Roberto Abraham Scaruffi

Weekly Report from Taiwan Security Research (Jun. 27, 2010)

For full text, click on the title or visit the TSR web page at taiwansecurity.org

ECFA and Cross-Strait Issues

Taipei, Beijing to Hold ECFA Preparatory Meeting
(Taipei Times, Jun. 23, 2010) Taipei and Beijing will hold a preparatory meeting in Taipei tomorrow to iron out final differences on an economic cooperation framework agreement (ECFA) before top negotiators from both sides meet next week to sign the deal.
Taiwan and China to Sign Landmark Trade Deal on June 29
(Reuters, Jun. 24, 2010) The economic cooperation framework agreement (ECFA) would see tariffs cut on some 540 Taiwanese products bound for China and about 270 Chinese products exported to Taiwan, said sources and media reports.
Early Harvest Lists Finalized at ECFA Meet
(China Post, Jun. 25, 2010) As many as 539 Taiwanese products and services are placed on the “early harvest list” to enjoy tariff cuts or market access treatment under the cross-strait ECFA, more than double the corresponding figure of 267 Chinese products and services.
Taiwan Trade Pact with China Fires Up Protesters
(LA Times, Jun. 27, 2010) Tens of thousands of Taiwanese marched on the streets of Taipei to protest a trade agreement with China that is being called the most important deal between the two sides since they split after a civil war ended in 1949.
Talk of the Day—Is ECFA ‘Vitamin’ or ‘Poison’ for Taiwan?
(CNA, Jun. 23, 2010) Japanese management guru Kenichi Ohmae said in Taipei that the imminent cross-Taiwan Strait economic cooperation framework agreement (ECFA) will be a "vitamin" for Taiwan's economy.
Ma to Address ECFA Era Strategy
(CNA, Jun. 27, 2010) President Ma Ying-jeou described a soon-to-be-signed cross-Taiwan Strait ECFA as a major step in the transformation of Taiwan's economy and said he will address the nation's global economic strategy in the ECFA era on July 1. China and Taiwan to Hold Oil Spill Contingency Talks
(AFP, Jun. 21, 2010) The talks in Taipei, the third of their kind, could pave the way for exercises mobilising personnel and equipment from the two sides, an environmental official said.
Taiwan Should Alter China Strategy: Japanese Expert
(CNA, Jun. 22, 2010) Taiwan needs to focus on logistics and other professional services in China as the country will soon lose its advantage in capitalizing on cheap Chinese labor due to wage hikes and a stronger Chinese yuan, a visiting Japanese corporate strategist said.

RMB Issues and U.S.-China Engagement

Rise in Value of Currency to Be Slow, China Insists By Keith Bradsher (New York Times, Jun. 20, 2010) A day after announcing that it would allow a more flexible currency, China said that any appreciation in its value would be gradual.
China to Create More Channels for Yuan Use, Central Bankers Say
(Bloomberg, Jun. 26, 2010) China must create more channels for investors and companies to use the yuan if it wants to internationalize the currency and put it on a par with the yen and the euro, central bank officials and economists told a forum in Shanghai.
Shangri-La Dialogue Highlights Tensions in Sino-U.S. Relations By Ian Storey (China Brief, Jamestown Foundation, Jun. 24, 2010) The SLD shone a spotlight on growing U.S. wariness at Chinese policy toward the contested Spratly Islands, and revealed how the South China Sea disputes have become a sticking point in Sino-U.S. relations.
Obama, Hu Seek to Rekindle Ties as G20
(AFP, Jun. 26, 2010) China's President Hu Jintao has accepted an invitation to make a state visit to the United States as he and President Barack Obama sought to end months of distrust, despite lingering tensions.

PLA and Military Balance

Reorientation of China’s Armed Forces: Implications for the Future Promotions of PLA Generals By Joseph Y. Lin (China Brief, Jamestown Foundation, Jun. 24, 2010) Against the backdrop of the PLA’s stated intention to reorient the armed forces as part of its modernization efforts, an analysis of promotion patterns of the 118 PLA generals (1981 - 2009) may yield important insights into the foci of PLA force transformation.
Taiwan Sends Aircraft to U.S. for Upgrade
(AFP, Jun. 23, 2010) Taiwan's defence ministry said it has shipped two Hawkeye early warning aircraft to the United States to boost their capabilities.
Taiwan: Hawaii, Jamaica or Cuba? By James Holmes(Taipei Times, Jun. 24, 2010) A navy made up of small craft that nimbly shift from side to side, finding refuge and supplies in numerous coastal sites, could defy a Chinese offensive for long enough to matter.

Taiwan's Domestic Issues

Survey on President Ma Ying-jeou’s Approval Rating
(GVSRC, Jun. 21, 2010) 28.4 percent of the respondents were satisfied with President Ma’s performance while 55.6 percent were dissatisfied.
What Hong Kong Election Reform Tells Taiwan
(Editorial, Jun. 27, 2010) Decision makers from both the pro-China and pro-independent sides in Taiwan should give another look to Hong Kong's election reform to better understand China and devise smarter ways to deal with the People's Republic.

China's Rise and Domestic Issues

PRC Unlikely to See Wage-Price Spiral: World Bank
(Reuters, Jun. 19, 2010) China's economic prospects remain good despite the frailty of the global recovery, while a spate of big pay increases is unlikely to touch off a wage-price spiral, the World Bank said.
China Takes Hands-off Approach to Labor Strikes By Tini Tran(AP, Jun. 25, 2010) Boosting wages fits in with Beijing's strategy of closing the income gap and promoting more equal growth in coming years, said an analyst at the Chinese Academy of Social Sciences' Institute of Political Science in Beijing.
China’s Export Economy Begins Turning Inward By Edward Wong(New York Times, Jun. 25, 2010) Chinese officials now see the millions of poor workers as the linchpin of China’s move away from a lopsided economic model that relies too heavily on foreign consumption.

Japan Policy

Japan Extends ADIZ into Taiwan Space
(Taipei Times, Jun. 26, 2010) Japan has extended its Air Defense Identification Zone (ADIZ) so that it now overlaps with sections of a zone controlled by Taiwan.