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Opening to China isn't the answer

The square in front of Kaohsiung's National Science and Technology Museum was much more raucous than usual on the last Sunday of last month. Chinese Nationalist Party (KMT) Chairman Ma Ying-jeou (馬英九) had crossed the Choshui River (濁水溪) -- the symbolic threshold that divides Taiwan's pan-green and pan-blue voter bases into southern and northern blocks -- to address a pan-blue rally in the square.

Ma slammed President Chen Shui-bian's (陳水扁) administration for its six years of poor governance, saying that the KMT had achieved average economic growth of 6.6 percent when it ruled the country in the 1980s. The Democratic Progressive Party (DPP), however, has halved that figure, diminishing Taiwan's regional importance, and putting it last among the four Asian Tigers. In terms of GDP per capita, Taiwan has now been surpassed by South Korea, Ma said, adding that Taiwan's richest 20 percent have become richer and the rest poorer on Chen's watch.

"Public discontent is boiling over, justifying a recall motion [against the president]," Ma said.

Such comments conveniently ignore the fact that the 6.6 percent economic growth rate under KMT rule in the 1960s was a product of the "no haste, be patient" policy, which Ma and the KMT today vehemently oppose. What's more, the 3.6 percent economic growth rate under DPP rule can be attributed to the Chen administration's espousal of economic strategies pushed for by the KMT, such as "active opening," "confident deregulation"and "courageously going west."

Former president Lee Teng-hui (李登輝) was a vocal proponent of Taiwanese sovereignty when he headed the KMT and the nation, and opposed the establishment of Taiwan as an Asia-Pacific regional operations center with China as its hinterland. Under Lee's rule, Taiwan's stock market soared above 10,000 points in 1997 and 1999 as he managed to keep Taiwan's reliance on China as an export market below 25 percent of total exports. Although this was still not entirely satisfactory, it resulted in better global positioning for Taiwanese businesses.

All of this changed when the DPP became the ruling party in 2000. The party went against the grain of Lee's policies of restraint and began dancing to the KMT's tune, establishing direct cross-strait charter flights, liberalizing Taiwanese investment in China, and otherwise fostering economic integration.

And what have the consequences been? Today, Taiwan's export reliance on China has reached 37.8 percent of total exports, while trade with the US, Europe, and Southeast Asia has steadily declined. For Taiwan, globalization has become synonymous with Sinicization. Local enterprises quit the country and set up shop in China, leaving behind a gaping investment vacuum.

These are the circumstances under which Taiwan's growth rate has slowed to almost half of what it used to be in the roaring 1980s. In other words, the DPP's present troubles are the result of the economic roadmap Ma drew up for the KMT. The true irony in all this is that Ma is slamming the DPP for doing precisely what he has advocated that his own party do.

Last New Year's, Chen introduced his notion of "active management" to the public, with the goal of lessening Taiwan's dependence on China and departing from the pan-blues' economic roadmap.

The "active management" policy is focused on pushing growth back up toward 6.6 percent and fostering self-reliance; however, it was met with stiff resistance from not only pro-China elements but even from within the pan-green camp. Six months have passed since the strategy was touted, but it never got off the ground. Instead, old policies remain and the economy continues to hemorrhage.

The pan-blues, however, have nothing to celebrate. The economic slowdown brought on by the "active opening" policy has exposed the pan-blues' economic roadmap as a farce, and if they were to oversee liberalization themselves, the damage to the economy would be even more severe.

This is because their liberalization vis-a-vis China would be even more pronounced; they would usher in direct flights immediately and promote more integration, including allowing companies to invest more of their net value in China beyond the current 40 percent cap and scrapping other investment restrictions. Their position is, "Liberalize completely, and integrate completely with China. That's the only way to save Taiwan!" A number of DPP government officials feel the same way.

Is Taiwan's only road to salvation complete integration with China, as the pan-blues and some pan-greens would have us believe?

That would be like saying that after partially undressing and so feeling chilly, we need to be utterly nude in order to feel warm again.

I call on our DPP government officials to put their focus back on Taiwan, and derive lessons from what Ma shouted and screamed about at the Kaohsiung rally. If the DPP-led government is truly unable to buck the influence of big business and the pro-China media and continues following the KMT's economic roadmap, then Taiwan's economy will continue to suffer, a lesson history has already taught us. Taiwanese businesses may prosper in China, but for those remaining in Taiwan, taking up blue-collar work will be the only choice.

Huang Tien-lin is a former national policy adviser to the president.

Translated by Max Hirsch
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