The Libery Times Editorial: Chinese inroads spell disaster

Fri, Jun 28, 2013 - Page 8

In public, the administration of President Ma Ying-jeou (馬英九) has said there will be no talk of unification, independence, nor military action, yet it is actively pursuing a policy of eventual unification with China. It is doing so using a two-pronged approach: one being political unification; the other, economic unification.

The administration is clearly in cahoots with Beijing in achieving economic convergence first, followed by political convergence, hoping businesses will force the political issue.

Their method is first to marginalize Taiwan, engineering a periphery-core relationship of dependence. From there, to make Taiwan a “special zone” politically, extinguishing Taiwan’s sovereignty and demoting Taiwan to a mere local administrative unit, with Beijing as the center.

Following the signing of the services trade pact between Beijing and Taipei, and the drive to establish representative offices in each other’s territories, crucial steps have been taken in laying of both the economic and political foundations.

In the five years since Ma took office, he has performed very poorly, which is reflected in consistently falling popularity ratings and most people’s view that he is an incompetent leader.

Yet he has shown startling commitment and progress in achieving eventual unification, in spite of the public’s objections.

In fact, because objectors have tried to block his way, he has instead withdrawn and taken to engaging the enemy in closed-door negotiations, signing himself and his country little by little, step by step, into indenture.

The speed of progress in laying these foundations has been the most startling of all.

In a few years, the government has forced through one policy after the other, from the Economic Cooperation Framework Agreement (ECFA) to the services trade agreement. The Taiwanese economy is moving from one in which its exports are over-reliant on China to one in which China is also impacting its domestic market.

As things are now, more than 900,000 small and medium-sized entreprises (SME) and over 5 million jobseekers would be affected. Taiwan’s economy is at risk of total collapse and the nation would be easy kill for China, with the conditions for political unification ripe.

In trying to push his eventual unification agenda through, Ma has been brash and overbearing. Before the ECFA was signed, public opinion was overwhelmingly against it, yet Ma ploughed on regardless, using the KMT majority to force it through.

The results have been what those who had objected to it had feared all along: Not only did the promised, significant benefits fail to materialize, but worse still, Taiwanese industries were weakened as a result.

Yet, before signing the services trade agreement, the Ma administration neglected to conduct a full impact assessment, nor did it consult with industry or carry out policymaking in a transparent way. Instead, it acted like a despotic ruler.

The government has conceded the deregulation of Taiwanese services relating to all aspects of life — from the cradle to the grave — with absolutely no safeguards in place.

It has claimed this deregulation is mutually beneficial, but Taiwan has a population of 23 million, compared with China’s 1.3 billion. The difference in the sizes of the respective economies is huge. Yes, Taiwanese businesses are already relocating to China en masse, but the numbers involved mean that they will scarcely dent the jobs market in China or threaten the survival of Chinese companies. However, if Chinese flood through our battlements, Taiwanese SMEs will soon become engulfed, finding it very difficult to survive.

The sectors that have been deregulated are the very ones that are struggling, the SMEs. China has the advantage in human resources, and as soon as Chinese companies are allowed to operate in Taiwan, our own local low-capital, labor-intensive businesses — hair salons, breakfast cafes, launderettes and cleaners — will find it very difficult to compete and stay afloat.

Furthermore, an investment of US$300,000 entitles a Chinese company’s proprietor and two managerial personnel to relocate to Taiwan. For every additional investment of US$500,000, an extra staffer is permitted, up to a maximum of seven. The problem is, once the Taiwanese side has officially confirmed the size of the initial investment, the Chinese investors are free to take it back, making the investment clause an open door for Chinese immigration.

In other words, once the service trade agreement has been signed, Chinese personnel, products and services will be able to make substantial inroads into Taiwan, which will be disastrous for our economy.

Despite this, the sections of the media that Ma has in his back pocket are singing a chorus of consent, attacking dissenters for so-called provincialism and ideological intransigence. They are browbeating the public by saying that if they oppose exchanges with China, it will only lead to Taiwan’s further marginalization and that dire economic consequences for the foreseeable future will eventuate as a result of failing to ride the tail of the Chinese dragon.

In fact, the opposite is true. Taiwanese companies have been relocating to China and investing as much as US$200 billion, making us over-reliant on the China market. The problem is more how Taiwan can extricate itself from this reliance. Stagnant or falling salaries and persistent rising unemployment are a direct consequence of this reliance.

Some commentators are saying that since China has deregulated more industries than Taiwan, we are the true beneficiaries of this pact. However, China’s deregulation does not mean there are no obstacles to Taiwanese companies: There will still be layer upon layer of domestic laws, serving as invisible barriers to entry and preventing Taiwanese companies from enjoying promised benefits.

In addition, there are a number of Taiwanese SMEs that the government should protect from external competition. They will not be able to compete with China’s nationalized companies, which care more about increasing their market share than they do about profits.

Taiwan’s survival depends on two things: our democracy and our economy.

In his pursuit of eventual unification, Ma is intent on destroying both. This is why he has pushed for this services trade agreement and the establishment of representative offices on either side of the Taiwan Strait.

Both are major steps in laying the foundations for economic and political unification, with eventual unification as the ultimate goal.

If that day comes, Taiwanese will be in real trouble. They will rue the day they allowed it to happen.

Translated by Paul Cooper