Sun, Jun 07, 2009 page8

• EDITORIAL: What will Ma do with all that money?

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  The Computex trade show in Taipei focused a lot of attention on peripherals and consumer electronics as well as on the number of foreign buyers and business potential the event could generate.

  But what made this year’s Computex different from previous ones was that buyers from emerging markets, especially from China, increased by a large number from last year, helping make up for a decline in attendees from other countries whose economies continue to suffer from the global economic downturn.

  The participation of 45 Chinese companies this year and the record increase of 34 percent in Chinese visitors for the show was impressive. Yet what has caught even more attention from local businesses was Chinese purchasing power in the form of several trade delegations, encouraged by the administration of President Ma Ying-jeou (馬英九), which has aggressively pushed cross-strait rapprochement since taking office.

  Last week, a Chinese trade delegation led by Li Shuilin (李水林), president of the Association for Trade and Economic Exchange Across the Taiwan Straits, placed orders with Taiwanese suppliers to procure US$827 million in products, mainly computers and consumer electronics, on top of a US$1.4 billion purchase of goods the delegation is expected to place by the end of the year.

  Another Chinese delegation, led by Bai Weimin (白為民), secretary-general of the China Video Industry Association, said last week that Chinese color TV manufacturers would purchase US$4.4 billion in Taiwan-made flat panels this year, while a trade delegation from Guangxi Province purchased US$200 million in Taiwanese goods in the last week of May.

  The arrivals of these delegations, along with more scheduled for later this year, come at a time when Taiwan’s economy is expected to contract by 4.25 percent this year amid weak domestic demand and falling exports. No wonder many businesses have pinned their hopes for prosperity on Chinese purchases.

  As Taiwan still enjoys a huge trade surplus with China, Beijing’s sending more trade missions to Taipei will only widen that deficit. Therefore, aside from a gesture of goodwill to Taiwanese — as a means to reduce the reluctance of Taiwanese to interact with Chinese after years of military intimidation and political isolation — or to help bolster Ma’s policies, there is no point in Beijing continuing to send trade missions.

  While growing cross-strait economic exchange and relaxation is a trend, the issue of Chinese procurement groups has raised concerns as to whether the Ma administration is capable of using the money earned from China to improve the nation’s infrastructure in terms of roads and harbor development, as well as medical care, education and the social safety network.

  A major point of contention is whether the government will use the Chinese capital to strengthen Taiwan’s industrial competitiveness and enhance the domestic investment environment, or simply allow Taiwan’s economy to grow increasingly reliant on Chinese orders.

  The Ma government has vowed to create prosperity for Taiwanese by integrating the country’s economy with China’s. But it should not solely focus on economic benefits while overlooking other developments in the social and political arenas.
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