The nation has seen slow economic growth in recent years, with wages stalling and a general decline in competitiveness, while policymakers appear to be unable to come up with adequate responses to protests against major policies, a trade group said yesterday.
The Chinese National Federation of Industries (CNFI, 全國工業總會), which consists of 155 member associations and represents the majority of local manufacturing businesses, voiced concerns that the nation’s economy might fare even worse if South Korea signs a free-trade agreement with China toward the end of the year, as is expected.
“The government seems at a total loss about what to do with objections against the polices it is touting as a solution to Taiwan’s deteriorating competitiveness,” CNFI chairman Rock Hsu (許勝雄) told a media briefing.
Hsu said he was referring to controversy over the Fourth Nuclear Power Plant in New Taipei City’s Gongliao District (貢寮), the cross-strait service trade agreement with China, the proposed free economic pilot zones and other issues.
The political mire deepens worries among manufacturers that they might be forced out of the international market, Hsu said.
Taiwanese exports to China would further lose their appeal if China and South Korea signed an FTA, said Hsu, the owner of the electronics conglomerate Kinpo Group (金仁寶集團) and laptop computer maker Compal Electronics Co (仁寶).
At stake is US$36.8 billion worth of business — as China accounts for 40 percent of Taiwanese exports, Hsu said.
The figures also reflect Taiwan’s dependence on the Chinese market, making the nation vulnerable to external shocks in that market, the electronics tycoon acknowledged.
“Wise corporations should cap their exposure to individual markets at 30 percent, let alone the 40 percent we see in China,” Hsu said, giving his support to risk-diversification policies.
The CNFI is displeased about proposals to make employers bear 60 percent of long-term care insurance premiums, saying labor and health insurance and other payments already constitute nearly 20 percent of labor costs in Taiwan, higher than the 12.21 percent seen in Japan, 8.96 percent in South Korea and 9.67 percent in the US.
The government should distinguish between labor compensations and social welfare and support the latter with money from state coffers, Hsu said.
If the treasury lacks funding, it should seek to raise taxes rather than shift the burden to companies, Hsu said, adding that employers would agree to pay 30 percent of premiums if employees and the government would shoulder 30 percent and 40 percent shares respectively.
The trade group also called for regulatory easing on employing foreign workers, as manufacturers have difficulty recruiting staff from the local labor market, Hsu said. Education and labor authorities should seek to address the discrepancy between supply and demand in the local job market, he said.
“College graduates look down on blue-collar work, but fail to demonstrate the professional knowledge and skills required of positions with higher pay,” he said.
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