In Chapter 6 Riggers discusses the progression of Taiwan’s economic investment in China. She promotes Taiwan investors as being savvy because they kept investing in China in the 1990s when other foreigners limited their investment (P.121). Riggers sites key decisions made by Taiwanese businessmen, such as moving machinery to China, leasing land and hiring Taiwanese workers. Though all sound practices, she does not give enough comparison to how other foreign investments played out. It would make for a better argument if we have additional stories of foreign investment to examine and determine how Taiwanese entrepreneurs did in comparison.

Riggers also downplays other advantages Taiwanese businessmen had over other foreign investors (P.121). While the two share a common, but also controversial history, the Taiwanese have a working knowledge of the customs and language of the Chinese. Though there would be some problems communicating between Mandarin and Cantonese, the Taiwanese would understand and could perform certain culturally appropriate greetings and social interactions. Additionally, Taiwanese investors could scrutinize any and all paperwork and negotiate for more favorable deals. Lastly, their knowledge of the geographic terrain helped them to select prime locations to establish their businesses. For example, Riggers explains that the Taiwanese chose to set up businesses in Dongguan due to its proximity to Hong Kong and ability to do business with foreign investors (P.121).

Despite these advantages, many Taishang faced unscrupulous partners, competitors and officials (P.126). Doing business in China seems extremely competitive as explained in our Baidu meeting and exemplified by the defenestration of Google. The Taiwanese have proved pragmatic enough to establish and continue to do business with the mainland in light of the political challenges they face (P.127).
edited by jalves on 7/23/2015
edited by jalves on 7/23/2015

Chapter 6

Taiwans’s investment model in China from the 1980’s to the present has been largely the same. Taiwanese move production facilities and suppliers to the mainland and hire local labor. Taishang (Taiwanese entrepreneurs) incorporate Chinese officials, business partners, and local labor into relationships of mutual benefit. By controlling the supply chain Taishang control quality. One important change to the model is the type of businesses Taiwanese invest in, and the scale of these operations. Initially Taiwanese firms in China were small to mid-sized manufacturers of textiles, plastics, toys, etc. Larger companies located in China in the next wave of investment, food and petrochemical manufacturers for example. The third phase of investment was information technologies (IT). China offered opportunities for Taiwanese manufacturers to grow large enough to market their own brands rather than just fill contracts for other companies. Acer (the first PC I purchased for my family) and ASUS are two Taiwanese computer companies born in this phase. The scale change meant Taiwanese businessmen had to develop new skills to manage companies with thousands of employees.
Taiwan gained an insurmountable business advantage in China in 1989 after other international investment dried up in the aftermath of the disturbing events in Tianamen Square. Taishang have moved so much manufacturing to China the Taiwanese government is concerned about ‘Hollowing Out”. The other grave concern is that the growing economic dependence of Taiwan on China will make it vulnerable to political pressure from Beijing. Cross straight economic benefits are not one sided. China benefits too. Taiwanese businesses employ hundreds of thousands of Chinese and contribute greatly to the tax base. I have a sneaking suspicion that the mammoth furniture stores we saw in every Chinese city we visited were Taiwanese.

Chapter 7
The concept of the China inside, China outside deals with the threats to Taiwan’s existence. China outside is fairly obvious. The PRC has been very vocal and demonstrative in its goal of bringing Taiwan under its control. The rhetoric combined with military exercises preparing for an invasion of Taiwan leave no doubt of about the PRC position. The China within refers to the threat posed by factions within Taiwan. There has been resentment by indigenous groups and native Taiwanese against the mainlanders who have controlled the island since 1945. It is important for Taiwan to speak with one voice and view themselves as one people in order to cultivate allies that can help them defend against the China Outside. Lee Teng-hui set out to solve the problems posed by the China within when he became president in 1996. He began by establishing the people’s rite to directly elect their representatives, and developing a shared vision of Taiwan focusing on new freedoms, democracy, and prosperity. He worked to transfer internal dissatisfaction to the China outside. The next step was to aggressively pursue diplomatic channels to cultivate international friendships, and raise Taiwan’s profile in the world. Proponents of Taiwan’s independence feel Taiwan can’t reach its full potential unless it declares itself independent and takes the consequences. Shih Meng-teh’s belief is that “independence should be discovered not declared,” His argument that the freedom and democracy Taiwan already experiences is sufficient has been embraced by most Taiwanese. I believe extreme positions lead to violent conflict. It is always better to move slowly and let things evolve. Taiwan is already a defacto nation. There is no need to rock the boat. Chen Shui-bian's Five No's were no declaration of independence, no special state to state relationship in the constitution, no elimination of national unification guidelines, and no referendums on independence or unification. Ma Ying-jeou's Three No's are no unification, no independence, and no armed conflict. Ma’s no’s are very similar but less specific. The one no that is different is no armed conflict. This is in response to Beijing sabre rattling. Foreign policy is a little like writing emails (never say anything more than you absolutely need to because it can come back to burn you) so the least said the better.
edited by karenrieger on 7/26/2015

I think it's interesting how China inside and China outside exist. Taiwan was never truly free from China in its existence. Today it has done well for itself, cornering the tech manufacturing market, becoming semi-self sufficient in industry, infrastructure and government organization. However, intertwining itself in the mainland kind of reminds me of countries joining the EU, in which some countries benefitted, and some countries suffered due to the economic co-dependency.

How important is Taiwan to China's economy? How important is China to Taiwan's economy?

It is difficult to determine if China is more dependent on Taiwan or Taiwan on China. Throughout the years, they have both needed each other in order to prosper economically. China provides low manufacturing costs and land for factories, while Taiwan provides trendy and high tech products. Rigger mentions that while the Taiwanese were able to take advantage of several opportunities, “Taiwanese paid for their opportunities in China with everything from “voluntary” contributions to local charities to “jobs” for local officials”. (p.122) At the moment, the economic relationship seems to be equally important for both as they are dependent on each other. Rigger also mentions that “As the demand for electronic goods assembled in China grows, the demand for electronic components manufactured in Taiwan grows, too." (p.127)

What, if any, Taiwanese brands or companies did you see during our visit in China?

Other than HTC brand, I am having difficulty remembering Taiwanese Brands during our visit to China. I believe that part of the reason is that the language barrier made it difficult to remember names or many things. At least it did for me. The fact that most of the signs had English translations in Taiwan made it easier to remember names of brands, places, and streets. During our visit to Taiwan some of the brands that stood out to me were Aeon (scooters & minibikes), Adly (Scooters & quadbikes), Merida Bikes, SYM Motors (motorcycles, motorized scooters, and automobiles), EVA air, China Air, Evergreen Marine (Shipping and Transportation), Formosa plastics, Golden Emperor International LTD / GeIL (Ram, flash drive), Taiwan Mobile, Taiwan Electric, Bank of Taiwan.
edited by malvarenga on 8/3/2015