One of the main reasons the opposition parties launched a recall motion against President Chen Shui-bian (陳水扁) was the concern over Taiwan's "weak economy." The nation's pro-China media even concluded that compared with China's economic leap over the last decade, Taiwan's economy is in a shambles.
I think it natural that the outcome of the presidential recall should be determined by popular opinion, but the conclusion that Taiwan's economy lags behind China's is surely questionable.
First of all, the traditional definition of GDP is not an exact equivalent of economic prosperity. Consider the development of Lake Dianchi in Yunnan Province as an example. China has spent 4 billion yuan (US$500 million) in the last year to prevent and control water pollution in the lake, a figure twice as much as the total output of the region. Based on China's GDP calculations, however, this amounts to a total GDP of 6 billion yuan (US$750 million). Also, according to World Bank figures, the environmental cost that has accompanied China's GDP growth is estimated to reach 8 to 12 percent of its total GDP.
Since the transition of power in 2000, Taiwan has seen the relocation of pollution-intensive industries to China. In this context, Taiwan's annual GDP growth rate of 3.6 percent last year reflects real value-added production rather than a patchwork of dirty development alongside environmental clean-up. Furthermore, after taking into account medical and other costs resulting from environmental deterioration, the view that China's economic performance exceeds Taiwan's is clearly wrong.
Looking at bad debt, Germany's Bertelsmann Transformation Index 2006 shows that the bad debt rate of Chinese banks is 40 percent to 50 percent of total loans outstanding, or about US$500 billion. By contrast, Taiwanese banks' bad debt rates have fallen from a peak of 8.8 percent in 2002 to a stable 4.35 percent in 2004, about one-tenth of China's rates.
Finally, take a look at unemployment rates. A recent survey conducted by the US' Rand Corporation shows China's unemployment rate at a new high of 23 percent, whereas Taiwan's latest unemployment rate from April was only 3.78 percent, the lowest in five years. Taiwan's unemployment rate is only one-sixth of China's, and the average unemployment rate under the Democratic Progressive Party government is 1.9 percentage points lower than Hong Kong's. These figures make it even more difficult to understand in what way China's economy is outperforming Taiwan's.
According to the CIA World Factbook, Taiwan's net migration rate is relatively low, and significantly lower than that of China. Taiwan's green GDP growth rate is higher than China's, its bad debt rate is only one-tenth of China's, and its unemployment rate only one-sixth. All this begs the question of whether or not some media outlets in Taiwan have been massaging their view of China's economy.
David Su is a doctoral student in the Department of Economics at the University of Rhode Island.
Translated by Lin Ya-ti
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry