French investment was huge in Russia in the 1890s right up until 1914. No economic malaise in either Britain or France in the Victorian or the Edwardian era. To assert that overseas investment kills ones own economy is a rather baffling position and shows a woeful understanding of economic issues. Stronger profits for Taiwan companies and business can only be a boost to Taiwan's economy, leading to greater government revenue, greater employment, and will have the added beneficial effect of avoiding the structural unemployment which is bound to come with a policy of protectionism and shielding domestic industry from competition.

"Tight economic integration never prevented wars?" Ahem, the European Coal and Steel Community? Germany is not about to attempt annexation of Alsace-Lorraine for its iron deposits, and France won't attempt to claim the left bank of the Rhine precisely BECAUSE THESE RESOURCES ARE NOW SHARED AMONGST THE MEMBER STATES OF THE EU. It would be mad folly for the European states to go to war with each other now, as this would harm all their economies. The assertion that economic integration failed to prevent 1914-1918 has been made, but it should be noted that two key differences distinguish this century and the last. 1) Economic integration is now at an unprecedented level, with countries becoming more and more specialised in producing things in which they have "competitive advantage" (contrast to the autarkic mode of thought in the early 20th century, the "Scramble for Africa" to secure resources, Japan's invasion of Malaya and the Dutch East Indies for rubber and oil, compared to trade these days) 2) The prospect of nuclear war and MAD - certainly didn't exist until 1945, and there has been no great power war since 1945.

Patrick Tan said...

In fact, to say that Taiwan investing in the PRC = helping the PRC and harming Taiwan is essentially John Mearsheimer's (professor of Political Science at U Chicago)rather zero-sum position. He thinks the USA should initiate a full scale trade embargo against the PRC. Right, and then US prices will immediately soar for common everyday goods, leading to sudden inflation, soaring interest rates, and weaker American profits. Nobody in the US administration takes him seriously, thankfully. As Johan Norberg (author of "In Defense of Global Capitalism") states, if goods and services are crossing borders, it makes it less likely that troops will cross borders. Japan post WWII is a prime example. I would assert that war was more likely between the two sides of the Strait during the Mao-Chiang era, when there was virtually no contact or integration between the two sides - an attack on one by the other would not directly affect one's economy. Certainly not the case now.

Of course the die-hard pro-independence lobby refuses to see economic truth for what it is. Fortunately most people in Taiwan seem to be more pragmatic (traditionally a Chinese trait - let's talk money) rather than ideologically based. Would people rather make money or would they ignore the largest market in the world (that not even the Americans can afford to ignore these days) and prepare for war (one that will almost certainly destroy them, regardless of whether the PRC achieves its military objectives)?

From personal experience, it seems that the most pro-independence-at-any-cost people tend to be Taiwan people who spent a lot of time in the US, or Westerners. Perhaps understandable given Americans' penchant for high minded, lofty notions of "freedom or death" - at least amongst the American populace if not the (usually more realistic) Administration. When enough people start falling (only 2600 in Iraq so far) the Americans have doubts (witness the widespread unpopularity of the Iraq occupation effort).

Talking about realpolitik, for Westerners, it tends to boils down to anti-China fundamentalism. China must not be permitted to rise or unite with Taiwan because continued American primacy depends on crushing China and keeping it down. This means keeping Taiwan firmly in the US camp. It's an unsinkable aircraft carrier on the Mainland's doorstep. Even if a declaration of independence led to a war that the US stayed out of, China's economy would suffer as many businesses would pull out and world prices would soar. All are measures that delight the American right; nothing gives them more pleasure than to derail China's rise - why else should they care about the "interests" of Taiwan, except insofar as it affects their own interests? Taiwan is just a pawn in the game of Great Power politics, a pawn that some believe can be utilised to assist in the destruction of China. Any other sentimental reasons to "back Taiwan against evil China" is essentially emotional riff-raff and fundamentalist claptrap that won't stand the scrutiny of Great Power policymakers (although the general public seems to buy it, irrelevant anyway as it doesn't make policy decisions).

Saner heads prevail amongst those Taiwanese who talk business. Money talks, bullshit walks. They can declare independence and die, or shut up, keep the ambiguity, and do business. Ted Fishman points out in "China Inc" that for the 1 million Taiwanese businessmen living in the Mainland, they are essentially already living unification - the debate is over for them.