When joining together a small and a large economic body, it is unavoidable that people and capital from the smaller body will flow toward the economic hub in the larger body. This is not good for the development of Taiwan's economy or its stock market.
Misunderstandings create bad investment decisions, and this is why we have seen predictions that Taiwan's market will break through the 10,000-mark and that the New Taiwan dollar will once again go below NT$30 to the greenback.
Experience tells us that the "no haste, be patient" policy had a bullish influence on Taiwan's stock market. In August 1997, the market index reached 10,156 points, a result of the implementation of the policy one year before. In the late 1990s, investments in Taiwan Semiconductor Manufacturing Co, United Microelectronics Corp and other technology stocks brought quite good returns on investment as a result of that same policy.
Experience is knowledge, and I hope that foreign investors will be able to take the latest painful lesson to heart. Taiwan is not Hong Kong, nor is it Singapore, and it is not true that things will become better the more we deregulate. They should try to gain a better understanding of Taiwan. They should realize that Taiwan already has invested too much in China and that Beijing has ambitions towards Taiwan. They should stop urging the government to further open the doors to China.
If we could all return to the concept of using business to pressure the government into improving its policy of effective management toward China, Taiwan's stock market would be certain to return to the glory days of the 1980s. This would give foreign investors the chance to reap the benefits of the combined US$87 billion that they have invested in local securities.
Huang Tien-lin is a national policy adviser to the president.
Translated by Perry Svensson
RSS