China uses trade to influence Taiwan election

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(AP) — The fish farmers on the terraced plains above Taiwan’s west coast are riding a China boom, exporting tons of sweet, flaky milkfish to the mainland, thanks to import duties Beijing lowered to win over the island’s voters.

When Taiwanese choose a president this Saturday, Beijing hopes the people of the farming and fishing town of Xuejia and others across Taiwan will think of the benefits China brings.

China is an undeclared but widely acknowledged player in the elections, which pits the China- favored incumbent, President Ma Ying-jeou, against challenger Tsai Ing-wen, whose party on paper rejects the unification with China that Beijing wants.

“Of course the Chinese have a political motive. How can they not have?” said Wang Wen-tsung, 47, a scratchy-voiced former member of the town council and a food exporter who has emerged as the power behind Xuejia’s growing milkfish trade.

Trading on carefully cultivated contacts in Shanghai, Wang helped land loans last year from a state-run Chinese company to assist 100 Xuejia families seeking to sell their milkfish to the mainland.

China has posed a challenge to Taiwan since the sides split in a civil war 62 years ago. After decades of threats including missile launchings and denunciations of pro-independence politicians, Beijing has tried a softer approach in recent years, leveraging trade and investment to show the advantage of closer ties.

Ma’s victory four years ago gave Beijing the partner it needed. Since taking office, he has made economic links with China a centerpiece of his administration, stepping up flights across the 100-mile- (160-kilometer-) wide Taiwan Strait, lowering barriers to Chinese investment and opening the doors to mainland tourists, who pumped more than $2 billion into the economy last year.

China has lowered tariffs on orchids, tropical fruits and other regional specialties as part of a landmark 2010 trade agreement, moves that target the farming and fishing communities of Taiwan’s south, a stronghold of Tsai’s Democratic Progressive Party.

A major result of Ma’s approach has been reduced tensions in what has long been a potential flash point for conflict. The easing has been welcomed by the U.S., which remains an important security partner of Taiwan and whose relations with Beijing are often strained by support for the island.

The latest polls show Ma and Tsai running nearly neck and neck, and Ma’s Nationalist Party losing seats in the legislature but retaining control. Beijing wants to help Ma but realizes that the bombast of the past would alienate the centrist voters he needs to win. So unlike in earlier elections, it is saying little and hoping its economic favors will do the trick instead.

“The Chinese of course are concerned about our elections, but they have carefully tried not to leave an impression that they are canvassing for Ma,” said political scientist Chao Chun-san of Taipei’s Tamkang University.

While hard-liners in Ma’s party argue for unification and those in Tsai’s, for formal independence, Taiwan’s political middle is concerned with how best to placate Beijing to preserve the island’s democratic self-rule and raise living standards.

Conscious of that, Ma has downplayed the possibility of a retreat from Taiwan’s de facto independence, while Tsai has forsworn her party’s occasional penchant for anti-China rhetoric.

The battlegrounds are places like Xuejia, a 28,000-strong town of boxy cement buildings surrounded by sugar cane fields, fish farms and rice paddies and just inland from the southern city of Tainan.

China’s economic largesse is persuading some of its residents to give Ma a close look.

Wang, the food exporter, is a card-carrying member of Tsai’s party but is actively canvassing for Ma. He worries that a Tsai win might cause Chinese buyers to halt the milkfish purchases that last year amounted to $4.5 million – about $45,000 for each of the 100 Xuejia families selling to the mainland.

“The Chinese would be most disheartened if the election outcome showed that all their goodwill gestures were ignored by Taiwanese,” he said.

Last April, China’s state-run Shanghai Fisheries General Corp. placed a trial order with Xuejia fish growers for 1,800 tons of milkfish, a local staple that tastes a bit like trout, and until recently, was unknown on the mainland. To sweeten the deal, the company provided the 100 families with loans to buy baby fish from other producers and equipment to engage in large-scale fish farming.

Fish farmer Hsieh Chin-san, another Ma supporter, said the 25 percent premium that mainland buyers were paying for milkfish is crucial to his well-being because “it assured a profit during harvesting season no matter how far any oversupply causes prices to fall.”

Even so, Xuejia milkfish farmers said voting for Ma would not soften their opposition to a Chinese takeover of the island.

“Brothers can have different views, and the Chinese still cannot force unification on us,” said Lin Li-chu, a stocky fisherwoman of 50, who is hooked on TV political talk shows and considers herself a strong Taiwan patriot.

The tariff reductions have come on top of China’s continued major purchases of electronic parts, such as cell phone chips and television panels, which make up the bulk of Taiwanese exports to China.

For Chinese President Hu Jintao, who is set to leave office later this year, a defeat for Ma would be a big blow to his legacy and embolden harder-line politicians and military leaders, for whom the Taiwan issue is crucial.

So worried is Beijing that overt favoritism for Ma might backfire that it has tried to keep Chinese media from traveling to Taiwan and prevent scholars both from going to the island and talking to reporters.

“The boss says we’re not giving interviews before the election finishes and the results come out. It is too sensitive for us to talk right now,” said Peng Wenxue in the research office of the Institute of Taiwan Studies at the Chinese Academy of Social Sciences in Beijing.

On the broader unification issue, Beijing seems far from winning minds. According to the last government survey on national identity – taken in 2009 – 65 percent of island residents regard themselves as Taiwanese, against only 11 percent as Chinese. The rest had no opinion or saw themselves as both.

Oyster farmer Wang Chang-hao from Tainan said he wants commercial cooperation with the mainland – and little beyond it. “We Taiwanese shouldn’t hate the Chinese,” he said, “but rather work together in the global village.”

(Copyright 2012 Associated Press.  All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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