President Ma Ying-jeou (馬英九) has repeatedly declared that cross-strait economic exchanges will bring many benefits. Is this really true? Can the Taiwanese agricultural sector afford an economic cooperative framework agreement (ECFA) with China? Has the Ma administration properly assessed the possible impact of signing an economic pact with China on the nation?
The launch of direct air and sea transport links with China has not contributed to the incomes of Taiwanese farmers and fishermen. Ma once said that the export of agricultural produce would increase by 20 percent and that the revenues of farmers and fishermen would increase by between 10 percent and 15 percent after the opening of direct cross-strait transport links.
In reality, Taiwan experienced a deficit of NT$9.5 billion (US$279 million) in agricultural product trade with China last year. The gap has since widened further.
Ma said that market deregulation would be beneficial to Taiwanese exports but failed to address the problem that imports would increase at a faster pace than exports.
In addition, the government’s policy to export locally grown bananas and oranges to China in order to revitalize the nation’s fruit industry is nothing short of fraud. Taiwan’s trade deficit in fruit with China topped NT$380 million last year.
Is Taiwanese fruit really in such great demand in China after the resumption of talks between the Chinese Nationalist Party (KMT) and the Chinese Communist Party?
The reality is manufacturing costs in Taiwan are much higher than in China and Taiwanese fruit shops in China have long disappeared from the scene.
The plan to export Taiwanese bananas and oranges to China was just political promotion for the 2006 agricultural forum in Boao in Hainan Province and the signing of direct air and sea links last year.
Sold for only half the reasonable market value in China, growers of these two fruits could not compete without subsidies.
Moreover, Taiwanese agricultural technology is flowing to China and Taiwanese brands are being counterfeited. China has acquired the various agricultural production techniques for notable Taiwanese items such as oolong tea, black pearl wax apples, crown dates, golden bright mangos, atemoyas, giant groupers and moth orchids.
The outflow of these techniques could cause Taiwan enormous economic losses. Take the Japanese market for example.
In 1990 — not long after Taiwanese were allowed to visit their relatives in China — Japan was the second-largest importer of Taiwanese food products, to the value of ¥337 billion (US$3.4 billion).
Last year, the figure had dropped to only ¥93 billion. Japan used to be a major market for Taiwanese agriculture, but today most of that trade has been taken over by China.
More worrying, inferior Chinese agricultural products have repeatedly been exposed around the world in recent years. Many Taiwanese products have been counterfeited by Chinese producers. Sooner or later, these China-made “Taiwanese” products will have a negative impact on the high market prices and good reputation that Taiwanese products enjoy.
The liberalization of cross-strait economic exchanges is a crucial policy for Ma’s administration but he has only been making empty promises that fail to stand up to scrutiny. The government does not seem prepared to come up with measures to cope with the possible impact of market deregulation on the nation.