The Directorate-General of Budget, Accounting and Statistics (DGBAS) recently released data on last year’s average monthly income in Taiwan. The data showed that the average monthly income was NT$44,739 (US$1,500), which is lower than the 1998 average of NT$44,798. This clearly shows that Taiwan has reverted to where it was 15 years ago in terms of average salaries.
Because similar reports have been so frequent over the past few years, most Taiwanese already probably feel pretty numb when they hear such statistics. If we look back at the five years that President Ma Ying-jeou’s (馬英九) government has been in power, we will see that apart from real wages dropping, other important economic indicators, such as foreign investment, the ratio of products produced by Taiwanese companies overseas, as well as the market share Taiwanese products enjoy in the Chinese market have all worsened.
This shows that Taiwan’s current economic difficulties are not as simple as Premier Jiang Yi-huah (江宜樺) would have Taiwanese believe, considering his recent remark that “Everyone thinks they are being underpaid.”
In 2006 and 2007, Taiwan managed to attract US$13.9 billion and US$15.3 billion in foreign investment respectively. This not only created employment, it also helped acquire advanced foreign technology, while increasing domestic productivity.
However, from 2008 to last year, the situation soured. Apart from 2008, when Taiwan still attracted about NT$8.2 billion in foreign investment, the other five years during that period only saw foreign investment of about NT$4 billion to NT$5 billion each year.
Furthermore, the ratio of products produced overseas by Taiwanese companies who have received orders from foreign countries has gone from 47.05 percent in December 2007 to 54.08 percent at the end of last year.
This shows that despite all the talk from the Ma administration about improving the domestic investment environment and encouraging Taiwanese companies doing business overseas to return home to invest, the problem with many major industries relocating to other countries is continuing to worsen.
As far as the market share for Taiwanese products in China goes, in 2007, that share was still relatively high at 10.6 percent. However after that year, it started to decline and last year, it had dropped to 8 percent.
The Economic Cooperation Framework Agreement (ECFA) took effect in September 2010. Its original policy target was to ensure that Taiwan could gain access to Chinese markets at an earlier stage than Japan or South Korea, allowing Taiwan to replace these countries in the Chinese market.
However, this target has not been met and the difference in market share maintained by Taiwanese and South Korean products has gone from a mere 0.3 percent in 2007 to 1.4 percent last year.
Clearly, Ma’s policies are not working as they should.
Ma has said that many of Taiwan’s problems are just “illusions.” He said that protests by laid-off workers at shuttered factories cause many people to incorrectly think that Taiwanese workers have it much harder than they really do.
However, just what sort of economic data can his government provide to prove that the nation’s economic situation and the lives of Taiwanese are in fact good and that we live an “illusion” where we have got it all wrong?