MNCs 'planning to evacuate Taiwan'

Straits Times | August 8 2004

THE heated rhetoric between China and Taiwan could see tensions break out into military action within two years, an analyst has warned.

As it is, some multinational companies, fearing the prospect of war, are firming up their emergency evacuation plans, Mr Michael Boyden, a business adviser to multinationals in Taiwan, told Radio Australia on Friday.

Likening the increasing intensity of cross-strait rhetoric to the 'boiling frog syndrome' - whereby a frog, oblivious to the steady rise in temperature, gets cooked alive - he warned that the situation, if left unchecked, could lead to military strikes.

'The pressure upon the Chinese government from the military establishment to let them sort the situation out, I think, is getting noticeably stronger,' said Mr Boyden, who is the managing director of Taiwan Asia Strategy Consulting.

'And unfortunately, the Taiwan issue has been coming into play in the apparent competition for influence between Jiang Zemin, the former president, and Hu Jintao, the present one.'

Without any serious attempt at some compromise resolution, cross-strait tension would likely deteriorate to 'a point where China has to demonstrate its resolve in some way', he said.

'This would have to be militarily,' said the analyst, who is also a contributor to the Economist Intelligence Unit's bi-weekly publication, Business Asia.

He warned that Beijing's hosting of the 2008 Olympics was no deterrent to an attack. In fact, China may strike before 2008, to avoid jeopardising the Games.

'It's assumed on the Taiwan side that China would not sacrifice the 2008 Olympics. I believe that they are right in a sense that the Olympics have to take place.

'So that means China has got to show its hand either before or after, and 2006 will probably be a good time for them to do it,' he said.

'It would give them a couple of years for everybody to forget about it before the Olympics came around and 2006 is (when) President Chen Shui-bian of Taiwan has said that he intends to have a revised Constitution up and running.'

Similarly, China would not be deterred by Washington's obligation to defend Taipei under the Taiwan Relations Act. And it was unlikely that the US would commit itself 'instinctively'.

'I think what we are going to see is China probing more assertively to test the United States mettle in this respect to see if they really have got the right stuff and really would come to Taiwan's defence,' he said.

'I would seriously doubt it that (the US) would leap to Taiwan's defence instinctively. I think if the situation were bad enough, they might, but it has to be pretty bad.'