Last month, political commentator Wang Hsing-ching (王杏慶), writing under his pen name, Nan Fang Shuo (南方朔), published an article about how the restructuring of the “strategic economies” of the US and Europe is accelerating the marginalization of Taiwan. The main thrust of the article is that, faced with a rising China, Taiwan increasingly depends on making easy money from Beijing through the Economic Cooperation Framework Agreement (ECFA).
In contrast, South Korea is making money through hard work as it strives to develop its European and US markets. As a result, Wang said, Seoul is demanding recognition as one of the world’s most advanced societies and quickly elevating its position in the global manufacturing chain. The US and EU are establishing free-trade zones with South Korea, whereas Taiwan continues to rely entirely on the ECFA, which is leading to Taiwan’s exclusion from Europe and the US’ economic strategies.
Wang’s critique of the ECFA hits the nail on the head. I would also add that the ECFA is causing Taiwan to be rapidly peripheralized by China, as it becomes more integrated with the Chinese economy. Whereas marginalization is an external process of being excluded, peripheralization is an internal process of being absorbed into something else.
Peripheralization has reduced Taiwanese manufacturers’ will to upgrade. Taiwan faces a host of problems, such as high unemployment, low wages, a rapidly widening wealth gap, insufficient domestic investment and weak economic growth. These problems are the effects of not just government incompetence, but also the core-periphery effect produced by the ECFA, with China at the core. Furthermore, this effect is spreading, according to recent economic data.
Taiwan’s exports contracted again in September. Total exports were US$24.61 billion, which was 4.6 percent down from August, and only a 9.9 percent increase on the same period last year. Annual export growth has been less than 10 percent for two straight months. One may think this is a result of global factors, but South Korea’s exports for September grew 19.6 percent compared with the same period last year. And despite pressure from a strong yen, Japan’s exports still grew by 12.7 percent in the same period.
Taiwan’s export orders in September were even worse, totaling US$36.96 billion. Annual growth in export orders was 2.72 percent, the lowest level in 23 months. Calculated in New Taiwan dollars, it represents an annual drop of 3.92 percent.
Another aspect is that investment in China by Taiwanese in the first nine months of this year came to US$10.54 billion, which is 23.06 percent up from the same period last year. That follows last year’s surge of 102 percent, highlighting the ECFA’s effect, as investment money continues to bleed out of Taiwan. When Taiwan has no blood left to shed, its investment in China will start to fall, but only because by then it will signal that Taiwan’s economy has become enfeebled.
The result of this investment outflow is that workers in Taiwan are again having to take unpaid leave. Taiwan’s jobless rate for September remained at 4.28 percent, the highest among the four “Asian Tiger” economies.
Taiwan’s stock market is still the weakest in the Asia-Pacific. For this year up to Oct. 24, the stock markets in Indonesia and the Philippines rose. South Korea’s dropped by 7.44 percent and Japan’s by 13.43 percent, but in Taiwan it fell by 16.74 percent.
It is time for President Ma Ying-jeou’s (馬英九) administration to stop making excuses. Boasting about things like cutting the sales tax on rice wine cannot deceive the public. The data state loud and clear what the ECFA is doing to Taiwan.
Huang Tien-lin is a former national policy adviser to the president.
TRANSLATED BY JULIAN CLEGG
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under