Recent protests in Vietnam over China’s placement of an oil rig in the South China Sea have drawn a lot of attention in Taiwan, because some of the more violent protests damaged the properties of 224 Taiwanese companies and disrupted the operations of about 1,100.
Vietnamese authorities are worried the riots will deter Taiwanese investment, with Vietnamese Prime Minister Nguyen Tan Dung reportedly promising to take measures to compensate the affected businesses. Senior Vietnamese officials are to arrive in Taipei this week to discuss compensation issues and other trade matters.
Traditional manufacturing appears to be dying out in Taiwan. It began when many labor-intensive manufacturers began relocating abroad about three decades ago. Industries such as shoe-making, food processing, textile production and the furniture sector were once the pillars of the nation’s economy, but the focus of the government now is the information and communication technology sector — at least that is how people see it.
Amid speculation that Vietnam-based Taiwanese companies may choose to relocate to China or invest at home because of safety concerns, the government has begun a campaign to urge them to return home, with the Ministry of Economic Affairs planning an investment summit Friday to explain the investment environment and incentive packages offered.
As challenges to business are now rising in China, including surges in labor and land prices, higher environmental standards as well as increases in social security and pension-related spending, overseas Taiwanese firms are certainly looking for alternatives. Of course, it is also possible that years of stagnant growth in wages might make the nation attractive to Taiwanese manufacturers.
Even though increasing domestic employment would help enhance wages and boost private spending, if the government must extend more investment incentives to overseas Taiwanese firms, an important question to be asked is: Why did these firms not move back home en masse, as expected, after the government first addressed the issue in 2012?
That is when the government announced plans to lure Taiwanese businesses home, with a goal of attracting NT$100 billion (US$3.32 billion) in each of the following two years and creating 82,000 jobs. Yet government statistics show that as of the first quarter of this year, while overseas Taiwanese pledged to invest NT$198.2 billion over the past two years, to date just 30,000 jobs have been created.
One has to wonder why the number of jobs is less than expected and question if the government has resolved problems facing investors, such as the shortage of skilled labor, land acquisition and securing loans.
Moreover, the prospect of overseas Taiwanese businesses returning home has also raised concerns about the nation’s technical and vocational education. The reality is that our recent graduates do not meet the manufacturing industry’s needs nowadays.
As the US and other developed countries pursue “re-industrialization” and the comparative advantage of investing in China and Southeast Asian economies gradually diminishes, Taiwan must re-establish the domestic manufacturing sector’s competitiveness by positioning it at the top of the global value chain. High-end and high-value-added manufacturing implies the need to adopt more automation, promote environmental sustainability and upgrade technology and research and development capabilities.
Instead of welcoming returning Taiwanese businesses with open arms, the nation needs to focus on creating a government that has consistent policies and more efficient civil servants, as well as a society that has large pools of entry-level workers and experienced employees.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
Ursula K. le Guin in The Ones Who Walked Away from Omelas proposed a thought experiment of a utopian city whose existence depended on one child held captive in a dungeon. When taken to extremes, Le Guin suggests, utilitarian logic violates some of our deepest moral intuitions. Even the greatest social goods — peace, harmony and prosperity — are not worth the sacrifice of an innocent person. Former president Chen Shui-bian (陳水扁), since leaving office, has lived an odyssey that has brought him to lows like Le Guin’s dungeon. From late 2008 to 2015 he was imprisoned, much of this
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and