From a short-term perspective, the sluggish exports are evidence that the international economic situation remains unstable. Economic growth in the US looks better in the short term than for the long term, and it is unlikely to remain above 3 percent. Unemployment in the eurozone stands at more than 12 percent and even Germany has begun to show signs of a recession. Apart from Taiwan’s international competitiveness being weakened by industrial innovation and marketing problems, there is also the excessive focus on China, as pointed out by the minister of economy. It has meant that Taiwanese companies have not been aggressive in the US and European markets and that they have ignored emerging markets, the markets which have seen the largest growth in demand in recent years. As China’s economic growth has passed its peak, its and Taiwan’s industries are moving from complementing each other toward competition. If Taiwan continues to deceive itself with the illusion that China is the world’s largest market and sticks to the mindset of the old “move west” policy, it is asking for trouble.
Since the signing of the Economic Cooperation Framework Agreement with China, the government has bet everything on China and that is the main source of Taiwan’s current economic problems.
Taiwan does not lack capital or talent, but the government is incapable of promoting investment to revitalize the economy. Instead, capital and talent are fleeing the country.
Together with last year’s electricity and fuel price hikes and the capital gains tax on securities transactions, the result has been that the economy has been deserted and private consumption and investment have weakened, leading to falling economic output and anemic economic growth.
Even worse, the government lacks the ability and the determination required to meet this challenge and revitalize the economy. The public, which has seen through the government’s tricks, is losing faith in the economic outlook.
Japanese Prime Minister Shinzo Abe is implementing his “Abenomics” approach in a bid to use currency, fiscal policy and growth promotion strategies to revitalize the Japanese economy, which has been in a slump for several years. Despite the risks, his efforts and determination to change the current situation have met with praise. Taiwan’s economy, on the other hand, is in the hands of Ma, and with the exception of big talk, empty slogans, broken promises, ineptitude and Sinicization, he is incapable of doing anything to meet the long and short-term challenges facing the economy. The public cannot simply sit by and wait in anticipation: It must take action.
Translated by Perry Svensson