Taiwan Port Shrugs Off Missiles Falling Nearby

If this grimy port city isn’t ground zero of China’s missile tests, then it certainly qualifies as 0.1.

Three of the four missiles that have been fired from the Chinese mainland toward Taiwan have landed in the sea just off Kaohsiung. The last one arrived early Wednesday morning, dropping, like the previous ones, into the warm, dark-green waters about 30 miles southwest of here.

Yet if China’s purpose was to terrify the population, its effort has failed miserably. The impact of the tests has been negligible. The arrival of the missiles has produced some small economic changes, no signs of panic and a mood of irritable annoyance at the Big Neighbor across the waters.

“The people here are fed up with this kind of intimidation from the People’s Republic of China,” said Wu Den-yih, the elected mayor of this city of 1.4 million, in an interview. “If they think they can influence the Taiwan people in the presidential election, they either miscalculate or underestimate the Taiwan people.”

“People in Taiwan don’t seem to be as concerned about this [the missile tests] as in other countries,” mused Chen Chi-mai, a Taiwan legislator. “The Chinese missiles are aimed at the presidential election. It’s not likely that they will invade Taiwan.”

Kaohsiung is the world’s third-busiest port. It is from here that the products of Taiwan’s thriving economy--its computer mouses and motherboards, laptops and video cameras--are shipped to the rest of the world.

The city also serves as the center for heavy industry in Taiwan. More than 80% of Taiwan’s steel production, 80% of its petrochemicals and more than 80% of its shipbuilding are in the Kaohsiung area. It is a military center too, ringed by army, navy and air force bases.

So the military leaders in Beijing knew what they were doing when they selected Kaohsiung as one of the two areas near which to direct their missiles. The other area was the port of Keelung, at the northern end of Taiwan.

The message was clear, if not exactly pleasant: China’s missiles could destroy Taiwan’s economy. Oddly enough, the message fell a bit flat here--because Kaohsiung already knew that.

It is not as though China has suddenly arrived in Taiwan’s neighborhood from some other planet. It has always been there, its overpowering size ever-present in the psyche, as constant as the island’s hazy sunshine.

“Are you scared of China?” one resident was asked this week. “No,” he shrugged. “I’m used to it.” The Chinese expression he employed, xiguan le, is the one ordinarily used by people accustomed to a lousy climate or other phenomena they can’t do anything about.

The older generation on Taiwan, which grew up in the era of Generalissimo Chiang Kai-shek, was indoctrinated for years to be on guard against the potential threat from China. And while younger people here have more recently seen China’s more benign face, the institutions that were set up long ago to prepare for an attack from the mainland have never been entirely dismantled.

To this day, the city of Kaohsiung conducts regular drills of its system to set up food rationing in case of war and of its emergency medical plans to handle sudden, massive casualties.

Ironically, the latest of these drills were scheduled--well in advance--for March 6 and 7. As it turned out, China announced the latest round of missile tests on March 5, giving the routine drills a new sense of purpose.

So far, the biggest impact of the missile tests has fallen upon Kaohsiung’s fishing industry. Kaohsiung’s Fishing Assn. estimated that there has been a 30% drop in its take since the missile tests started, as boats keep far away from the missile area. That translates into a net loss of roughly $4 million so far, by the association’s estimates.

From a plane coming into Kaohsiung, one can look across an expanse of water virtually devoid of boats. Everyone is giving the Chinese wide berth. Only in the waters right next to Kaohsiung are freighters visible, at anchor near the port.

Wu, the Kaohsiung mayor, says shipping companies have managed to redirect their routes so that there has been little impact from the missile tests. He admits, however, that “over the long run, if this goes on further, they [shipping companies] might find a replacement port. That would really hurt the economy of Kaohsiung.”

When China first announced the missile tests, there was some hoarding of food in Kaohsiung. Housewives picked up an extra bag or two of rice.

And officials here admit that the residents of Kaohsiung--like those elsewhere on the island--have been buying up extra supplies of U.S. dollars.

Early this week, the Central Bank of China, Taiwan’s central bank, was forced to urge people to stop buying so many U.S. dollars and to promise that the central bank would preserve the value of Taiwan’s currency at about 27.5 Taiwan dollars to the U.S. dollar.

Over the past few months, Taiwan’s foreign-exchange reserves have dropped from a peak of over $100 billion, second-largest in the world behind Japan, to levels just below $90 billion. The drop has been linked to the flight of capital and the central bank’s efforts to preserve the value of the local currency.

Yet the demand for U.S. dollars falls short of panic. The missile tests produced no run on the banks. The food stores are open.

In a way, residents here confront the tests with the same curious amalgam of fatalism and prudence long found among Chinese on the mainland--a reminder that Taiwan is, if not part of China, at least subject to its cultural influence.

One 39-year-old Taiwanese businessman flying into Kaohsiung this week said flatly that he wasn’t worried by the prospect of being in the neighborhood of the missile tests.

“You can’t escape,” he explained airily. “This is a small island.”

Yet, a few minutes later, he confided that a few months ago, after a round of Chinese missile tests last summer, his wife had taken the cautious step of obtaining visas, valid for five years, for herself and their two children to go to the United States.

And a few minutes after that, the businessman also acknowledged that he and his family keep their savings in banks in Singapore, South America and the United States. They started doing this about a year ago, before the missile tests started, he said.