Chinese People’s Political Consultative Conference member Hu Angang (胡鞍鋼) once said there is no need for China to take up arms against Taiwan, and that doing so would be the worst option. Hu said Taiwan’s economic dependence on China runs so deep that economic sanctions would bring Taiwan to its knees in seven days. In Hu’s words, Taiwan is like a diabetes patient in need of China’s insulin.
This 2006 statement is indirect evidence that China may launch economic sanctions against Taiwan at any time. At the time, cross-strait trade had reached a total of US$100 billion, and Taiwan’s trade surplus with China had reached US$66.13 billion. Today, these figures have repeatedly been exceeded. With the opening up of direct transportation links, dependence has reached a new level.
President Ma Ying-jeou (馬英九) said that direct transportation links spell the end of the “no haste, be patient” and “effective management” policies. It seems Taiwan really has become reliant on Chinese insulin.
Saying direct links are turning Taiwan into a diabetic may turn out to be more than mere satire because of government incompetence. Speeches by Ma and Premier Liu Chao-shiuan (劉兆玄) at the three links inaugural ceremony clearly show that the government is basing deregulation on the ideological viewpoint that anything that involves opening up to China is a good thing.
The lack of complementary measures to open Taiwan to the international community means that the practical effects can be easily determined. Due to factor-price equalization, Taiwan’s increasingly closer connection to low-wage, low-cost China is resulting in falling, rather than increased, incomes. Forging closer ties with an economy whose exports are suffering heavily from the global economic slowdown will lead to Taiwan being sucked dry rather than benefiting from these ties.
The government likes to talk about the “one day community” concept, as it will only take 80 minutes to fly from Taipei to Shanghai, less time than it takes the high speed rail to run from Taipei to Kaohsiung.
As tourist spots in China are cutting prices to gain competitiveness, and given the lower cost of living in China together with accompanying government policies, one wonders whether the Ma administration has made any preparations to help the domestic tourism industry strengthen its competitiveness or whether it will let companies fend for themselves and let the Chinese-controlled market decide the outcome.
Government data shows that cross-straight charter flights have increased Taiwanese tourism to China, while Chinese tourism to Taiwan remains unchanged. If this continues, domestic hotels, bus companies and tourist shops will suffer, aggravating domestic unemployment. It would be no exaggeration to say that the deregulation seems aimed at boosting the Chinese, not the Taiwanese, economy.
Liu’s statement that the benefits to Taiwanese agricultural product and fresh foods industries from direct cross-strait links will arrive “faster than if they were delivered by express delivery” distorts the facts and could be construed as deceiving farm and fishery workers.
The first sea transport carried textile and paper raw materials, and it will bring back malt, vegetables and corn starch. This is not a one-way street for selling Taiwanese oranges and grouper fish to China, and future price dumping of Chinese agricultural produce is all but certain. Taiwan’s agricultural sector will bear the brunt of these developments and within six months, Taiwanese farmers will feel the pinch.