Sat, Jul 27, 2013 - Page 8 News List

Government responsibility to industry

By Kuo Chen-hero 郭振鶴

Take distribution, for example. Commercial competition between wholesale and retail is based on distribution strategy. It is often said, whoever controls distribution, controls the market. In this too, the government should look at the distribution service sector separately from how it approaches other industries. Distribution directly affects the consumer, so the problems arising from deregulation in this sector will be even more sensitive.

The government has said that we stand to gain more from the service trade agreement than we will lose. A government simply cannot conduct matters by sacrificing this or that industry. It cannot say that if a certain industry is to fall by the wayside then so be it. Did the government discuss the pact with the sectors that were to be affected by it? The government should have announced a set of measures for these sectors, such as preventing malicious price-cutting competition by Chinese companies and improving Taiwan’s industrial environment. As soon as Chinese companies make inroads here, there will be much more room for China to conduct talks with Taiwan and we could lose everything all at once.

The government’s authority is founded upon the support of the public. When the government loses this support, it simultaneously forgoes its mandate. The government seems to be incapable of grasping this point when dealing with certain issues, the service trade pact being the most important example. The government is incapable of understanding the public’s will. If the government continues to not learn its lesson, the Chinese Nationalist Party (KMT) is likely to see power slip away.

Kuo Chen-hero is an adjunct professor of economics at Soochow University.

Translated by Paul Cooper

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