A certain Chinese-language newspaper recently ran an editorial entitled: “Change Needed If We Are to Break the 22K Spell.” The 22K referred to was the NT$22,000 that university graduates can expect to earn as a starting salary, a figure lower than it was 14 years ago.
The percentage of higher education graduates emigrating once they finish university to search for employment has now reached 61.1 percent, the highest in the world, the editorial said.
It added that over the past 20 years Taiwanese manufacturing increasingly relied on a business model in which Taiwan-based companies take orders for goods, but outsource the production of those goods to manufacturing plants based overseas, especially in China.
While this has been happening, salaries at home have stagnated.
Taiwan has rapidly revamped its business model by shifting its manufacturing base to China, ignoring continued investment and improvements in its domestic industry.
The unfortunate product of all this is that graduate salaries are slumbering under the 22K spell, the editorial said. If this spell is to be broken, the current growth model has to change. If Taiwan is to increase domestic demand and local manufacturing, as well as stem the graduate outflow, it is going to have to change the way it approaches domestic investment and labor costs.
This article is for the Liberty Times (the Chinese-language sister newspaper of the Taipei Times). The Liberty Times has been arguing for a more “local” economy for 20 years. Now, the United Daily News, the Chinese-language newspaper that published the editorial, has finally come around to this way of thinking.
One could say that during the past five years under President Ma Ying-jeou (馬英九), many have been living a kind of “China dream,” one that the United Daily News has supported all the way.
Only now is it waking up and smelling the coffee.
In the late 1980s, the nation had just embarked on its democratization process and cross-strait relations were starting to thaw after 40 years.
Taiwan was riding high, doing better than the other “Asian Tigers,” and China looked to it for investment, technology and its original equipment manufacturing business and export model. This was China’s “Taiwan dream.”
Not long after Taiwan started on its “China dream.”
Several academics, both excited by the thawing relations between the two sides and troubled by pangs of remorse at having abandoned China to indulge in its culture in Taiwan, wanted to extend a helping hand to the old country and give it the benefit of Taiwan’s experience. They wanted to see cross-strait economic integration, dreaming of a “Greater China” economic conurbation.
In the early 1990s, former president Lee Teng-hui (李登輝) got caught up in the “China dream,” hoping that China could become a kind of economic hinterland for Taiwan. What he saw was a market comprised by China’s 1 billion strong population, and how this could help make Taiwan a business hub in the Asia-Pacific region.
He envisaged using the thaw in cross-strait relations to exploit China’s position and qualities to develop an Asia-Pacific hub in six major areas: shipping, air freight, manufacturing, finance, telecommunications and media.
Lee would later temper his enthusiasm by introducing his “no haste, be patient” policy and ultimately abandon the China dream.