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Goodbye, Paris, more pain to come

`Who would have thought that the DPP government could have been brainwashed by the education system and the media and sought to be close to China?'

On Sept. 28, EVA Airways Corp said that as of Nov. 23 it would no longer offer flights from Taipei to Paris, a service it had provided for 14 years.

The company gave many reasons for this decision, from the cost of entering Russian airspace becoming too high to increases in the price of fuel to it not having the Fifth Freedom of the Air, which would give it the right to fly passengers from a second to a third country.

Industry watchers said flights to Europe for both national airlines -- EVA Airways and China Airlines -- were generating revenue losses.

It is sad that EVA Airways had to cancel its flights to Paris because of business difficulties. But times have changed.

When EVA started its service to Paris in 1993, Taiwan was in the middle of its economic miracle. Its foreign reserve was second only to Japan's.

Three European countries also at the height of their economic power -- the UK, France and Germany -- were all eager to establish direct flights to and from Taiwan.

But all good things come to an end. The ensuing enthusiasm for China among Taiwanese businesses prompted the quick growth of the Chinese economy. This in turn led many Taiwanese businesses to invest in China, to such an extent that China's gains became Taiwan's losses.

From that point onwards, Taiwan's development of the European market began to stagnate. The percentage of exports to Europe as a part of total Taiwanese exports went down 17.1 percent from 1992. The government's active opening policy in 2001 accelerated this trend, and the percentage of Taiwanese exports to Europe went down from 16.3 percent in 2001 to 12.3 percent last year.

Stagnating trade with Europe naturally led to a decline of business travelers to and from Europe. Under such circumstances, any increase in cost, such as the cost of using another country's airspace, or the price of fuel, can be the straw that breaks the camel's back.

The demise of EVA Airways' flights to Paris once again proves the cruel truth that too much investment in China is not good for the international position of Taiwanese companies.

Taiwan's shrinking market share in Europe inevitably influenced its visibility there. While the market share of Taiwanese exports to the European market declined every year, from 3.08 percent in 1999 to 2.69 percent last year, China's share increased, from 4.67 percent in 1999 to 19.7 percent last year.

More European companies abandoned Taiwan and started trading with China. It was a natural development, therefore, for them to make Shanghai their new hub for East Asian business and there was very little Taiwan could do about it. After all, business is about making profit.

This also influenced European governments and over time the number of European countries friendly to Taiwan decreased, as did the voices speaking in the defense of Taiwan. This is the reason Taiwan has become increasingly marginalized globally.

When the Democratic Progressive Party (DPP) came to power in 2000, Taiwan swept away all the evils left over from the colonial era and began developing a comprehensive policy for the globalization of the economy.

Who would have thought that the DPP government could have been brainwashed by the education system and the media and sought to be close to China?

The old "no haste, be patient" policy that looked pan-blue but was pan-green at heart, was thrown straight into the trash can by the new government, which instead implemented a pan-blue economic policy, in which globalization was virtually the same as entering the Chinese market. This caused an abrupt end to Taiwan's strong global position.

The market share of Taiwanese products in the world except China shrank fast. The most worrying aspect of this is the declining percentage of Taiwanese products on the US market, which went from 3.33 percent in 2000 to 2.06 percent last year, a decline of 38 percent. During the same period, Chinese products went from 8.22 percent to 15.5 percent.

As a result of this growth, China's influence on the domestic US market is growing every day. This is also one of the main reasons why Taiwan's diplomatic relations with the US have suffered in the past few years. If this situation continues, it will endanger the nation's survival.

The pan-blue camp always said that if it were not for the positive trade balance of US$27 billion with China last year, Taiwan would already have a trade deficit. Government officials never came up with a good answer to this claim, because the DPP government's economic policy is identical to that of the pan-blue camp. The only difference lies in the speed by which the policy is implemented.

Taiwanese do not know that current woes are the result of the government's pro-China trade policy, which has caused Taiwanese companies to flock to China and let Chinese companies take over international markets. The end of EVA Airlines' flights to Paris is a direct result of this policy.

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

Translated by Anna Stiggelbout
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