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TIME ���:

TIME (OCTOBER 30, 2000 VOL. 156 NO. 17 )

Give This Guy a Break!
Critics have been too hasty in declaring Chen Shui-bian's tenure a
failure

By SIN-MING SHAW

Chinese premier Zhu Rongji once called Chen Shui-bian's presidency a
"joke." Outside China, conventional wisdom increasingly seems to agree.
Since Chen's election in March,
Taiwan's stock market has plunged by more than 30%, a slide that pundits
say represents a vote of "no confidence" in the President's abilities.
Chen's approval rating, meanwhile, has fallen to less than 40%, from a
high of 77%. His Premier, Tang Fei, resigned after less than half a year
in office.

Chen is taking heat for everything. The economy is in the
doldrums. A banking crisis is looming as problem loans pile up.
The delicate relationship with Beijing has stalled, and no one
can control the Vice President, Annette Lu, who pokes China in
the eye at every opportunity. (In an official report, Beijing
recently called the Taiwan situation "grim.") All of this adds up
to a sense that Chen has squandered the promise of his election,
an opinion shared, apparently, by his close adviser, Lee
Yuan-tseh. A Nobel laureate, Lee said recently that the
President "talked too much without giving the people a clear
direction where he was going."

So is Chen toast? Is his presidency a disaster? Not at all. The
slump in Taiwan stocks has more to do with global worries over
the declining earnings of semiconductor companies than with
Chen. Taiwan's stock-market index is packed with technology
stocks; so is NASDAQ in the U.S., which has also dramatically
declined since March. The market is simply saying that if
Silicon Valley isn't doing well, neither should Taiwan's tech
stocks.

On the political front, it's true that Chen's minority Democratic
Progressive Party (DPP) has been slow to get up to speed. One
reason for that is the Kuomintang (KMT), the DPP's rival, which
dominates the legislature and has tended to put partisan interests
above those of the nation. But the DPP's emergence as Taiwan's
ruling party has already helped heal the most divisive social and
political wound on the island: the rift between
Fujian-dialect-speaking locals and the Mandarin-speaking
mainlanders who have dominated local politics for a
half-century. The topic of schism is no longer in prominent in
public discourse.

As for the economy, Taiwan does indeed face serious problems.
But Chen hasn't been idle. In a departure from past KMT
policies, Chen is promoting bank mergers to help shore up the
weakest institutions. And he says he will lift many restrictions
on foreign banks wishing to compete in Taiwan. Although
capital is still over-regulated, the question is no longer whether
financial reforms will come, but when and to what degree.

Chen is waffling on some economic issues. But his hesitance is
often understandable. Taiwan, like many other places, is
grappling with a dual economy: one part is old, inward-looking
and inefficient; the other is new, know-ledge-intensive and
globally competitive. By letting the New Taiwan dollar find its
own, lower level and by lifting regulations governing capital
lows to China, Chen could encourage Old Economy
companies to revive themselves by relocating to the mainland.
But China isn't making it easy. Beijing recently said it would
take stock of the political views of potential investors from
Taiwan, particularly their level of support for Chen's DPP. The
threat was later quietly dropped, but a sense of uncertainty had
been sown. The reality is that both sides need each other. It is
China, not Taiwan, that could face devastating unemployment
after joining the World Trade Organization.

Is Chen handling the cross-Strait relationship well? Beijing
clearly does not think so. But by now, even the mainland's most
stubborn hawks must know that war against Taiwan is a
non-starter: it's impossible to define victory in any way that
makes sense.

Chen said recently he was proud to be a Chinese, a signal to
Beijing that he is willing to be conciliatory. The communists,
however, apparently want him to genuflect more
unambiguously. China should know that putting a timetable on
reunification is unwise as long as Taiwan's people are not ready
for it. Chen knows his constituency better than Beijing and is
calculating that he needs to proceed slowly. Chen can do better
at his job, yes, but during his first six months in office he has
not done badly. In the U.S., Bill Clinton didn't exactly light up
the scoreboard in his first two years, but his performance
improved considerably. Give Chen a chance. The conventional
view about him is simply unfair.

Sin-ming Shaw is a visiting scholar at the Fairbank
Center for East Asian Research at Harvard University

__________________________

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