Economic pilot zones are simply not feasible

By Huang Tien-lin 黃天麟  / 

Sun, Nov 09, 2014 - Page 8

Food safety scandals have dealt a heavy blow to the food industry, but they have also taught the public a practical lesson: The government’s free economic pilot zones are not feasible.

However, the government wants the legislature to quickly pass an act on the oversight of cross-strait agreements as well as the proposed special free economic pilot zones act so that former vice president Vincent Siew (蕭萬長) would have a gift to take to the APEC summit in Beijing.

Are the free economic pilot zones really feasible? Would a government that cannot control even the most basic of oil products be able to control and manage a simplified customs procedure and processing outside these zones for thousands of agricultural products without creating economic security problems that are even more serious than the current food safety problems?

Ting Hsin International Group (頂新國際集團) and Wei Chuan Foods Corp (味全食品工業) are privately owned Taiwanese companies and the nation has a system of strict customs checks in place. Despite this, there are irregularities everywhere, and Chinese companies operating in the free economic pilot zones, supported by the Beijing government, would bring anarchy and industrial chaos to Taiwan.

First, the “shop in front, factory in back” design allows companies operating in the zones to carry out most of their processing and production outside the zones so that imported products can circulate through the whole nation. After processing, 10 percent or less can be sold domestically, which complicates the follow up and auditing activities. Judging from the number and quality of current government officials, all talk about strict controls and management is nonsense. As the government insists on introducing the free economic pilot zones, despite them not being feasible, one can but wonder what the government’s goal is.

Article 42 in the proposed act allows the processing of the 830 products that are still under import ban both in and outside the free economic pilot zones. As long as the processing of imported Chinese agricultural products are allowed in the zones, it can be expected that cheap Chinese agricultural products would enter the domestic market. Any talk about all imported Chinese agricultural products having to be re-exported is also nonsense, and there would be a lot of “bogus” exports and fake declarations.

The vision of forging the nation into “The Island of Free Markets” is not only preposterous, it is dangerous. The level of economic freedom in Taiwan surpassed that of Japan and South Korea a long time ago, it only maintains some regulations vis-a-vis China — a nation that wants to annex Taiwan. President Ma Ying-jeou’s (馬英九) administration insists that Taiwan shall be forged into a free-market paradise, placing no restrictions at all on China, with the goal of turning the Taiwan of tomorrow into the Hong Kong of today, politically speaking, and into an appendix to China, economically speaking.

Ma must stop dreaming about making the nation a “center” for this, that or the other. Unless Taiwan becomes a Chinese province or a link in China’s “economic unification war,” Beijing objects even to free trade agreements between Taiwan and Malaysia and Australia. Would they really let Taiwan become an offshore center for the Chinese yuan?

The nation must open its eyes and take a closer look at the free economic pilot zones. The overconfidence in these zones which has reached grotesque proportions is a cover for unspeakable ulterior motives.

Huang Tien-lin is former president and chairman of First Commercial Bank, and a former Presidential Office adviser.

Translated by Perry Svensson