The Liberty Times Editorial: Service trade deal is the final blow

Wed, Jul 24, 2013 - Page 8

As more evidence comes to light, the truth gradually becomes clearer and the public finally find out what really happened last month when the Chinese Nationalist Party (KMT) and the Chinese Communist Party (CCP) signed a service trade agreement. The pact was signed behind closed doors following negotiations in which the administration of President Ma Ying-jeou (馬英九) exposed its underlying agenda.

The situation is now clear as day: Ma’s is an ideologically driven, pro-Chinese government that relies on a revived authoritarian decisionmaking process to direct a bureaucracy that places theory ahead of practice.

The result is great harm to the public’s right to work and to people’s way of life. The service trade agreement will be so destructive that even the KMT’s own legislative speaker has publicly said he cannot endorse it. That should reveal a little about the severity of its potential impact.

The Ministry of Economic Affairs directed the Taiwanese side of the deal, sending representatives to talks in China and setting the agenda behind the scenes.

To negotiate an agreement under which China would deregulate 80 service sub-sectors and Taiwan 64, and then be proud of it and think it is something to trumpet in Taiwan reveals much about the ministry’s attitude and goals.

Chen Xing (陳星), head of the Department of Taiwan, Hong Kong and Macau Affairs at the Chinese Ministry of Commerce, reportedly said it was “quite unexpected” that the agreement would generate such a backlash in Taiwan, since China was not very satisfied with the extent of Taiwan’s proposed deregulation. That was also why the Taiwanese delegation felt “wronged.”

However, Chen also said that if it had not been for Taiwanese misgivings, China would have deregulated “more than 80 sub-sectors.”

These statements may seem contradictory, but that misses the main point: What Beijing wanted to achieve was to take some of the heat off the KMT while at the same time distancing itself from it.

Why would the government’s delegation be let down by its counterpart after already having prostrated itself?

Vice Minister of Economic Affairs Francis Liang’s (梁國新) recent defense of the agreement reveals the quality of Taiwan’s key decisionmakers.

He said that McDonald’s has been investing in Taiwan for the past 29 years and currently operates 400 restaurants, but that he has yet to see a blond, blue-eyed person selling hamburgers.

This is such a irrelevant point that it can be easily refuted. Small wonder then, that Chen was quick to distance himself from Taiwanese officials.

The main reasons US investment in Taiwan has not led to an influx of US citizens are salary levels, geography and language.

According to data from the IMF and the Directorate-General of Budget, Accounting and Statistics, Taiwan’s average per capita GDP last year was US$20,364. The figure for the US was US$50,753 and US$43,653 for Japan.

If McDonald’s were to start employing staff from the US, it would help raise salary levels and increase the internationalization of its social environment, management techniques and technology. This would be welcomed by a majority of Taiwanese, so why is the inflow of US workers so low?

This lack of Western workers underlines why government measures aimed at expanding Taiwan’s international presence are insufficient and exposes the government’s ineptness and lack of responsibility.

The Ministry of Economic Affairs is the main actor in economic policy implementation, but because it is incapable of opening up the nation, it is instead isolating it and welcoming Chinese capital and white-collar workers.

Last year, the average annual per capita income in China was US$4,944, one-quarter of Taiwan’s and one-tenth of the US’. A look at the monthly salaries of 500,000 Chinese undergraduates in 2010, six months after graduation, shows that the top five cities were Shenzhen at 3,280 yuan (US$534), Guangzhou at 3,234 yuan, Zhuhai at 3,191 yuan, Shanghai at 3,064 yuan and Beijing at 2,818 yuan. Even if the past few years of salary increases are included, Taiwan still looks attractive.

Now, the service trade agreement is kicking the door to the regional service industry wide open, allowing any number of so-called Chinese white-collar workers with US$200,000 in the bank to bring three households — nine people — to Taiwan.

On one hand, Chinese salaries are lower, and on the other, there are almost no geographical, linguistic or cultural obstacles to Chinese firms entering Taiwan.

Even with no political overtones, such an influx would cause a massive downward pressure on Taiwanese salaries. Given the unequal scale of Chinese and Taiwanese enterprises, the local industrial chain would be easily eliminated.

This is why many in the industries pushed to the frontline of this new challenge by the Ma administration are so upset.

In addition, Beijing will not overlook political considerations and such a policy was unambiguously laid down at the CCP’s 18th National Congress.

It is not very difficult to imagine what will happen next.

If the KMT is successful in using the second extraordinary legislative session later this month to push through the ratification of the service trade deal, Taiwan will suffer a mortal blow to its economic sovereignty.

This is tantamount to surrendering to China. With no other choice, Taiwan is left staring down a dead-end road. Whether the nation suffers death by a thousand cuts or from a single blow is up to China.

This simple truth is clear to all Taiwanese, but not to Ma.

According to a Chinese saying: “The people will revolt when pushed too far by officials,” and revolt may now be all that Taiwanese have left.

Translated by Perry Svensson