In fact, Taiwan has great difficulty trying to decide on a specific order of priority. The position of Japan is instructive in this regard.
In terms of national security, Japan is a military ally of the US. Japan is continuing to suffer a long-standing economic slowdown, as well as serious threats to its agricultural products posed by low-priced agricultural imports from China.
Since China is currently not bound by any international economic organizations or agreements, it has become a major unauthorized source of agricultural products for Japanese consumers. Japan can only adopt administrative measures that have a superficial effect on restricting the import of such products, in order to protect its farmers. It cannot, under the rules of relevant international economic organizations, impose sanctions on China, such as levying anti-dumping penalties.
If the US delays China's entry into the WTO because of the EP-3 incident, Japan could suffer even greater economic losses.
Taiwan faces a similar problem. What should be Taiwan's priority: defense or economic development? Bush's firm stance on the cross-strait issue serves as a good defense for Taiwan. Since Taiwan relies on the US as a major importer of Taiwanese goods, Taiwan has been all too easily affected now that the US economy has run into a slump.
In these circumstances, how can Taiwan boost its economic competitiveness against a backdrop of increasingly intense international economic competition?
Basically, the Taiwanese government should recognize that in the era of economic globaliza-tion, what it faces is competition driven by capitalism in which capital flows are speedy and highly influential.
Under the logic of fierce economic competition, most governments actively try to attract foreign capital to promote economic development. Taiwan's excessive control of capital will only diminish its own competitiveness. It is difficult for foreign capital to enter Taiwan's market, and local firms are choosing to leave the country secretly. Many Taiwanese businessmen have moved to China where they have opened up shop.
The Taiwan government should adopt more open and liberal economic policies to meet the new challenges.
In a nutshell, Taiwan should realize that in the new chess game gradually taking shape, economic globalization necessitates a new approach to competition. Taiwan must know clearly where its own interests lie lest it get lost in the new wave of competition.
Hsu Tung-ming is a freelance writer based in Beijing.
Translated by Jackie Lin
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