It is early March. On Yangmingshan the flowers are in bloom, while commentators in Taiwan are busy debating the merits of allowing eight-inch silicon wafer producers to move their factories to mainland China. On March 8, a demonstration organized by the Taiwan Association of University Professors calling for measures to delay the movement of eight-inch wafer production to the PRC pushes the level of controversy to a new peak. Though the march that afternoon brings out only 1000 or so people, far fewer than the number of a typical protest, and the march remains low-key, the fact that important members of the Taiwan Thinktank (TT) show up in the ranks of the marchers sparks considerable speculation among outsiders about whether the TT members in attendance represent the views of President Chen.

The media repeatedly quotes the views of TT executive director Luo Cheng-fang, one of the demonstrators, who strongly opposes the moving of wafer factories to the PRC. Meanwhile, Chiang Pin-kung and Paul C.H. Chiu, leading figures in the Kuomintang, both express their views to the media in their respective roles as former and current president of the KMT-affiliated National Policy Foundation. Liu Tai-ying, president of the Taiwan Research Institute, as well as Wu Jung-yi and David S. Hong, respectively the director and deputy director of the Taiwan Institute of Economic Research, are all chased by the media for quotes or are key figures testifying at public hearings on the issue.

Chiang Pin-kung approves of conditionally permitting eight-inch wafer factories to move to the mainland, especially given the fact that, under circumstances in which the government cannot exercise 100% control, "it is easier [for companies] to break the law [by moving to the PRC] than to follow the law [by staying in Taiwan]."

Wu Jung-yi, on the other hand, says that Taiwan has the highest capability in the world for OEM wafer manufacturing, holding 70% of the world market. It is precisely to maintain efficiency and competitiveness that Taiwan's eight-inch wafer plants want to make the move to mainland China.

Taiwan's economic miracle is famous around the world, and economic think tanks have made a not insignificant contribution to it. Various think tanks are now involved in the debate over allowing eight-inch wafer producers to invest in the PRC. The photo shows a related March 9 demonstration held by the Taiwan Association of Professors. (photo by Jimmy Lin)

What color is your think tank?

The concept of think tanks comes from Europe and the US, especially the US, where there are now more than 1000 such bodies. Most of the money for these institutions comes from government agencies or private donations, though the think tanks generally claim that they are not restricted by political or corporate affiliation, and that their operations and research are independent. The main function of think tanks is to do policy research, which is provided to the executive and legislative branches of government for reference. In addition, the academic manpower they house is an important source of top government officials when there is a change of administration, so that think tanks have also been called "revolving doors" between government and academia.

However, in contrast to the relative independence of European and American think tanks, in Taiwan, where political power has always held the upper hand over pure academic research, think tanks operate with such obvious political orientations that outsiders naturally assume that think tanks are nothing but parrots reflecting the views of the powers-that-be. For example, Taiwan Advocates, the Taiwan Research Institute, the Taiwan Institute for Economic Research, and the Institute for National Policy Research all are closely connected to former president Lee Teng-hui, and are thus considered part of the "Lee system." Similarly, because key figures in and contributors to the Taiwan Thinktank are all on good terms with President Chen Shui-bian, the TT is considered part of the "Chen faction." Meanwhile, not only is the KMT-founded National Policy Foundation clearly KMT-oriented, but also NCCU's Institute of International Relations, for historical reasons, has never been able to escape the impression that it also falls within the "pan-blue" forces led by the KMT.

This issue has been especially prominent given recent allegations in the Liu Kuan-chun case that the Taiwan Research Institute got money from a secret fund belonging to the National Security Bureau. One thing for sure is clear: Outsiders are not always aware of, but are suspicious about, collaboration between think tanks and political factions. Yet, oddly enough, it is precisely because leaders at different times in the process of democratization in Taiwan have needed different intellectual resources that there is now a forest of think tanks, symbolizing the pluralization of voices in democracy. At the same time, the different focuses of think tanks founded in different eras have reflected the main challenges facing the country at those points in time.

A source of talent

You can find some clues from history.

The Institute of International Relations (IIR) has the longest history, having been established in 1953 as the Association of International Research, a peripheral organ of the National Security Bureau. During the Cold War, it specialized in providing policy opinions to the political elite on cross-strait military strategy and international diplomacy. In 1961, it was transformed into an academic institution. In 1975, because then-premier Chiang Ching-kuo thought that a think tank would function best in the relatively independent atmosphere of a university, it was placed under National Chengchi University (NCCU), and the staff came increasingly from the ranks of specialists and academics. Since Kuomintang officials have promoted the IIR for 50 years, it is no surprise that outsiders have had the impression of it as "serving the KMT."

"During the martial law era, because of the special background behind the founding of the IIR, as well as the fact that it had a well-stocked 'bandit [Communist China] studies data bank' that was closed to most people, you can imagine that the IIR was the most acceptable source of policy suggestions to the government," says current IIR director Ho Szu-yin. The IIR was well equipped with research resources and salaries were high, so that it brought together many top intellectuals, and more than a few members went on to become important players in the government and KMT.

In the 1970s, IIR director Wu Chun-tsai was tapped to become director of the KMT's Department of Cultural Affairs. Two IIR directors of the 1980s, Chang King-yuh and Shao Yu-ming, became heads of the Government Information Office (GIO), after which they returned to the IIR. Thus the IIR was the first think tank in Taiwan to play the "revolving door" role. Later, IIR vice-director Su Chi entered the cabinet as vice-chairman of the Mainland Affairs Council, after which he also became GIO director-general. In the 1990s, IIR director Lin Bih-jaw went on to serve as vice-secretary-general of the National Security Council, giving the IIR an even more exceptional status.

Seawater is Taiwan's protective moat, and its link to the world. Here in the early 21st century, think tanks trying to build a "maritime Taiwan" (below left) face key issues of national defense (top left), foreign relations (second from top, photo by Ku Chin-tang), and sustainable development of high-tech industry (third from top, photo by Diago Chiu).

To each his own

There's nothing to criticize about the idea of a government directly establishing a think tank in order to improve the depth and breadth of policy formulation. For example, the US Department of Defense supports several think tanks doing military and strategic research. In Taiwan in 1981, to cope with the changed situation following the break in diplomatic relations between the ROC and US, the government, aiming to ensure national economic growth and stability, established the Chung-Hua Institution for Economic Research, which has played an important role in the Taiwan economic miracle since then.

"Chung-Hua specializes in financial and economic affairs. Although it was founded with government funding, and the main focus of its research is on the economic issues facing Taiwan, there's less government interference than you might think, and the academic image is neutral," says Chung-Hua director Wu Ho-mou. The staff members do their research freely and independently, and often have different points of view. Take for example the issue of whether to allow investment in mainland China, perhaps the most important economic controversy in the last 20 years. There are different schools of thought within Chung-Hua, and also differences in the degree to which the results of scholarly research are accepted by decision-makers. Thus, researcher Chung Chin, who supported the "no haste, be patient" policy, was smiled upon by the government, and became the first director-general of the Government Information Office when the new administration came to power.

Overall, Chung-Hua tends to emphasize academic work on large economic issues, with the basic starting point being the overall national interest. This makes it very different from the Taiwan Institute for Economic Research, which emphasizes the interests of the business community.

Those think tanks which in recent years have maintained close relations with decision-makers and whose policy suggestions have been frequently accepted are those that belong to the so-called "Lee system," which began to take shape when former president Lee Teng-hui was in power.

"Lee's outlook of placing great emphasis on contributions to policy by intellectual advisers has had a far-reaching impact on the Taiwan think tank ecology," says Cheng Hsing-ti, a professor of public administration at National Chengchi University. During Lee's 12 years in power, the major think tanks established in that time had a more or less important role in Taiwan's democratization process because he accepted their opinions and suggestions. Examples include: the Institute for National Policy Research, established with funding provided by Chang Yung-fa of the Evergreen Group; the Taiwan Institute for Economic Research, directed for a time by Liu Tai-ying, who ran the KMT's business empire under Lee; the Taiwan Research Institute, founded by Liu after he left the TIER; and Lee's recently unveiled master work to return to the political scene, Taiwan Advocates, many of whose suggestions have already been implemented as national policies.

photo by Jimmy Lin

Consensus building

During the two main revisions of the ROC constitution under Lee Teng-hui, in 1989 and 1995, the positions advocated by the Institute for National Policy Research (INPR)-ending the "period of rebellion," terminating the temporary provisions to the constitution, introducing direct election of the president, eliminating the provincial government, and eliminating the National Assembly-were an exact match with the direction of constitutional reform led by Lee. The Taiwan Research Institute (TRI), on the other hand, was always "top adviser" on mainland policy. As TRI head Liu Tai-ying recalls, on all issues such as the "no haste, be patient" policy or investment in mainland China by high-tech firms from Taiwan, TRI research would always meet Lee's needs and be accepted. The TRI's strategic and international research division was especially established to complement its economic research division at the suggestion of Lee Teng-hui, who considered that, in mainland policy, strategic issues are inextricably linked to economic ones.

Yet precisely because the think tanks in the "Lee system" matched Lee's own constitutional and economic policies, outsiders could not but object that the INPR and the TRI were doing nothing but justifying and defending policies that had already been decided upon by Lee.

"We consider ourselves a 'non-governmental national development conference,'" says Lo Chih-cheng, referring back to the multi-party consensus-building conference to address issues of national importance. "The fact that ultimately the idea of, say, direct popular election of the president, proposed by the INPR was accepted is not surprising, because it is completely natural that good policy would be accepted by the government," he says. Unfortunately, he says, people get the causal relationship backwards, and jump to the conclusion that the policy preference of the government predetermined the outcome of the research.

Whether or not the people in the INPR were "Lee Teng-hui's tame intellectuals," the fact of the matter is that important people connected with the institution have ended up in important positions in Lee's administration; in the new political party of which Lee is the "spiritual leader," the Taiwan Solidarity Union; or in the administration of President Chen Shui-bian, with which the TSU allies itself.

"It is widely recognized that think tanks are private-sector talent pools for the government to draw on. There's nothing suspicious about it: Entering and leaving government agencies is in fact a quite routine matter. It's just that in Taiwan the tradition of distrust of politicians has created the stereotype of 'the emperor's tame intellectuals,'" sighs David Hong, vice director of the Taiwan Institute for Economic Research (TIER), and formerly director of the Taipei City Bureau of Finance under Chen Shui-bian. For example, TIER was founded in 1976 with an endowment from Koo Chen-fu, head of Koo's Group. With this independent source of money, the TIER should have been able to keep at least some distance from the ruling party. However, when Liu Tai-ying, a close confidant of Lee Teng-hui, and nicknamed "shopkeeper of the KMT" because he managed the party's business empire, became director of the TIER, this gave the TIER a certain "Lee coloration." As a result, people have placed labels on the think tank depending upon their positive or negative assessments of the politicians involved, which is really an undeserved burden for a think tank to have to put up with.

A national asset

Liu Tai-ying, who in 1994 switched fronts to become director of the Taiwan Research Institute (TRI), echoes this point of view.

"Currently President Lee is the honorary chairman of the TRI. The office he has used since his retirement is in the TRI, so many people outside equate the TRI with Lee Teng-hui," says Liu. But a retired statesman is a national asset, and if former president Lee can participate in policy research, this definitely is a positive thing for the country.

Liu says by way of example that the TRI's strategic and international research division was established at the suggestion of Lee, and Lee will sometimes appear and express his views at important conferences, which is certainly helpful to scholars trying to come up with practical policies.

If in Taiwan today, with its high degree of democratization, people are willing to look upon the intimate relations between the political powers-that-be and think tanks in a calm and rational way, then one can even better understand the establishment by the Kuomintang of the National Policy Foundation (NPF) as part of its response to losing executive power to the DPP.

As NPF founding director Chiang Pin-kung is not afraid to admit, the sudden loss of the presidency to the DPP is what made the KMT move so quickly to establish a party-affiliated think tank.

Former president Lee Teng-hui gave considerable attention to think tanks and helped drive the first wave of think tank formation in Taiwan. Direct popular election of the president was an idea shared by the Institute for National Policy Research. The photo shows ballot information from that election. (photo by Hsueh Chi-kuang)

Shadow cabinet

"The KMT has a definite need for a think tank," says Chiang. Since the DPP has come to power, if the KMT wants to continue grooming people for government, it must have an appropriate place for former government officials to bide their time, where they can serve at the same time as a valuable intellectual resource for policy. Chiang says that originally the NPF established research groups to parallel each of the 12 committees in the Legislative Yuan, in order to address issues before the legislature, although later these were reorganized into eight groups. Hence many people outside the NPF consider the heads of the eight groups to be a "shadow cabinet."

The NPF puts no restrictions on former government officials; if they have some place they would rather go, the KMT wishes them well. Nonetheless, the list of current group leaders is a very impressive one, all of them being elite figures from the previous administration.

As Chiang says: "Only countries with cabinet systems have genuine 'shadow cabinets,' and there was no thought of such a function when the NPF was founded. But if it functions like a shadow cabinet, and can have a sharp impact on government administration, isn't that all to the good?" The NPF convenes more than ten seminars a week, and offers alternative drafts to bills proposed by the government; it is very much living up to expectations.

Because think tanks can fulfill so many functions, the People First Party is also planning to create an affiliated think tank in order to provide assistance to its lawmakers in formulating legislation. PFP Policy Center director Chang Hsien-yao estimates that it will go into operation in the first half of next year.

Carrying on this tradition of think tanks formed expressly to provide policy recommendations, as well as reflecting the new "ecology" in which each party establishes an affiliated think tank, the Taiwan Thinktank (TT) and Taiwan Advocates, both established late last year, have even more obviously close ties to the ruling authorities. In particular, since taking office the Chen administration has emphasized "government of the whole people," bringing together various opinions from society, and this is evident in the new think tanks. Both the TT and Taiwan Advocates have dispensed with full-time researchers and instead operate on the forum system, inviting a broad spectrum of social elites from business, government, and academia to participate.

Ko Chen-en, who is also spokesman for the TT, explains that the TT operates through eight forums. Each of the forums has a convenor and 20 core affiliated researchers. When there is a meeting, experts from various sectors are invited to participate. The TT has no fixed schedules, and for this reason it operates very flexibly.

The forum approach is novel, but because everyone from the directors to the advisers in the TT are all personally close to Chen Shui-bian, the political coloration is very clear. Though just established, commentators are suspicious of the fact that its founding comes right after the legislative elections, with less than two years left in Chen's first term in office, when the run-up to the next presidential election is beginning. Ho Jung-hsing, a reporter for the China Times, has written that it is going to be a difficult challenge indeed for the TT, whose political colors are very clear, to try to put some distance between itself and the powers-that-be.

The political tint is even more obvious over at Taiwan Advocates, established under the guiding hand of Lee Teng-hui. With Lee as the president, Taiwan Advocates emphasizes being a "do tank," smashing old thinking and representing the government and the people in hopes of acting as a knowledge platform. In fact, Taiwan Advocates was established in response to President Chen's idea of a trans-party "national security alliance," bringing together many political figures as well as social and academic elites. Taiwan Advocates aims to be "the brains of the national security alliance," and also to link together different political forces in the Legislative Yuan. Taiwan Advocates has held few public activities, so its actual impact remains to be seen.

Seawater is Taiwan's protective moat, and its link to the world. Here in the early 21st century, think tanks trying to build a "maritime Taiwan" (below left) face key issues of national defense (top left), foreign relations (second from top, photo by Ku Chin-tang), and sustainable development of high-tech industry (third from top, photo by Diago Chiu).

When words collide

Because of deep distrust of politicians, there have always been doubts about the relationship between think tanks and political power. But taking the long view, the think tank ecology in Taiwan also reflects the needs of the times. IIR director Ho Szu-yin says, "If the government listens to you, you are a think tank; if the government doesn't listen to you, you are a research organization." If the various think tanks can maintain a long-term commitment to research, this can only be a positive contribution to the country.

Ko Chen-en of the TT proposes the idea of "competition among ideas." Think tanks can represent different values in society, and propose policy manifestos from different points of view. Think tanks should have their expert policy recommendations compete, and public opinion and the government can decide which voice they want to choose, or which opinions they wish to integrate.

If what think tanks represent are the pluralized voices of a democratic society, then the recent think tank commotion lets us see the real practical impact. Besides discussions over liberalizing investment in mainland China, another issue on which think tanks have weighed in is reorganization of the government, proposals for which have recently gone to the Legislative Yuan. The TT, the NPF, the TRI and other brain trusts have all come out with related suggestions. Also, six major industrial and commercial associations have commissioned the TRI to express their opinions about government restructuring from an enterprise point of view.

The six major business associations believe that besides streamlining the government and turning government operations like harbors and highways over to the private sector, there should be appropriations to retrain those persons who lose their jobs as a result of government streamlining.

The "taxpayer-conscious government re-invention philosophy" proffered by the TT believes that the issues of reform faced by the government in Taiwan can be divided into basically three levels: powers and responsibilities of organizations; management; and substantive policies. In terms of the powers and responsibilities of government organs, there are three key directions to be handled: reorganization of the structure of executive agencies, adjustment of the relations between the central and local governments, and reform of the constitutional system. In terms of government management, the key six issues which must be handled include relations between the government and society, rationalization, clean government, management of government staff and manpower resources, efficiency, and quality control of governmental services.

On the other hand, Hsu Yu-pu, a consultant to the constitutional group at the NPF, has written that "the reinvention of government" should consider questions like raising government efficiency and making the best use of staff resources; only in that way can it be effective.

In Taiwan in 2002, there are a forest of think tanks and a cacophony of diverse voices expressing their own opinions. However, this is also vital to better addressing issues like the economy, foreign affairs, cross-strait relations, and domestic politics. The major think tanks each have their own areas of expertise, and they both compete and cooperate. If they can avoid becoming simply the mouthpieces for specific policies, and provide neutral, expert opinions to society and decision-makers, this will enhance the well-being of the people of Taiwan and allow our country to make a greater contribution to international society.

Seawater is Taiwan's protective moat, and its link to the world. Here in the early 21st century, think tanks trying to build a "maritime Taiwan" (below left) face key issues of national defense (top left), foreign relations (second from top, photo by Ku Chin-tang), and sustainable development of high-tech industry (third from top, photo by Diago Chiu).

Ho Szu-yin

Posts held: Director of the Institute of International Relations, and professor in the Department of Political Science, National Chengchi University.

Education: PhD in politics, University of California at Santa Barbara, USA.

"To date Taiwan has always been a price taker in international politics, not a price leader with the power to call the shots. Whatever price others set, we generally just have to take it or leave it, and we have paid a great deal in terms of political, human and economic resources to get where we are today. Taiwan is unlikely to be able to change this situation much in the future, but what we can do is to look for ways to maintain our current diplomatic achievements with the least investment. If we can reduce the cost, we will be winning."

David Hong

Posts held: Currently vice president of the Taiwan Institute of Economic Research; formerly director of the Taipei City Government Bureau of Finance.

Areas of expertise: Energy economics, transport economics, banking and finance.

"Intensive economic interaction can indeed have a positive influence on the cross-strait political situation. The most obvious effect is mutual confidence and communication, and the WTO provides an opportunity to resolve cross-strait economic issues. Now that both sides have joined the WTO, we are anxious to get to grips with the details of bilateral trade, and so is the PRC. If, like other countries, we can each set up a WTO office in the other's territory, we can avoid squabbles over political sovereignty, and this would set a good example for future mechanisms for cross-strait interaction."

Cross-strait relations have always been a key issue for Taiwan's think tanks. Taiwan's first think tank, the Institute of International Relations, was founded with government money during the Cold War to meet strategic needs. The photo shows a demonstration demanding cross-strait peace, held during the 2000 presidential election campaign. (photo by Jimmy Lin)

Wu Ho-mou

Posts held: Vice president, Chung-Hua Institution for Economic Research; professor in the departments of international business and economics, National Taiwan University.

Education: PhD in economics, Stanford University, USA.

Research fields: Economic theory; financial economics; international economics and industrial organization.

"This is an era in which businesses think globally. With people in Taiwan shouting about globalization and firms in mainland China already having eight-inch wafer production technology, there is no longer any reason to prevent companies moving west.

"Enterprises can find their own basis for success. People in government may think they are able to regulate industry, but over-tight controls will only cause businesses to leave altogether. Look at the Dutch experience. Philips has plants in many countries worldwide, but its headquarters are still in the Netherlands. The government should give firms the greatest opportunity to compete, and encourage them to 'keep their roots in Taiwan,' not 'leave their debts in Taiwan.'"

photo by Jimmy Lin

Chiang Pin-kung (P.K. Chiang)

Posts held: Currently vice president (deputy speaker) of the Legislative Yuan and vice chairman of the National Policy Foundation. Formerly NPF president, economic affairs minister, and chairman of the Council for Economic Planning and Development.

Education: PhD in agricultural economics, Tokyo University, Japan.

"I'm in favor of letting Taiwanese companies build eight-inch wafer fabs in mainland China. Continued economic development and maintaining the competitiveness of our products are the most important things for Taiwan at this stage. Building plants on the mainland is not a zero-sum game. If firms from other countries weren't building factories there, then of course we wouldn't need to either. But at a time when international companies all see the mainland as an important market, for us to invest there is a way of using Taiwan's current competitive advantage to maintain our lead.

"Debate in Taiwan about our companies building eight-inch wafer fabs on the mainland inevitably becomes politicized. But with worldwide economic competition becoming more intense than war, it is only by continuing to develop Taiwan's economy and maintaining our competitiveness that we can have any leverage in cross-strait negotiations."

photo by Jimmy Lin

Liu Tai-ying

Posts held: Currently president of the Taiwan Research Institute, national policy adviser to the president, and chairman of China Development Financial Holding Corporation; formerly president of the Taiwan Institute of Economic Research.

Education: PhD in economics, Cornell University, USA.

"If research had been commissioned from think tanks two years ago on the issue of investment in wafer fabs in mainland China, there wouldn't be so many disparate opinions today on the timeliness of such investment and how it should be regulated.

"The government bases its judgment on this issue on national interest, while companies approach it from the point of view of the benefit to their own development. There's nothing wrong with that, but building a wafer fab costs at least NT$10 billion, and possibly 20 or 30 billion. If companies are to be allowed to 'go west,' there are a number of points at least that we should pay attention to: Firstly, we need to watch whether companies are 'leaving their debts in Taiwan.' Only older wafer plants on which the bank loans have been paid off should be allowed to go. Secondly, they should only be allowed to go when production at the 12-inch fabs that remain in Taiwan has exceeded that of the eight-inch fabs. That way, the technology will remain in Taiwan, thus maintaining Taiwan's advantage in the industry."

(facing page) Taipei City in the sunshine. Taiwan must keep moving forward, or it will be left behind.

Lo Chih-cheng

Posts held: Currently CEO, Institute for National Policy Research; associate professor, Soochow University politics department; formerly chairman, Ministry of Foreign Affairs Research and Planning Board.

Education: PhD in politics, University of California at Los Angeles, USA.

"We can look at the debate over national security versus press freedom, as stirred up by the Liu Kuan-chun case, from two perspectives: Secret diplomacy is a normal activity for many countries, and much diplomatic work has to be kept absolutely confidential. To take foreign aid as an example, if the PRC knew what amounts we give in aid to other countries, they could compete by 'outbidding' us; and if the various political parties in the countries we assist each knew how much assistance the others were getting, this would also tend to lead to disputes.

"Nevertheless, when secret budgets conflict with the law, the news media are naturally free to report this. But in this instance it will be worth watching what kind of negative influence the exposure of national security secrets by Next magazine will have on diplomatic and intelligence work, and whether it will harm the basis for mutual trust between the ROC and other countries."

Seawater is Taiwan's protective moat, and its link to the world. Here in the early 21st century, think tanks trying to build a "maritime Taiwan" (below left) face key issues of national defense (top left), foreign relations (second from top, photo by Ku Chin-tang), and sustainable development of high-tech industry (third from top, photo by Diago Chiu).

Ko Chen-en

Posts held: Director, Taiwan Thinktank; dean, NTU College of Management.

Education: PhD in accountancy, University of Minnesota, USA.

"On the issue of wafer fabs going west, businesses mustn't ignore national interest, but the government should also give enterprises the opportunity to adopt global strategies. From the perspective of national security, enterprises must genuinely face up to such questions as whether their moving production to the mainland will give technology away, whether it will weaken our national competitiveness, and whether their being located there will make Taiwan more vulnerable to political pressure. However, the wafer fab issue has also given people here an opportunity to think about a longer-term issue: has the government provided a basis for businesses to continue developing in Taiwan? After some firms move overseas, will others replace them? These are all potential problems that we must prepare for."

(Eric Lin/tr. by Robert Taylor)

courtesy of TIER