Interview: Strait Poker: An Interview with Mainland Affairs Council Chairperson Tsai Ing-wen

The MAC chief discusses cross-strait economic and trade liberalization.

 

By Matthew Smith

Tsai Ing-wen, head of the Cabinet-level Mainland Affairs Council, discussed her views on cross-strait economic issues in an exclusive interview with TOPICS on March 11. A former professor of law, Tsai held a variety of high-level Executive Yuan posts throughout the 1990s before taking on her current position in 2000. She holds an LL.M. from Cornell University and a Ph.D. from the London School of Economics and Political Science.

Q. Taiwanese and multinational companies have long encountered difficulty in bringing their Chinese employees to Taiwan, which detracts from Taiwan's attractiveness as a site for regional headquarters. What is your response?

Actually, we have already done a lot to liberalize and simplify the process as much as possible. In the past, there was a minimum two-month period between the time of application and the time when the entry permit was actually granted. But as of January 18, the date for the submission of applications for mainland personnel to visit Taiwan was shortened to ten days prior to the intended visit. The provisions also allow for an even shorter application time of five working days in emergency cases.

At the same time, we're trying to work out a complementary regime of rules. If you have employees that need to come to Taiwan on a regular basis, we'll try to find a way for these people to come and go without going through the whole process every time they enter. Already, investment and trade professionals from the mainland area who reside overseas can be granted multiple entry visas valid for one to three years.

Q. But under the modern global business model, companies really need the ability to call a snap meeting and get their Chinese employees here the next day. Why is that not possible here?

We're aware of their concerns, and that's why we have adopted measures that allow us to deal with the process in a shorter time frame in emergency situations. But speeding the process further is a matter we will have to work out. I have suggested to my colleagues that if we have a very decent multinational company here with a track record that is in our view acceptable, then we will probably be able to allow entry of a particular Chinese mainlander. But this would require the guarantee of the multinational company here that if anything goes wrong, the multinational will take responsibility.

Q. Do the rules adopted in January still require a Taiwanese guarantor for visiting Chinese colleagues?

There is no longer any guarantor requirement for multinationals or foreign-invested companies in Taiwan who invite trade or economic professionals from China to come here.

Q. What is next on your agenda for liberalizing cross-strait flows of personnel?

As part of our WTO exercise, we will expand on our current regime in the future. Specifically, we will allow Chinese mainlanders to enter Taiwan and give them permission to engage in commercial activities. We will issue commercial entry permits to these people, and they will be allowed to stay here for a number of years. It will be like a business visa in Western countries.

Along with that, companies there will be able to send managers or higher-level personnel to work here. Of course, they will need a permit to stay for a period of time, and that is the kind of thing we are planning in conjunction with allowing Chinese investment in Taiwan.

Secondly, we are expanding the scope for local companies to bring in Chinese-national researchers and engineers from China and other countries around the world. This is something that our industry here needs, because of the shortage of engineers for our high-tech industries.

Third, we are looking at the service sectors. In the past, we only focused on human resources in the manufacturing sector, such as R&D personnel and engineers. The next step is to expand liberalization to the services sector, so that companies like banks and insurance companies will be able to bring in Chinese nationals to be their managers or high-level officers.

Q.One of the EDAC consensus recommendations was to liberalize the flow of "high-tech talent". How do you define that term?

We are trying to exercise as much flexibility as possible. It's a matter of to what extent these people are needed by our industries. And therefore, we are talking to industry officials on a regular basis in order to find out what their needs are. But of course, bringing people from China involves national security, so we have to consult with our national security people to ensure that the balance is right.

Q.What are Taiwan's security concerns about further cross-strait liberalization?

There are a lot of different considerations. For instance, in the case of trade, people know that if you allow too many goods to enter in a short time, your own industry will be impacted. In the case of outward investment, if the situation is not properly managed, you will have excessive outflows of investment, and you have to consider whether you are in a situation in which the economy will be hollowed out. If you have too many job losses here because industries are moving out, then you don't have as much economic activity on the island and the economy shrinks. These are issues of economic security that we're talking about.

Bringing too many workers from China would also cause problems. Of course, we like to assume that all of them are very good friends of our people and will not create trouble for us, but you cannot exclude the possibility that some of them may have unwanted intentions on their minds. And allowing too many Chinese citizens to enter would create a burden for our social security system. You have to give them health insurance, you need to feed them if they are unable to feed themselves - this would become a burden on the state.

Also, you have to consider whether or not you want to maintain a certain level of distinctiveness. Of course, people here are Chinese people - essentially - but you still might want to preserve a certain amount of distinctiveness. That is something that might be considered a value judgement, and you have to respect peoples' views on that. So what I'm saying is that national security is not merely a political matter, it also has social and economic aspects.

Q.Taiwan recently allowed in Chinese tourists who live outside of China, but critics say that there were still many limitations on their activities.

Some people think that the rules are a bit outrageous. But I think it's not the rules, but how they are executed. We haven't really started bringing in Chinese tourists on a large scale. So far it has only been tour groups from Japan and the United States, and the next one will probably be from the Philippines. These are small groups, and members of the groups are highly educated with pretty decent occupations. But the rules were originally designed for large groups from China.

Countries such as Japan, the United States, and Australia all have had problems with Chinese tourists not leaving the country. We need to deal with this problem of illegal immigration. Essentially, we have to ensure that allowing Chinese tourists to come will not cause problems in terms of our national and social security. So we are trying to strike a balance. On the one hand, we see significant opportunities in allowing Chinese tourists, but on the other hand we have to be particularly careful about the impact on our social security.

That's why we are opening in stages. We have already opened tourism to Chinese citizens residing in third countries. The next step will be to allow Chinese visitors who reside in Hong Kong and Macau. The third stage will be Chinese citizens from China, but this is something that is a much larger-scale operation and requires a lot of cooperation among the travel agents. We have encouraged them to talk among themselves as to how arrangements should be made so that the whole thing can be carried out in an orderly manner.

Q Why not simply end all the restrictions that you can unilaterally liberalize, so as to pressure Beijing to normalize cross-strait economic and trade links?

I think that the situation is much more complex than that. We can't just lift all the restrictions. For instance, in the area of trade, we cannot allow Chinese goods to come in without any restrictions. We have to think about the impact this would have on our industries, especially agriculture and more labor-intensive production sectors. And without proper restrictions, Taiwan would be packed with Chinese tourists, with implications for our national and social security. So I think the argument itself is fine, but when you look further into it, you have so many concerns that you just can't do without restrictions.

But I think that we can do one thing, which is to be more liberal than the other side. We can try to show that normalizing the relationship would be beneficial to both sides. That would give the Chinese authority an incentive to work with us.

And businesspeople from Taiwan are working with the governments on both sides. They are the people who know best what sort of relationship would best serve the business community. So we talk to Taiwanese businesspeople from time to time in order to understand their needs, and at the same time to let them know that sometimes their requests are not always possible for us to grant unilaterally. Some liberalization has to be bilateral. So they will hopefully go back and talk to the Chinese authority. This group of Taiwanese investors in China helps both sides communicate with each other.