After signing the proposed economic cooperation framework agreement (ECFA) with Beijing, Taiwan will have to open most of its service sector businesses to China within a limited period of time.
The production value of Taiwan’s service sector exceeds 70 percent of the nation’s total economic output, and service sector employees make up 60 percent of the total work force. Within the service sector, commercial services — including the retail, wholesale and hospitality industries — account for 20 percent of the nation’s total output. With 2.5 million employees — 25 percent of Taiwan’s work force — it is the sector with the biggest work force.
The government plans to open the nation’s retail, wholesale and hospitality industries to Chinese investment in line with the treatment given to other WTO member states. Once an ECFA is signed, Chinese businesspeople will be able to invest and run businesses in these industries. Chinese will also be allowed to open shops in the nation’s urban and rural areas, on big roads and back streets.
Taiwan and China share a common language. In overpopulated China, many people hope to make money in Taiwan. Chinese enterprises and self-employed entrepreneurs lack legal and ethical understanding and use illegal means to beat the competition. They have the backing of their authoritarian country, which claims that Taiwan is part of its territory. This will make it difficult for Taiwanese retailers to survive, meaning they may in the end be taken over.
Based on the treatment given to other WTO member states, Taiwan will have to grant residence and work permits to Chinese retail managers. The initial visa is valid for three years, which is then renewable on a one year basis indefinitely. This would cause two problems.
First, if a Chinese enterprise or individual entrepreneur opens a store in Taiwan, a Chinese manager will be sent to head the store. A small shop, however, would only have three or four workers, including the manager. That means one local worker would lose his job if a Chinese store replaces a Taiwanese one.
In light of the large number of small businesses here, the unemployment rate will surge once Taiwan opens its retail, wholesale and hospitality industries to Chinese investment. Chinese enterprises bend the rules by labeling the large number of Chinese workers it hires as managers, consultants or experts. Chinese firms hiring illegal Chinese workers for Chinese projects overseas is a good example. Can the Taiwanese government and administrative system stop this?
Second, because of the unclear “one China” situation, it will be difficult to deny Republic of China (ROC) citizenship and identity cards to Chinese workers once they have resided in Taiwan for a certain period of time. This will lead to political and social problems, with new immigrants replacing local residents. It could even lead to ethnic conflicts like the confrontation between Hans and Uighurs in Urumqi, China.
Retailers and businesses in the hospitality industry, from big hotels to tiny breakfast shops, provide a key employment channel. Unfortunately, the government has failed to state the negative impact an ECFA will have on this employment channel, and it will not allow a referendum or allow open debate.
One of the solutions for the Taiwanese to save themselves is to not vote for candidates supported by Ma in the local government elections tomorrow. Otherwise, he may think the public supports an ECFA.
Lin Kien-tsu is a member of the Taiwan Association of University Professors.
TRANSLATED BY EDDY CHANG
US President Donald Trump and Chinese President Xi Jinping (習近平) were born under the sign of Gemini. Geminis are known for their intelligence, creativity, adaptability and flexibility. It is unlikely, then, that the trade conflict between the US and China would escalate into a catastrophic collision. It is more probable that both sides would seek a way to de-escalate, paving the way for a Trump-Xi summit that allows the global economy some breathing room. Practically speaking, China and the US have vulnerabilities, and a prolonged trade war would be damaging for both. In the US, the electoral system means that public opinion
In their recent op-ed “Trump Should Rein In Taiwan” in Foreign Policy magazine, Christopher Chivvis and Stephen Wertheim argued that the US should pressure President William Lai (賴清德) to “tone it down” to de-escalate tensions in the Taiwan Strait — as if Taiwan’s words are more of a threat to peace than Beijing’s actions. It is an old argument dressed up in new concern: that Washington must rein in Taipei to avoid war. However, this narrative gets it backward. Taiwan is not the problem; China is. Calls for a so-called “grand bargain” with Beijing — where the US pressures Taiwan into concessions
The term “assassin’s mace” originates from Chinese folklore, describing a concealed weapon used by a weaker hero to defeat a stronger adversary with an unexpected strike. In more general military parlance, the concept refers to an asymmetric capability that targets a critical vulnerability of an adversary. China has found its modern equivalent of the assassin’s mace with its high-altitude electromagnetic pulse (HEMP) weapons, which are nuclear warheads detonated at a high altitude, emitting intense electromagnetic radiation capable of disabling and destroying electronics. An assassin’s mace weapon possesses two essential characteristics: strategic surprise and the ability to neutralize a core dependency.
Chinese President and Chinese Communist Party (CCP) Chairman Xi Jinping (習近平) said in a politburo speech late last month that his party must protect the “bottom line” to prevent systemic threats. The tone of his address was grave, revealing deep anxieties about China’s current state of affairs. Essentially, what he worries most about is systemic threats to China’s normal development as a country. The US-China trade war has turned white hot: China’s export orders have plummeted, Chinese firms and enterprises are shutting up shop, and local debt risks are mounting daily, causing China’s economy to flag externally and hemorrhage internally. China’s
RSS