President Ma Ying-jeou (馬英九) has repeatedly stated that Taiwan’s economic development cannot be separated from that of China, while criticizing the administration of former president Chen Shui-bian (陳水扁) for what he describes as closed economic policies and telling the public how he has improved the situation.
Indeed, no country can ignore the scale of China’s market and its economic development in recent years. However, it is extremely naive to suggest that China is some kind of panacea — the answer to all of Taiwan’s economic problems. To do so would be to disregard a whole raft of problems.
First, as an economic entity, China is not a completely deregulated market. Politics plays a significant role in its economic development. Taiwanese businesses investing in China lack comprehensive legal guarantees, and there are many cases of corrupt local governments with their fingers in the cookie jar. Indeed, an increasing number of these companies are returning to Taiwan, complaining about their treatment by undesirable elements in China, or even by the government. This evidently is a serious problem.
Second, China has access to a prodigious labor pool and follows its own model of industrial development. For the short term at least, Taiwanese products enjoy an advantage in the Chinese market. However, if Taiwan fails to upgrade and improve its own manufacturing industries and continues to rely on low-tech and original equipment manufacturing (OEM), China will very soon be able to manufacture these same products at a lower cost.
It will become progressively difficult to sustain Taiwan’s traditional manufacturing industries solely by relying on the Chinese market. This is especially true given Beijing’s current development model, which entails absorbing Taiwan’s technology and using it in its own factories. For an example of this, look at what’s happening in the agricultural industry.
Third, China is making all kinds of concessions and opening up trade with Taiwan, but all these are predicated on political considerations. In other words, China has consistently and clearly placed politics over economics. Not only has it maintained that the “one China” principle is to inform all trade exchanges with Taiwan, it is furthering its goal of unification by making Taiwan increasingly economically dependent. Anyone who is naive enough to believe that politics and economics can be kept separate when dealing with China has erred in their understanding of the very basis of China’s cross-strait policy and the timetable it has set for achieving its goal.
As far as China is concerned — and perhaps for any other country too — economic development, while important, is no substitute for politics. The idea that one can avoid or dissipate political disputes through trade exchanges alone has never been borne out historically. When engaging in economic and trade exchanges with China, then, not only does Taiwan need to be careful about ensuring sustainable economic development, it also needs to consider the concomitant political implications.
Lo Chih-cheng is chief executive of the Taiwan Brain Trust.
Translated by Paul Cooper
China badly misread Japan. It sought to intimidate Tokyo into silence on Taiwan. Instead, it has achieved the opposite by hardening Japanese resolve. By trying to bludgeon a major power like Japan into accepting its “red lines” — above all on Taiwan — China laid bare the raw coercive logic of compellence now driving its foreign policy toward Asian states. From the Taiwan Strait and the East and South China Seas to the Himalayan frontier, Beijing has increasingly relied on economic warfare, diplomatic intimidation and military pressure to bend neighbors to its will. Confident in its growing power, China appeared to believe
After more than three weeks since the Honduran elections took place, its National Electoral Council finally certified the new president of Honduras. During the campaign, the two leading contenders, Nasry Asfura and Salvador Nasralla, who according to the council were separated by 27,026 votes in the final tally, promised to restore diplomatic ties with Taiwan if elected. Nasralla refused to accept the result and said that he would challenge all the irregularities in court. However, with formal recognition from the US and rapid acknowledgment from key regional governments, including Argentina and Panama, a reversal of the results appears institutionally and politically
In 2009, Taiwan Semiconductor Manufacturing Co (TSMC) made a welcome move to offer in-house contracts to all outsourced employees. It was a step forward for labor relations and the enterprise facing long-standing issues around outsourcing. TSMC founder Morris Chang (張忠謀) once said: “Anything that goes against basic values and principles must be reformed regardless of the cost — on this, there can be no compromise.” The quote is a testament to a core belief of the company’s culture: Injustices must be faced head-on and set right. If TSMC can be clear on its convictions, then should the Ministry of Education
The Chinese People’s Liberation Army (PLA) provided several reasons for military drills it conducted in five zones around Taiwan on Monday and yesterday. The first was as a warning to “Taiwanese independence forces” to cease and desist. This is a consistent line from the Chinese authorities. The second was that the drills were aimed at “deterrence” of outside military intervention. Monday’s announcement of the drills was the first time that Beijing has publicly used the second reason for conducting such drills. The Chinese Communist Party (CCP) leadership is clearly rattled by “external forces” apparently consolidating around an intention to intervene. The targets of
RSS