“Unemployment among 20-to-24 year olds at 14 percent, hardship among the young.”
That was the main headline on the front page of the Chinese-language China Times newspaper on Christmas Eve. We should be thankful it was a China Times story, or we might be accused of bad-mouthing Taiwan.
The young who are just entering the labor market are clearly having a very hard time. But why?
Not long ago, an editorial in the same newspaper gave the answer: “Taiwan is a prime example of how, although data shows that triangular trade has raised the nation’s GDP, it has increased employment in another country.” That sentence explains it all.
Triangular trade means that a Taiwanese company in Taiwan receives an order from another country and then manufactures the goods in a third country — mainly China. This is an unavoidable outcome of the relocation of companies from Taiwan to China.
Oddly, over the past dozen years or so, it is the very same paper that has continuously encouraged such relocation, accompanied by praise for the triangular trade model. It has promoted the integration of Chinese resources to strengthen Taiwan’s industrial competitiveness and claimed that China offers the business opportunity of the century.
It has also said that focusing on research and development in Taiwan while promoting manufacturing in China is a “win-win” situation, and that investing in China would expand Taiwan’s national strength.
On one hand, the paper has cooperated with attempts by big business to force cross-strait political talks through economic means, while on the other describing calls for the development of Taiwan and former president Lee Teng-hui’s (李登輝) “no haste, be patient” China policy as “isolationist,” saying such ideology harms Taiwan.
The political and economic power of big business and the media stands unopposed. Once the door to investment in China was opened, they pried it wider open still, while shutting the door on their manufacturing lines in Taiwan, thus creating a massive loss of employment opportunities for Taiwanese.
In November, production by Taiwanese businesses abroad — read: in China — reached 51.7 percent of all production by Taiwanese businesses. This may be the highest figure in Asia, and thus, youth unemployment in Taiwan may also be the highest in Asia.
If today’s young, as the China Times says, are a lost generation, then the blame should be placed squarely on the shoulders of media outlets and academics that had vociferously promoted the business relocation to China. At the very least, they are morally responsible and should acknowledge their guilt and offer a sincere apology to the young generation for their sufferings and losses.
However, no one ever seems to learn from history. Self-interest and greed mean that the same mistakes are repeated over and over again.
For the past year or two, this group of academics and media outlets have continued to beat their drums and to ask the government to abandon its management mentality and let Taiwanese banks invest in China. The pressure they are applying would make even Wall Street green with envy.
Any move by a Taiwanese bank in China is instantly rewarded with big headlines, and lately, the signing of the Cross-Strait Currency Clearing Cooperation Memorandum has been praised for offering business opportunities worth trillions of New Taiwan dollars. It is said that it will increase GDP growth, that Taiwan now is on its way to becoming an offshore center for the Chinese yuan and that yuan savings have reached 1 trillion (US$160.5 billion) in just eight years.
These academics and media outlets are repeating the same language and pressure they have applied to their campaign to promote the relocation of businesses to China over the past decade.
Taiwan’s banks are attracted by the potential profit that China offers — which is supposed to be several times what they can make in Taiwan. When Taiwanese businesses first started relocating to China, they made profits for a short time, but now our young generation are paying the price.
The same thing will play out again and Taiwanese banks will make handsome profits for a limited period.
One can only wonder who will pay the price for the resulting neglect of the domestic banking market 10 years down the road. The public as a whole, or will the next young generation become yet another lost generation?
Taiwan is not the US, and we cannot afford not to worry about this issue.
Huang Tien-lin is a former national policy adviser to the president.
Translated by Perry Svensson