‘The KMT Party’s Enterprises in Taiwan Dianging Xu Modern Asian Studies, Vol. 31, No. 2 (May, 1997), 399-413. Stable URL: httpfinksstor.orgsicisici=0026-749X %28 199 70554293 19.42% 3C399% 3A TRPRIT%9E2.0,CO%IB2-K Madern Asian Studies is currently published by Cambridge University Press. ‘Your use of the ISTOR archive indicates your acceptance of ISTOR’s Terms and Conditions of Use, available at hhupvful-jstor-orp/abouv'terms.himal. ISTOR's Terms and Conditions of Use provides, in part, that unless you have ‘obtained prior permission, vou may not download an entire issue of a joumal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial us. Please contact the publisher cegarding any further use of this work. Publisher contact information may be obtained at bbupsfukjstor-orp/journals/cup btm. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transtnission. ISTOR is an independent not-for-profit organization dedicated to creating and preserving a digital archive of scholarly journals. For more information regarding ISTOR, please contact support @jstor.org- hupsfuk.jstor.org/ Sat Mar 19 14:21:25 2005Madera Asian Seudies $2, 2 (1.997), PP. 390-413. Printed in Great Britain The KMT Party’s Enterprises in Taiwan DIANQING XU Huron College, University of Western Ontario Abstract This article explores the origins and development of the Kuomintang (KMT, the Chinese Nationalist Party) party’s enterprises in Taiwan. Because the KMT party’s enterprises are categorized in the private sector in all the statistical data, we should be very careful when we discuss the contributions of private enterprise to economic growth in Taiwan ‘This article aims to inspect the scale of the party's enterprises, the reasons why KMT runs its own enterprises, and what influence they exett on the economic growth and political democratization of Taiwan, Obviously, these questions are significant for further eco- nomic and political reforms in Mainland China. I Introduction Economic statistics categorize enterprises in Taiwan into two parts: stace-tun and private-run, There are around 1,000 state enterprises, twenty-eight of which are run by the federal goverament, and 23 by the provinces. These enterprises are large in terms of output and ‘employment, as well as capital stack. The remainder are operated by cities, counties and some government departments, There are more than 720,009 private enterprises in Taiwan and most of them are mid- sized or small enterprises." In discussing the "Taiwan Experience’, 1 wish to thank M. Altman and P. Dooley for their constructive comments om catlier drafts, and M.Page for her reseateh assistance "according to the Economic Research Depattevent of the Central Bank (1904). it. 1990, the hook value of the assets of private enterprise was 4463.4 bilion NTS with a growth rate of 1281 per cent annually, and formed 79.52 pet cent of the tational grose capital stock. At the sarie time, the book value ofthe assets of state ‘enterprise was 24376 billion NTS, with a growth rate of 7.14 per cent annually, and comprised 20.48 per cent of the total 0026-749%/97/87-50480.10 © 1997 Cambridge University Press 399400 DIANQING XU many economists mention that private enterprises have a much higher growth rate than the state enterprises, and emphasize the contribu- tion to the growth of Taiwan's economy made by the private enterprises. ‘There is no doubt that the percentage of state enterprises in the national economy is reported to be decreasing yearly while the per- centage of private enterprises is increasing. From 195 to 1985, total ‘output of private enterprise increased by 112 times, whereas that of state enterprise increased byonly 16 times. In 1952, the gross product of private enterprise consisted af only 43.4 per cent of the total gross domestic product (GDP). The output of private enterprise had increased tremendously and comprised 83.5 per cent of the GDP in 1985, However, these statistics carry significant bias because a huge part of the data on private enterprise actually refers ta the party-run ‘enterprises of the Kuomintang (KMT, the Chinese Nationalist Party). Jn other words, the party-run enterprises of the KMT belong to the private sector rather than the state sector. At the end of 1980s the book value of the assets of KMT party’s enterprises was more than 10 per cent of the total of the private enterprises, and the total output of the KMT party's enterprises accounts for at least 6.2 percent of GDP? For political reasons, little is known about the KMT party's enter- prises. As pointed out by The Feonomist (27 August 1993), ‘the extent of the KMT’s business empire is Taiwan’s best-kept secret’. Probably nobody except the Finance Gommittee of the KMT Gentral Commit- tee knows exactly how large the scale of the party's enterprises is, ‘The origin and development of the party's enterprises eannot be neg- lected in the study of the “Taiwan Experience’. This article inspects the scale of the party’s enterprises, the reasons why KMT runs its ‘own enterprises, and what influence they exert on the economic growth and political democratization of Taiwan. IL. The Origin and Development of the KMT Party's Enterprises ‘The origins of the KMT enterprises date back to the 1gaos, when polit- ical propaganda media such as newspapers, broadcasting companies, and publishers directly controlled by the KMT Central Committee were established for political purposes rather than for profit. In 1946, 2 See Taiwan Scatistical Data Book, 1993, 2 58¢ 8 The data come from the report given by Mr. Liu Weiji the general manager of the Central Investeene Company. However, many people believe chat the data are signifcancly underestimated, See Genial Daly, 20 September 1993,‘THE KMT PARTY'S ENTERPRISES IN TAIWAN 4or the Finance Committee of the KMT Central Committee set up the Qilu Enterprise, After fleeing from the mainland in 1949, the KMT set up the Yutai Enterprise in 1951. Then, Fengyu Textile company and Zhongxing Electrie company were set up in 1955. Before the 1980s, party-run enterprises did not capture the attention of the publie because of their small number and lack of influence. During the ‘War and the Post-War Martial Law Period, when the KMT monopol- ized power, the national treasury was the party’s treasury. Under such circumstances, the existence and development of party-run enterprise coincided with state enterprise. Before 1946, the Japanese colonial government overwhelmingly monopolized important sectors and industries such as the financial sector, electrical power, transportation, ship-building, engineering, fertilizer manufacturing, and metallurgy. As well, salt, cigarettes, liquor and oil were sold only by the government, Strict regulations were even impased on food processing and Cextile industry. After World War II, the property of the Japanese colonial government was taken over by the KMT' government, which was the beginning of Taiwan state enterprise. During the period between October 1945 and Februaty 1947, the KMT government took over industries which for- merly belonged to the Taiwan Governor, and confiscated private prop- erty of Japanese, which was worth 11 billion TW dollars. Then, the KMT government took over another 860 Japanese-owned or joint- ventures fram March 1947 to December 1950 (Duan, 1989). While some were later sold to private owners, mast were turned into state enterprises, and formed the basis of the leading position of state enter- ptise in Taiwat’s cconomy. Since. 1949, the KMT government regulated that the following enterprises must be cun by the government: (1) enterprises directly related to national defense secrets; (2) enterprises with monopoly or oligopaly power; and (3) large scale enterprises related to public utilic- s and enterprises with some special purposes. Thereafter, the scope and scale of the state monopolies became wider, and the monopoly power of state enterprise was further reinforced. Besides these, the KMT governtent strongly supports state and KMT party’s enterprises with the following economic policies 1. Financing In the 19508 and 1960s, 10-20 per cent of the anmual financial expenses of the government was funding provided ta state and KMT.402 DIANQING XU party’s enterprises in various ways. The percentage was increased to 20-30 per cent in the 1970s and 1980s. From the 1950s to mid~ 1960s, inost of the American economic and military aid was invested in state and KMT party's enterprises. In the category of planned economic aid from the United States, 49.7 pet cent was distributed to state electrical power and transportation enterprises, 24.2 per cent was to state industrial and mining enterprises. After the aid from the United States stopped, state and KMT party's enterprises could still get loans on favourable terms feom American banks under the guarantee of the KMT government. In banking, state and party's enterprises also get many advantages. Their loan interest rate was usually 50-100 pet cent lower than those of private loans, Even during the petiod of monetary shortage in the 1950s, state and party's enterprises were still able to get funds from banks constantly. For several decades, 22.27 per cent of the total loans made were to state enterprise. Some of the ‘loans based an the government policy’ were never repaid, and became bad debts. Obviously, the speed of capital accumulation of stare enterprise is much higher chan that of private enterprise, For years, the total fixed assets accumulated by state enterprise occupied about 50 per cent of the nation’s total.* 2. Monopoly craated by the government policy In many areas, the monopoly position of state and party’s enterprise was formed by the KMT government by decree. There are 16 banks in Taiwan. Thirteen of them are state owned, and, in addition, the government has a high percentage of shares in the other three private hanks. Up till the beginning of the 1990s, Taiwan’s military industry, transportation, postal service, electrical power, oil, copper and alumi- nium etc. have been operated totally by state enterprises. In indus- tries such as steel, oil-chemistry, and chemical fertilizers, state enter- prise also has overwhelming shares. Furthermore, the KMT. government's policies created monopoly positions for state enterprise directly. For example, according to the regulations, imported mat- erials such as large amounts of coal, oil and iron sand must be shipped by the state-run Yangming Shipping Company. * See Economic Research Department of the Central Bank (1992), p39,THE KMT PARTY'S ENTERPRISES IN TAIWAN 493 3 Government pricing policies In Taiwan, the marketing of many items such as cigarettes, liquor, chemical fertilizer and oil is monopolized by the government. The KMT government raises the prices of these products s0 as to create. favourable conditions for state enterprise to make profits. For example, in 1961, the import price for one ton of chemical fertilizer (Amine sulphate) was NT$ 1768, but it was sold to the peasants at a monopoly price of NT$ 4016. The annual consumption of the chemical fertilizer was as high as 300,000 tons. Obviously, the government policy created large profits for the state fertilizer company. ‘The tariff policy of Taiwan also favours state enterprise, For example, large steel companies in Taiwan are owned by the state. They have huge demand for iron ores and other materials, Most of middle and small size steel companies are private-run, and usually use scrap iron as raw material. Under the KMT government regula- tions, imported iron ores and other materials are ¢ariff free. On the contrary, the tariff for imported sceap iron which is 9 per cent, together with a 10 per cent commodity tax, port fees and port con- struction fees ete., put middle and small size enterprises in an inferior position in the market. Although the government gives the state enterprises all the favourable policies and privileges, most of Taiwan's state enterprises are inefficient, badly managed, resource-wasting, unprofitable, and prablent-ridden. State enterprises have become « heavy financial burden for the government. For this reason, the appeal for the priva- tization of state enterprises in increasingly strong. In recent years, many people have appealed to the government to cut the budget of state enterprises, to turn them into private enterprises quickly, co raise their efficiency through market systems, to minimize monopoly privileges, and to ensure fair competition’ ‘The KMT party's enterprises have the same characteristics, such. as the ownership, organization and incentive mechanisms, as state enterprises, Moreaver, the party's enterprises have received more government nepotism than either their private counterparts or the state enterprises. Tt is interesting that the development of state enterprise has been very slow and difficult, but, in contrast, the party-run enterprises of the KMT have been developing rapidly since ° See Cental Daily 6 July 1998.404 DIANQING XU the 1960s, and have quickly become an important group within the ‘Taiwanese economy. ‘The most well-known KMY enterprises include Centrat Daily, China TV Company, Zhengzhong Publisher and China Broadcast Company, which are sponsored by the KMT Culture Committee (Wen Gong Hui), and Youth Activity Centers and Hotels, which are sponsored by the Save-The-Nation League (Jiugou Tuan). Actually, these form just a very small part of the KMT’s enterprises. According to the report given by the party's enterprises management commit tec of KMT,' there are'7 major KMT party's holding companies. The net total assets in the book value are NTS 20 billion as at February 1993. Two of the seven holding companies, the Central Investment Company Zhongyang Touzi) and the Guanghua Investment Com- pany (Guanghua Touzi), are capitalized by huge amounts of re- invested capital. They have Gnanced 94 companies through debt fin- ancing to a total value of NT$ 40.5 billion, which is almost one-sixth of the total assets of these 94 companies. The re-investments cover a wide range of companies such as finance, investment dealers, oil- chemistry, electronic, electrical machinery, cement, steel, construc tion, medicine, environmental protection, textiles, paper, commun- ications etc, Among these 94 companies the KMT party holds more than. 50 per cent share in 24 companies. The party's share is from 25 fo §0 per cent in 36 companies, and the party holds less than 25 pet cent share in remaining 34 companies. In some companies, even, though the KMT possesses only a minority of the shares, it is the largest shareholder and is able to control the company. Far example, party shares comprise only 12 per cent of the Chinese Development and Trust (Zhonghua Kaifa Xintuo), but the KMT is still the largest shareholder. Because the KMT contrals the Chinese Development and Trust, it also controls enterprises such as the Guohua Haiyang, the Wanbang Electronic, the Kunda Fuyi Electronic, the Donglian Huaxue, the Zhongguo Gangtie Jiegou, and the Zhongding Gong- cheng, which were capitalized by this Company. In many cases, the ' its position as the party in power and its influence in political, military and financial circles to cantrol joint-stock compan- ies even though it is not the largest shareholder. ‘The KMT first aimed at the financial sector, and set up enterprises such as the Chinese Development and Trust (Zhonghua Kaifa Xintuo, 1959), the Taiwan Stock Exchange Center (Taiwan * See Central Daily, 6 September 1999-THE KMT PARTY'S ENTERPRISES IN TAIWAN, 405, Zhengjuan Jiaoyisuo, 1962), the Central Industrial Insurance (Zhongyang Chanwu Baoxian, 1962) and the Chinese Trade Devel- opment (Zhonghua Maoyi Kaifa, 1965). In 1971, the Bank of China was privatized and renamed the China International Commercial Bank. During the process, 60 per cent of the shares of the Bank have fallen into the hands of the KMT's Gentral Investment Company (Zhongyang Touzi) withaut public scrutiny. Currently, there are three stock exchange companies in Taiwan. ‘The Gentral Stock Exchange Company (Zhongyang Piaojuan) is party-run and was founded in 1976. The Chinese Stock Pxchange Company (Zhonghua Piaojuan), which was founded in 1978, is also a party-tun enterprise, The third—the International Stock Exchange Company (Guoji Piaojuan)—was capitalized by the China Interna- tional Commercial Bank Zhongguo Guoji Shangye Vinhang), and is controlled by the Central Investment Company (Zhongyang Touzi, a party-run enterprise There are four trust and investment companies which are licensed by the Finance Ministry in Taiwan. Three of them are party-run: the Guanghua Trust and Investment (Guanhua Tuozi), the Chinese Trust and Investment (Zhongguo Xintuo Touzi), and che Interna- tional Trust and Investment (Guoji Xintuo Touzi). In 1991, the government permitted the creation of private banks. The KMT patty-run Huaxin Bank was established and grew very quickly due to the favouritism of the government. ‘The financial sector was the primary target for four reasons: first, this sector has a very strong influence on the economy. The party in power therefore gains more control of the economy by gaining more shares in that sector. Second, access to informacion is very important in the financial sector. Because some go per cent of Taiwan’s bureau- crats are KMT party members, although the party’s enterprises are considered to be private, their information and personal connections to the government allow party-run enterprises to defeat not only private business, but also state enterprise in business competition Tn recent years, party-run stock companies have displayed their skills to the full in the stock market by utilizing their information privil- eges. Their actions are surprisingly quick and accurate. Third, because the relationships between financial agents are very complex due to many crass re-investments among them, it is more diffteult for the public to supervise fair competition in the fnancial sector than in other sectors. Fourth, the party's enterprises can aot only406 DIANQING XU make greater profits in the financial sector than in others, but also it would be easier for the Party to transfer their assets out of the country from this sector than other sectors, should the political situ- ation become strained along the Taiwan Strait Another characteristic of party-run enterprises is their close relationship to the government's economic development policies They are first in line and make huge profits in construction pro- jects which are sponsored by the government, According to a Chinese idiom, ‘Fertile water won't let go to other’s field’. Party- run enterprises are the little pets of the KMT government. It is not surprising that in the competition for the ten great construc tion projects (Shida Jianshe) in the 19708, the party's enterprises were able to take advantage of their favoured positions, and entered the oil-chemistry industry. When the government annountced that private enterprises could enter the electronic com- tmunication industry, the party’s enterprises were in place within a few days because of advance knowledge. of the change in policy. Gurrently, in the six-year national construction project (liunian Guojian), the KMT has set up several construction, development and environmental protection enterprises, and these new enter- prises have usually received special privileges during the bidding for projects. Thus the party has picked up one good business after another. As a result, without public awareness, the gross capital stock of the party-run enterprises has expanded rapidly. Many people of insight criticize the rise of the KMT party's enterprises because the KMT makes profit for itself using its political power, violates fair competition, expands monopoly privil- ege, and harms the development of a market system and demo- cratic politics. The KMT has been accused of widespread vote- buying in many elections. Chen Shimeng and Zhang Qingxi of Taiwan University pointed out: ‘Even for the KMT itself, party-run enterprises are nothing but to drink poison to quench thirst, which makes it feel comfort now and feel worse later. It will be the eternal regret of the KMT’? From an economic perspective, these criticisms are convincing and well-supported, However, from a broader perspective, the rise of KMT party-run enterprise is historically inevitable, and its contribu- tion to the political and economic stability of Taiwan should be mentioned > See Chen Shimeng and Zhang Qingxi (1991), p. 15THE KMT PARTY'S ENTERPRISES IN TAIWAN 497 Ill. The Party's Enterprises and Democratization ‘As Giovanni Satori pointed ou, ‘a Party is the organization of people with some shared views and corimon interests. Their purpose is to use government to put into practice theit political views!” Without doubt, in every society, organizations with different viewpoints and interests always exist, and conflicts occur among these organizations No party can represent all the people. The nation belongs to all the people, whereas the party belangs to only some. If there were no so-called all-people-party, there would be no reason to treat the national treasury as the party's treasury. For a long time, the KMT operated an exclusive dictatots! ‘Taiwan. The party ruled the nation, government officials were also appointed by the patty, and membership in the KMT usually was a requirement for promotion. Government was nothing but an instru- ment of the ruling party. However, a trend to democratic politics is developing. The tide of history is irresistible. Willingly or unwillingly, ho party can maintain absolute power indefinitely. The question is how parties which form a dictatorship can peacefully and rationally democtatize, of, in economic terms, how they can democratize most effectively and with least cost. In the process of democratization, dictating parties are facing a very difficult and even painful process of transformation, Democrat- ization means the separation of party and state, and the parties for- ining a dictatorship and usually monopotizing public property will lose control of the national treasury. Where can the party find alter- native considerable financial resources to maintain its operations? Naturally, a party may be unwilling to give up its properties. Under such circumstances, there ate probably only two options. The first one is that the party with absolute power protects its power and benefits at any cost, and continues to treat the national treasury as, its treasury. The result must be the intensifying of social contradic- tion, forcing opposition parties to struggle on the streets, possibly violently, which could finally lead to social unrest. As a result, the whole society may have to pay a very high cost, and eventually the party in power may be overthrown completely. Although it seems that the dictating party owos everything, it may lose everything over- night. For many years, for example, the Communist Party of the Soviet Union was very wealthy, and considered itself superior to any * See Satori (1976), p. 3408 DIANQING XU in the world. However, after the defeat in August Coup, the Gom- mounist Party lost everything. The other option is to change. peacefully and rationally. Both the party in power and the people must make concessions, To force the party in power to give up control of the national treasury and to climinate powerful obstables within the party requires the party to create new financial sources other than the national treasury. Party- tun enterprises may serve this purpose. In the contemporary world, it is not unusual for a party to cun enterprises. Liu Shuhui (1991) examined 291 parties in 109 coun- tries, and found that many of the parties depend on membership dues and donations. Twenty-cight parties in 21 countries run party enterprises. It is logical for a party to run enterprises in order to cover its expenses. Of course, the party in power should not use its privileges to place its enterprises in monopoly positions, should not break the rules of fair competition, and should not use its ruling power to transfer national property which helongs to all people to the party. However, in the transition process from a dictatorship to democratic politics, because of the lack of political competition and supervision by the people, itis difficult to monitor the rufing party's enterprises effectively. I is also difficult to prevent the party’s enter- prise from making unreasonable, illegal profits with its privileges ‘This is probably an inevitable period in the process of peaceful demo- cratization; in ather words, it is an unavoidable cost. Hawever, this cost is much Jess than that of social unrest. To understand the rise of the KMT party's enterprises, we must first discuss this question: if a dictating party believes its rule is eternal, why does it set up party-run enterprise? ‘The pdlitical development in Taiwan can be divided into three periods. (1) From 1949 to 1960, for the security of Taiwan, the constitutional power and freedom of people were limited. No new parties were allowed, and the KMT formed a dictatorship. (2) From. 1980 to 1980, under the supervision of Mr Jiang Jingguo. the, KMT’s priority became economic development. The success in e¢onomic development, the increase in national income, and the populariza- tion of education gave rise to the middle class. Taiwan society became pluralized, (3) After 1980, the power of the apposition grew rapidly and its influence expanded, Critics demanded that the party in power conduct politicat reforms, that made Taiwan march towards new era of democratic politiesTHE KMT PARTY'S ENTERPRISES IN TAIWAN, 409 ‘The beginning of the 1960s was the turning point for political and economic development in Taiwan. When the KMT decided to switch its emphasis to economic development, real opposition parties began. to develop. An editorial titked ‘National Treasury is not the KMT Party's Treasury’ was published in Freedom China sponsored by Lei Zhen in June 1960.° It sharply criticized the KMT for abusing its privileges and treating the nation as its property. Although the effort {o set up an opposition party was defeated in the 1960s, and Lei Zhen and his fellows were either put into prison or forced to leave ‘Taiwan, this event obviously caught the attention of Mr Jiang Jing- guo. From 1972 to 1988, Mr Jiang Jingguo was prime minister and later the president, Taiwan’s economy and potitics were facing ser- ious tests and had been shocked by the Zhongli event, the Gaoxing event, street politics, the establishment of diplomatic relations between Ghina and the United States, and the establishment of the Democratic Progressive Party. In this critical situation, Mr Jiang Jingguo insisted on multi-party politics and che movement to demo- cratization. In spite of the opposition of conservatives within the party, he tolerated the establishment of an opposition party, thus confirming the policy of multi-party rule, suspended Martial Law, and lifted the restrictions on newspapers. Therefore, the. conditions for social stability and democratization were created, and the founda- tions were laid for further economic development, There was much opposition within the KMT against Jiang's policies. To eliminate this opposition and to turn the KMT from a dictating party to a demo- cratic party not only depended on the reputation of Jiang in the KMT, but also required compromising with the advantaged group within the EMT. Of course, as the leader of the KMT, Jiang wanted the KMT neither to be. overthrown, nor to be in poor financial condi- tion. In the early 1960s, he adopted a series of measures for political democratization and the development of a free market. Establishing party-run enterprises was an important part of his policy. Since then, Party-run enterprises have experienced structural changes and developed rapidly Because party-run enterprises make huge profits for the KMT, the economic losses of the advantaged group within the KMT could be tolerated in the transformation process. In recent years, the KMT has been more than self-suflicient without depending on the national * See Freedom China, June 1960, and Fu Zheng (1989)410 DIANQING XU treasury. The 1992 KMT budget was 4.9 billion NTS. The income from membership dues (only 70 million NT$) can cover only 1.4 per cent of the party's expenditure, Without the party's enterprises, how could the KMT maintain its operations?” For the whole society, tolerating the existence and development of party-run enterprise is better than the monopoly of ¢he KMT. It is also better than a strong rebound of conservative power within the KMT, the interruption of democratization, and even large-scale vialence. ‘The rise of the KMT party-run enterprises can be considered to be large-scale covert acts of corruption by the party in power. As pointed out by Professor Francis Lui,'' in the structural change of an. economy, corruption leads to unequal distribution of property, which has negative effects on economic grawth. However, it cannot be denied that corruption exerts positive effects on economic efficiency. Party-run enterprises are good for social economic change if, after the change, sociat welfare bas heen improved and it is possible for the gainer fo compensate the loser. The process of compensation may be very complex and even hard to realize under many circurn- stances. However, if all participants are better off in the transition process, though to different degrees, the problem can be simplified greatly. Ta the fast two decades, Taiwan has achieved a relatively stable environment for economic development; social property has increased rapidly, and national income has risen steadily. The unequal distribution of income and losses in efficiency resulting from party-run enterprises have not delayed the growth of the economy, eis true that in the short run, party-run enterprises make large profits for the party in power. However, financial resources alone cannot ensure that a party remains in power. Parties which form a dictatorship own almost everything. But how many dictating parties around the world have retained power indefinitely? Hf party-run enterprises can etiminate the opposition within the party in power and provide a stable environment for the development of a free market and political democratization, then the existence of party- run enterprises has its positive effects. In the long run, if demacrat- ization is not interrupted and the supervising power of opposition parties is increased, then the privileged pasition of party-run enter- " See the report of the Fourteenth Convention of RMT, Cesta! Daily 19 Avast aga. "See: Prancis Lui (1991), p. 105, in China's Eepramie Reform Analysis, Ralcton snd Prospect, edited by Xu Dianging, Francis Lui and Zhang Xin.THE KMT PARTY'S ENTERPRISES IN TAIWAN 4 prises would finally be weakened, and the unequal competition would eventually be cured. Currently, there is hot debate about the legitim- acy of the KMT party's enterprises in Taiwan, Many scholars and sen- ators of the opposition party have seriously criticized the monopoly practices and illegal operations of the KMT party's enterprises, and recommended that their assets be confiscated and returned to the national treasuty."” From this viewpoint, the emergence and develop- ment of party-run enterprises does not alter history completely. Any social reform has some cost. The purpose of the “Taiwan Experience’ is to achieve the highest social welfare possible with the least cost in the development of the economy. Although we cannot agtee with many operations of the KMT party-run enterprises, we admit that ¢o allow the party in power to run its own enterprises is an effective way to break the party-state combination and to advance democratization. See Central Daily, 31 August 1993 Appendix KMD Pasy's Boris Yer Name “Aset Parijs share Created % i968 Qilw 700 195) Yutai 00 1955 ‘Fengya Tp 1958 Zhangxing 50 1959 ——-_Zhonghwa Kaifa Xinwo a igo Taiwan Zhengjuan Jaoyiaua + 1962 Bhongyang Chan Baoxian 100 1965 Zhonghua Maoyt Kaila 30 1968 Guohua Faiyang 4 1985 Jingle Zhao 100 1966 JiantaiShuint 396 1967 Taiwan Janye 50 1968 ——_Zhongyang Zalbeoxian > 1969 Guangran Qive ha 1970 —_Xinaxing Dans 30 1970 Wanbang Tisnsi to 3871 Zhonglian Xintvo gan 171 Zhongyang Tous 100 lays Vangenng Haiyun NA 975 ‘Kuna Puy Tiansi 1 1978 Donglian fHusxve 49 1978 Zhomgyang Pianjuan saa 1978 Zhongwel Sia 3ae After 1ggo ‘fier 1990 After 1990 After 1990 After 1990 After 1990 After 1990 DIANQING XU Appendix (con..) EMT Party's Entiat Name honggua Gangtie Jeegou Zhonghua Piaojuan Guanghua Touzi Yongjia Huaxue Zhongding Gongcheng Liantiua Dianzi Fubua Zhengivan Jinrong, aipo Sbihus Hiuajing Zhisan ‘Taiwan Shihua Hecheng ‘Taiwan Chuanpa Qingchang (Guoshan Dianai Anfeng Rezagangchang Huanyu Teu2t Jintsi Fianshe Janta Tout Dahua Zhengjaan Xingye Jianshe Zhongyang Maoyi Kaita Tanwan Disnwun Wanglua Qisheng Tauzi Zhanghia Xingeao Tosi Zhongguo Kingtue Housheng, Baosheng Zhiyso Taiwan fis Dianle Shimao Guomao Dalou Liznye Dianjt Guoji Xingye Xingxing Tanranci Xinglong Tianeanai Datong Jianzu Jinght Xingxing Dazbona Xinggao Shiyoug, Yengiin Shengwu Keji ‘Xingnan Shiyougi Xingiia Shiyouge Xingyun Shiyougi Xingdlas Shigougt Singuiong Shiyougi Huacheng Zhiyean Kaifa Tous! Huaxin Yiehaog Hiuanyu Caiveu Guveen Guo)i Chuangye Tauri Guoji Xintua Touai Hangs Jianshe Tainan Hangtai Haye Fangzht ‘Avset (oilkon NTH} 234 ns 0 aio boa 2625 4350 1503 80 79 Ba S20 NA NA Party's share % tae 36.58 49 17.76 49 43 3e 8 NA 8 45 Nx 4“ NA 50 30 NA NA NA NA NA NA 30 Ra NA NA NA NA Na NA NA NA NA NA NA NA NA % 20 NA 49 7° NATHE EMT PARTY'S ENTERPRISES IN TAIWAN, 413, Appendix (cont) HT Party's Enterties Year Name “Ase Party's share Created (nillion NTH) % After 1990 Welya Huanbao 120 50 After igo Heobua NA NA After 1990 Weiyu Rejé NA NA After 1990 Zhongijia Kaif Tosi 3000 NA Afeer 1990 Lishut Yingzao NA NA ‘After 1990 Biyu Huanbao NA NA ‘After 1990 Qingyu Huanbao 300 NA After (go Jlandong Jinenl Keji NA NA After 1990 ‘Shengahe Shiye NA Na Cultural and Gommunication Institutes Central News NA NA Genteal Daily NA Na China Broadcasting Company NA NA Zhengzhong Publisher Na NA ‘Zhonghua Daily NA NA Hong Kong Time NA NA Central Movie NA NA China TV Company NA NA ‘hongyang Wenwa Gongyinshe NA NA Jiuguo Tuan NA NA Naz daca not available Souree: Chen Shimeng and Zhang Qinaxi (1g9U)s 27. References Council for Econaraie Planning and Development, 1992, Tainan Statistica! Date Rook Central Daily, varians tae, Chen Shimeng and Zhang Qingri, (gg, “The Changes and Political Meaning of the Parey’s Enterprises in Taiwan’, Zkewgeht ngewe Vaniao Hui Luau Duan Chengpu, 1989, Taiwan's aan aler World War IT, Chinese Social Sciences Press. Eeonamie Research Department of Central Bank, 1998, Zhonghua Mingua Tatton ‘Digu Gong Min Ving ive Zien Kuang Diza Oha fiegun Bzogan (499%). Fu Zheng, 1g89, ‘Leh Zhen and Party's Politics Callution of Lei Zhen, No. 14. 2 Shu “On Party's Funding gn, Guohl Yu Zrgdng Zhe Shy Yon Teo fi Luton Satori, Gievanni, 1976, Pores and Party System: A Framework for Andiyis, Landon: ‘Cambridge University Press. Xu Dianging, Francis Lai and Zhang Xin 19g, China's Eeonamic Reforms Analy, Reflection and Prspet, Chinese University Press, Hong Kong.