Would voters in Taiwan vote the same way today as they did on March 22? Some, especially in the business sector, are still hopeful. Others are “still not clear.” But already, surely, there are a considerable number of people who would vote differently.
In the news one sees government plans that were expected, many of which are not yet agreed to by China, and others that are not clear. Many more are about what is wrong for Taiwan or what should be done, but that has not had an impact on what the government does. And little political opposition is heard.
In the run-up to the legislative and the presidential elections, Taiwan’s economy was touted as being in poor health and deteriorating, although it was not as bad as it was made out to be. The economy has declined since the new government took over, but much of that was based on global economic changes and not so much government policies.
Despite the rather large number of people concerned about having a pro-China government, the Chinese Nationalist Party (KMT) continues to move in that direction. In May the government approved reforms allowing greater investments by Taiwanese financial firms in China. The Ministry of Economic Affairs is working on changes in cross-strait trade and economic ties, easing the cap on China-bound investment. That is the first step. Then the government will list some restrictions that prevent companies in certain sectors, such as high-end semiconductors and liquid-crystal displays, from investing in China before allowing Chinese companies to invest in Taiwan.
President Ma Ying-jeou (馬英九) has said Taiwan should be more open and relax its rules on Chinese investment by Taiwanese chipmakers. But Taiwanese semiconductor companies in China have reported losses. They say the market is not as big as they hoped, the Chinese government has abolished several tax benefits for Taiwanese businesspeople and that labor costs are now higher than in Thailand.
More important, however, is the extent to which it will be acceptable to open Taiwan’s expertise on the semiconductor industry to China. Taiwan is a world leader in the industry, with a large number of expert employees. It surpasses China now, but moving these experts and their knowledge across the Taiwan Strait could quickly change that. There is also the interest of the US in controlling exports to specific countries, including China.
At the same time, the Straits Exchange Foundation chairman is expected to pursue “common party” policy with China, though the timing is not clear. Should it be discussed, the purpose would be to create a free-trade agreement, liberalize cross-strait trade and develop an economic coordination system that will establish economic integration and help protect Taiwanese business interests in China. The latter would be similar to that of Beijing and Hong Kong, and could cause problems within Taiwan.
It seems that every day there are reports of Ma or other government leaders promising that more changes will be made toward China, mainly economically but also politically. Many of these ideas are being voiced by those who believe they will gain from the changes, but the government also believes moving closer to China would be best for Taiwan. But there are also reports that moving in that direction may not be best for Taiwan for a variety of reasons. At the same time, economic conditions worldwide are causing countries to tighten their own economic policies, including China and the US.
Under these circumstances, is it wise to move forward and make agreements with China on matters that will be changing continuously?
Nat Bellocchi is a former chairman of the American Institute in Taiwan and a special adviser to the Liberty Times Group. The views expressed in this article are his own.
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