Wed, Jun 20, 2007 - Page 8 News List

The curse of those who missed out

By Lin Cho-shui 林濁水

Between the year 2000, when President Chen Shui-bian (陳水扁) took office, and 2003 the economy grew at an average annual rate of 2.82 percent. While Chen got only 39 percent of the vote in the 2000 presidential election, he won with 50.1 percent in 2003. He also increased the ratio of pan-green politicians in the legislature to 44 percent from a high of 33 percent in the 1990s. How did all this come about?

Usually these things are argued to be the result of this society moving toward Taiwanese independence.

But it was in the 1990s that support for independence grew the most, not after 2000. In the seven years before 2000, support for independence grew from 5 percent to 45 percent, while in the seven years after 2000 it only went up from 45 percent to 55 percent.

The actual causes are more complex. First, localization under former president Lee Teng-hui (李登輝) attracted pro-independence votes to the Chinese Nationalist Party (KMT).

After Lee's era ended, anti-independence forces within the pan-blue camp came to the fore again, pushing most of the pro-independence voters back to the Democratic Progressive Party (DPP).

But an even more important reason is the political effect of the "M-shaped society" brought about by globalization.

In 1992, after Lee raised the idea of making China the hinterland for Taiwan's economic development, cross-strait trade became a link in the globalized post-Cold War economy and economic growth took off. Although attempts were made to step on the brakes through the "no haste, be patient" policy in 1996, this did not have any effect. Exports to China as a proportion of total exports kept rising, and by 2004 the figure had increased to 38 percent.

The rapid expansion of cross-strait trade enabled companies such as Foxconn and Asus, which invested in China and utilized its labor market, to become global companies. Some people profited greatly from this, but as with the US and Europe, globalization also caused many people to lose out, some even losing their jobs.

With domestic demand declining and wages stagnating, real incomes declined. These trends started to emerge in 1996, but because this coincided with a decade-long boom in the US technology industry, the problems as Taiwan felt them weren't very grave at first.

But between 1992 and 2003, a number of social problems accumulated and the situation became serious.

When the government changed in 2000, the unemployment rate was already 2.99 percent, and in 2004 it had reached 4.44 percent. In the early 1990s, wages had increased by an average of around 2 percent a year, but after 1995 this dropped to 1 percent, and in 2000 pay raises stopped altogether. Taking inflation into account, the real value of wages was now decreasing.

Faced with these difficulties, the KMT has been working toward increasing cross-strait trade and opening direct links with China.

But this is not in accordance with public opinion, which has complained that, even with limits on trade with China, bosses run off to do business there, leaving behind jobless workers. Many are also afraid that the situation will become worse if direct links are established and restrictions lifted, and feel that KMT politicians do not care about the circumstances of ordinary people.

That's how Taiwanese in the lower wage brackets turned to a sort of economic nationalism, opposing trade with China.

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