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Campaign Special ( Business Community ) - Lien Chan creates doubts

By Lisa Wang
STAFF REPORTER
Sunday, Mar 21, 2004, Page 24

Political uncertainty stemming from opposition leader Lien Chan's (連戰) statement yesterday that the election was unfair may negatively impact the nation's economy, pundits said.

"Political disorder could cause overseas investors to flee from local stock markets, which in turn could weaken the local currency and further damage Taiwan's economy," said William Lin (林蒼祥), a professor in Tamkang University's department of finance.

Lin's warning came after Lien demanded a ballot recount and called on the Central Election Commission to nullify the vote following his loss in the poll.

Political upheaval aside, economists said President Chen Shui-bian's (陳水扁) re-election will not derail the nation's economic growth.

Taiwan's unemployment fell to 4.53 percent, a 30-month low, in January from a high of 5.35 percent in August 2002.

During his campaign, Chen pledged to lift the nation's economic growth to above 5 percent this year, fueled by exports to China.

Demand from across the Taiwan Strait accounted for nearly a quarter of the nation's exports last year.

According to government statistics, China surpassed the US last year to become Taiwan's biggest trade partner, with trade volume surging to US$46.3 billion, up nearly 24 percent from 2002.

But Chen's re-election may dash most local enterprises' hope of a rapid improvement in trade ties with China, another economist said.

"I can't foresee any opportunity for Chen to make a breakthrough during his second term because of his party's political inclination," said Huo The-ming (霍德明), a professor of finance and banking at National Chengchi University.

Direct air and shipping links with China could clip NT$14.8 billion annually from business expenses while adding more than a percentage point to annual economic growth, according to government estimates.

Evergreen Group Chairman Chang Yung-fa (張榮發) said in a statement on Friday that the government's inability to establish peaceful and stable relations with China is harming the competitiveness of local businesses and industries.

Cross-strait talks have been stalled since Chen first won the presidency four years ago.

Beijing is likely to continue to look on Chen with suspicion.

"Anticipation of benefits from better bilateral trade ties are likely to fade," Huo said.

Chen said after winning the 2000 election that he would work to restore cross-strait transportation links -- a first step toward direct trade. But his efforts have largely fallen flat.

Lien made promises regarding the improvement of cross-strait transportation links before the election.

"The pace for lifting the ban could slow, but we will continue to push the government to formulate a timetable," said Deng Wen-chung (鄧文聰), an official from the Taiwan Businessmen's Association in Shanghai (上海台商協會). "The issue has become pressing."
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