The results of a survey by Academia Sinica released on Sunday last week showed that younger Taiwanese are increasingly putting the nation’s sovereignty above economic concerns in cross-strait relations.
While it is a positive development that young Taiwanese recognize China as a threat to Taiwan’s democracy, the survey question itself is misleading, as no change in the cross-strait relationship would produce any tangible economic results for the average Taiwanese worker. Many local media reports have already debunked China’s so-called “31 incentives” — largely a rehashing of existing policies aimed at Taiwanese students and workers who seek development in China — and, with a few rare exceptions, Taiwanese businesses that enter the Chinese market are largely driven out by unfair practices that favor Chinese companies.
Taiwan has seen economic growth of between 2 percent and 4 percent over the past decade that has continued under the administration of President Tsai Ing-wen (蔡英文). That growth rate dropped to less than 1 percent only once, in 2015, due to poor global demand in the electronics sector. Taiwan is an important part of the global electronics supply chain and, despite its rhetoric, China needs components and expertise that it will continue to source from Taiwan, regardless of who is the nation’s president.
However, these facts are often lost on people in southern Taiwan who remember the economic boom before the 1980s, when Kaohsiung served as a major regional base of manufacturing. Those jobs moved to China and today even China is trying to transition away from manufacturing. Any attempts to turn Kaohsiung back into a manufacturing base would do little for Taiwan’s economy, which is following the global trend toward services. It would also alienate the US, which is locked in a trade war with China and would grow suspicious of what would likely be repackaged Chinese goods exported from Taiwan.
Then there are those who are upset because China is restricting the number of tour groups to Taiwan, which means less people to peddle fruit and other cheap wares to. Populist sentiment emerging from this group of people has allowed the likes of Kaohsiung Mayor Han Kuo-yu (韓國瑜) to rise to prominence. However, as the Los Angeles Times said in a Feb. 10 article, Taiwan’s problems cannot be solved by tourism, agriculture or short-term interest in a politician; instead, the nation’s economy needs restructuring and a shift away from low-value-added midstream components exported to China with low returns for Taiwanese manufacturers.
Those components are provided by Taiwan’s 1.4 million small and medium-sized enterprises (SMEs), which employ about 9 million workers. The prevalence of these SMEs is one of the reasons that Taiwanese workers have comparatively low wages and lack strong unions. It is also why Taiwan is less internationally competitive than regional neighbors Japan and South Korea, where large corporate conglomerates have access to business opportunities in a variety of sectors, and allow for rapid and stable economic growth.
SMEs are more easily affected by global recessions and fluctuations in market demand, and their relative insecurity about the future makes them more reliant on China and less willing to pay higher wages — instead making up for lower wages with large annual bonuses that are contingent upon company performance.
Taiwan is shifting toward a value-added and service economy, and is looking to reduce its dependence on China. It is also looking to attract foreign investment by improving infrastructure via the Forward-looking Infrastructure Development Program. However, Taiwan must also seek to make itself more internationally competitive. This might be accomplished through better branding and mergers that form larger, more diverse corporations. Better competitiveness could secure the nation’s place in regional trade agreements and give workers confidence.
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
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
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry