Usually, the service sector is quite labor-intensive. Since the financial services sector is more capital-intensive in nature, it should be negotiated separately. By including the financial services sector in the cross-strait service trade agreement, the public may feel that the government is trying to benefit certain enterprises or even move toward political unification.
The government claims that it signed the agreement to find a way out for Taiwan’s economy. Unfortunately, it seems that using this agreement to boost the economy is a bit like putting out a fire with gasoline — it will only cause Taiwan’s economic and employment situation to deteriorate even further.
If we want to resolve Taiwan’s economic problems, we should start out with the most fundamental aspects, such as income levels, consumer confidence and demand. The government must act cautiously when dealing with the cross-strait service trade agreement.
Kuo Chen-hero is an adjunct professor of economics at Soochow University.
Translated by Eddy Chang