In Taiwan's current media chaos, it seems to be difficult to maintain professional standards in the reporting of economic news, which demands accuracy, levelheadedness and clear explanations of complex issues. The recent heated discussion on the media-monitoring Web site "Opposing the Media" (www.socialforce.org) regarding an IMF report is but one example.
International organizations have always paid attention to the issue of public debt in various countries. Last month the IMF issued a report on that topic in which it pointed out that government debt on average reached 75 percent of the GDP in emerging countries, while it stood at about 65 percent in most developed countries. According to IMF assessment standards, sustainable levels would be 25 percent for emerging economies and 75 percent for advanced countries.
On October 7, the China Times ran an article about this international economic outlook report. The main headline on the front page of that day's paper read: "Taiwan's debt NT$3.4 trillion -- IMF issues warning." The sub-heading read: "Government accumulates debt equivalent to 33 percent of GDP ... if the budget is not adjusted, we may be on the road to debt default."
This is a clear example of misleading, or even falsified, news reporting.
First, Taiwan was not even mentioned in the IMF report. Taiwan was ousted long ago for the benefit of China, and is no longer an IMF member. But the China Times claims that the IMF is warning Taiwan -- a fantastic claim indeed.
Second, regarding the question of whether the nation's public debt is large or small -- when compared to other countries, be they advanced or less advanced, 33 percent is not a very high figure at all. Although it is higher than the standard for emerging economies when looking at levels of sustainability, it is still far lower than that for advanced countries.
Third, no conclusion has been reached on the issue of whether Taiwan is an advanced or a less advanced country, and it is also difficult to judge the applicability of the above standards. The China Times' decision to place Taiwan among the lesser developed countries and to apply those standards is incorrect. It is an indisputable fact that the nation's finances have deteriorated in recent years, but discussing budget matters is one thing; faking news is another matter.
The China Times is not alone in this media chaos. Let's take a look at another self-proclaimed quality newspaper, the United Daily News. It also ran a piece of economic news as a lead story: "GNP per capita ranking: Taiwan stalls, China leapfrogs." The sub-heading then reads: "The DGBAS releases data for the last 10 years. Taiwan remains in 24th place. Hong Kong, Singapore and South Korea advance. China per capita GNP increases from US$353 to US$911, pushes ranking from 90 to 73."
Common sense tells us that China's economy has grown by leaps and bounds over the past 10 years and that individual incomes have increased faster than those in Taiwan. The DGBAS report reflects this fact.
However, while making the comparison and analysis in the above report, the United Daily News fails to mention one fundamental fact -- to facilitate a comparison, the DGBAS converted all figures to US dollars. During the period concerned (1991 to 2001), the exchange rate of the NT dollar fell from 25:1 to 35:1 to the US dollar.
As a result, Taiwan's income levels when calculated in US dollars will be underestimated compared to Hong Kong and China, both of which maintain fixed exchange rate regimes. When making international comparisons, this important exchange rate factor must not be overlooked. Normally when something that really should be paid attention to is being overlooked, it is due either to a lack of economic common sense, or to problems with journalistic professionalism.
Sometimes the problems don't even stop there. Returning to the United Daily News, an example was presented to extol the virtues of People's Bank of China President Zhou Xiaochuan (
The report even stressed some official jargon Zhou offered to CNN: if international investment banks treated Taiwan as an independent nation and promoted its government and interests, they would be committing a "political mistake."
Praising someone with such examples, someone with such a messed-up sense of national identity, we can only but wonder -- for whom are such reporters and such newspapers reporting? For whom are they running their newspapers? To which country do these publications belong?
Lu Shih-xiang is chief executive officer of the Foundation for the Advancement of Media Excellence and is a member of the Taipei Society.
Translated by Perry Svensson
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