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Gloating over Hong Kong distracts Taipei


Reuters


By Robyn Mak

(The author is a Reuters Breakingviews columnist.)

HONG KONG, June 19 (Reuters Breakingviews) - Hong Kong's political turmoil is a distraction for Taiwan. President Tsai Ing-wen made an unlikely political comeback largely thanks to unrest in the Chinese financial centre that rallied anti-Beijing sentiment. But the island's citizens are unlikely to glean much benefit from Hong Kong's pain. Tsai's economic reform to-do list remains too long.

Contenders from the opposing Kuomintang party, the KMT, tried to capitalise on this, promising to revive growth and warm strained ties with Beijing. Presidential hopefuls include Han Kuo-yu, the recently-elected mayor of Kaohsiung city, as well as billionaire Terry Gou, the quirky founder of Apple supplier Foxconn.

But Hong Kong's mass demonstrations against Chief Executive Carrie Lam's proposed bill - which would have allowed extradition to both the mainland and Taiwan - benefited Tsai. She used the incident to rally support for democracy and to reject the "one country, two systems" formula, which Beijing implemented in Hong Kong and proposes as a mechanism to reunify with Taiwan. KMT favourite Han was caught off guard and has been criticised for his comments that described the protests as a "parade", local media reports.

Gou was more shrewd. He publicly welcomed dissatisfied Hong Kongers to move to Taiwan. But while official data show more of them have been doing just that over the past decade, the island is still poorly positioned to absorb skilled immigrants and capital from the Asian financial centre.

Taiwan sorely lags in terms of attracting foreign direct investment, which has slowed efforts to create better jobs for young workers. FDI stock was just 17% of GDP last year, less than half the total figure worldwide, data from UNCTAD show, while cross-border M&A was a fraction of the pre-2008 financial crisis average. Its stock market remains parochial. Tsai's party has made little progress improving the tax environment, lowering barriers to investment, or getting rid of red tape. She has benefitted from Lam's mistake, but it may not last long.

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CONTEXT NEWS

- Taiwan President Tsai Ing-wen on June 13 won the ruling party's nomination for the 2020 presidential election.

- Tsai beat her former premier, William Lai, in a national tally for the party's primary race, according to Cho Jung-tai, chairman of the independence-leaning Democratic Progressive Party.

- The Beijing-friendly opposition Kuomintang party is scheduled to choose its candidate in July.

- On June 13 Tsai said an extradition law proposed by Hong Kong Chief Executive Carrie Lam triggered concern about human rights. Speaking to reporters, Tsai said that Taiwan supported Hong Kong demonstrators, and that the self-ruled island would not accept a "one country, two systems" model proposed by China, which considers Taiwan a renegade province.

- Lam shelved the bill on June 15 after massive protests.






This article appears in: Stocks , World Markets , Politics



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