Long before the protests against the cross-strait service trade agreement began on March 18, I had said that if the agreement were blocked, Taiwan’s economy would do better than forecast. Today we are faced with the facts. The student movement saved the nation just before the doors to hell were closed behind us and public confidence has increased. In March, during the student protests, exports reached US$27.76 billion, the third-highest month in history. Last month, economic indicators remained “green,” signaling steady growth, and foreign stock investors overbought for 26 days, with net purchases reaching NT$137.5 billion (US$4.6 billion).
These amounted to market approval of the political turmoil that went on for more than a month. Furthermore, the stock market index increased by 172 points during the student protests, or 1.98 percent, making it among the strongest markets in Asia.
It is clear that civil society has awoken and the resulting protest against the government has had a positive effect on the nation’s development, both politically and economically. The logic is very simple. Thanks to the student movement, Taiwan has been able to chase away the dark clouds cast by the service trade agreement and opened up the nation to international society rather than restricting it to China. If this is not bullish, then what is?
From a pro-Chinese perspective, these arguments are of course based on warped ideological reasoning. However, it is not up to pro-Chinese activists to decide what is warped reasoning and what is not; this can only be decided by history, ie, experience.
In 1996, the Taiwanese government’s “no haste, be patient” (戒急用忍) policy placed restrictions on economic contacts with China and investments in particular. It did not affect the economy or the stock market, but instead sparked a bull run, culminating in the stock index hitting a seven-year high of 10,256 points in August 1997. This is the first piece of evidence to support the argument that resisting economic integration with China is good for Taiwan’s economy.
The second is the special state-to-state dictum first expressed in July 1997. It resulted in tense cross-strait relations, but the stock market reached a 10-year high of 10,393 points.
The third was then-president Chen Shui-bian’s (陳水扁) announcement putting an end to the “active opening” policy on New Year’s Day 2006 and applying the breaks to further deregulation of cross-strait trade. The result was that the economy took a turn for the better, and 2006 and 2007 provided the best economic performance during Chen’s eight-year presidency, with the stock market almost breaking through the 10,000-point mark, reaching 9,859 points.
The fourth piece of evidence is the student movement. It is still developing, but it is clear that despite the social turmoil, public sentiment, foreign investment and exports are telling us that the movement has awoken Taiwan and that things are looking up.
Four pieces of evidence from the past. Are these a coincidence? No, it is a matter of inevitability. When cross-strait economic integration slows down, China’s attraction to Taiwan weakens and Taiwan gets a breather. This is why the economy has improved and the stock index has soared every time cross-strait trade relations have slowed down over the past 20 years.