Taiwan has entered a new era of political and economic development. Politically, it has ended the rule of a foreign regime's dictatorial party-state and entered an era of democratic constitutionalism. Economically, it has left the ranks of developing countries to join the world's developed nations.
Because Taiwan possesses the economic power and potential for development of an advanced nation, why haven't Taiwanese seen their incomes increase and their standard of living improve? Why can't Taiwanese enjoy the benefits of the nation's economic development and why have they lost confidence in future economic development? What has gone wrong?
The problem lies in the fact that Taiwan has entered a new era on the economic front while national development strategies remain the same as those of the past, running counter to what is needed to develop the economy in a new era.
The mistake made by Taiwan in its economic strategy is that we have given up building the Taiwan of today and planning for the Taiwan of tomorrow in favor of going to China to reproduce Taiwan's yesteryear. This development strategy amounts to suicide.
China is not the engine behind Taiwan's economic growth, but a treacherous black hole sucking in Taiwan's industries. Taiwanese investment in China, reaching US$280 billion by late 2004, accounts for half of all foreign direct investment in China. China's economic "united front" strategy is to attract Taiwanese capital, technology and managerial talent, force Taiwanese industry to obey and rely on "China's rise," and deprive it of initiative and the vital ability to innovate.
For countries, enterprises or industries to increase competitiveness, they must rely on continuing innovation to create and satisfy new demands for higher quality. They cannot simply rely on cutting costs and replicating past achievements.
China's open slave system allows Taiwanese businessmen to squeeze exploited, cheap Chinese labor, while at the same time China squeezes the Taiwanese businessmen for capital, technology and managerial and marketing talent. The system also forces these businessmen to become the tools of Beijing's "united front" strategy, which is aimed at annexing Taiwan.
I have recently read a lot of books on Chinese President Hu Jintao (
Hu has combined Mao's dictatorship of the proletariat with Deng's economic opening into an integrated strategy for economic opening under the dictatorship of the proletariat.
Hu's first iron fist is the constant strengthening of the suppressive state apparatus -- the army, the police, the intelligence and ideological control systems, together with a strict ban on the rights of free speech, religious belief and association. The armed police, now equipped with modern technology, are implementing strict controls to "root out all seeds of liberalization and turmoil."
Hu's second iron fist is his insistence on economic opening to invite capital, resources, manpower and management methods from free countries to make use of cheap, unfree labor and cheap "state-owned" land offered under China's communist slavery system -- all to make China a factory to the world.
China is relying on a never-ending flow of new blood from free countries to strengthen the economic, military, technological and diplomatic power of the party-state slavery system. Some people have expectations that Hu will let China develop towards free capitalism, but that is nothing more than wishful thinking.
Hu's ultimate goal is to expand the power of the open slavery system, divide free countries and fulfill Deng's dying wish: "Remain firm in the belief that socialism after a long progressive period will replace capitalism."
This is the global strategy of Hu, Deng's true heir. His top strategic goal is to turn Taiwan, a modern constitutional democracy, into a political and economic satellite of China's communist slavery system. Former Chinese Nationalist Party (KMT) chairman Lien Chan's (
The challenge posed by the KMT and the CCP, and their joint attempt to bring about China's annexation of Taiwan through economic means, is formidable. We cannot meet this challenge by simply staring at China. We should also look at Taiwan and come up with strategies for the nation's economic development in this new era to help us build present-day Taiwan and create a Taiwan for the world of tomorrow.
Some people say that: "We can't put all our eggs in the China basket, we also have to look to Vietnam, Southeast Asia, Central America and India."
But this replicates Taiwan's past, only this time in several places. Old strategies for developing Taiwan's industries were aimed at the export and manufacturing industries. Increases in exports, low-cost labor and large production volumes built Taiwan's economic miracle and allowed an isolated nation to continue to exist.
But economically and technologically, as well as in terms of per capita income, Taiwan has reached an advanced level. Given Taiwan's current strength and competitiveness, it can only continue to develop by overcoming its past, finding a new direction for development and climbing toward new strategic goals.
When targeting goals for Taiwan's economic development in this new era, we should focus not on China, but on Taiwan itself. We should build a new strategy focusing on Taiwan and on attracting global resources, capital and manpower, as well as improving the nation's cultural and social life.
First, the attempts to recreate Taiwan's past in China should be abandoned in favor of building the Taiwan of the present and the future as part of the world of the future.
The growth target for Taiwan's economy should be diverted from the current external focus to a combined external and domestic focus, with the emphasis on the domestic economy. We should develop a modern industrial base aimed at improving national living standards and building a beautiful and comfortable living environment in our cities as well as in the countryside.
We should allow Taiwanese to live peaceful and happy lives. Not only that, we should also attract people from around the world who want to come to this paradise of freedom to live, start businesses and invest so that they can share in our investment and cultural environment.
Second, there is no need to aim for the economic growth benchmarks that characterized earlier days of Taiwan's development. Rather, the focus should be on qualitative improvements. National development strategies should be diverted from sheer monetary goals -- increasing wealth -- toward a focus on people.
Third, to develop industries that satisfy domestic demand, we must give more room for maneuver to small and medium-sized enterprises. The government should change tax policies directed at big export-oriented companies and place the main focus on nurturing the development of small and medium enterprises in satisfying domestic demand.
I believe that the Taiwanese people are outstanding, with outstanding entrepreneurs, workers and farmers. In this new era of liberal democracy, they will create a new economic miracle and bring Taiwan to new heights of economic development.
Lee Teng-hui is a former president. This is an edited version of a speech at a Taiwan Advocates function on April 13.
Translated by Daniel Cheng and Perry Svensson.
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