Forums discuss cross-strait relations

Strengthening economic ties with China will not solve Taiwan's economic issues -- what Taiwan needs is new economic development strategies, a top economist said yesterday.

Chen Poh-chih (陳博志), chairman of Taiwan Thinktank and economics professor at National Taiwan University, made the remarks during a speech at a forum on globalization, flow of capital, and employment held by the Taiwan Labor and Social Policy Research Association in Taipei yesterday.

"Many of our low-skilled laborers are unemployed because a lot of low-skilled jobs have been moved to developing countries like China," Chen said.

"Some politicians, however, are suggesting that to solve the economic problem we're facing now we should strengthen economic ties with China -- they've even proposed the idea of a cross-strait common market," Chen said.

"That just doesn't make any sense," he said.

Chen explained that an essential component of a common market is the free movement of labor.

"I could only see the situation worsening if [a common market] becomes a reality," he said.

He then said that the only advantage of increasing investment in China is to bring down the costs of production.

But that would mean more domestic unemployment and lowered wages, Chen said.

"Lowering the production cost may be good for businesses owners, but would be a disaster for workers," he said.

Sung Chee Tek (宋治德), a Hong Kong Confederation of Trade Unions official, agreed, saying that after Hong Kong signed a Closer Economic Partnership Arrangement -- similar to a free trade agreement between countries -- with China, there has been a trend of Hong Kong capital moving northward into China.

"When the big corporations make their money in China, Hong Kong laborers don't benefit from it," Sung said.

"When the business owners return to invest in real estate in Hong Kong and boost the real estate market, ordinary Hong Kong citizens suffer from the inflation of housing prices," he said.

Chen also said that the economic benefit for businesses is only temporary, because once other companies are doing the same thing, "they have to compete by cutting the sales prices, and thus the profit margin shrinks," Chen warned.

Hence, Chen suggested that Taiwan should seek an economic breakthrough by creating locally oriented specialty industries.

"A great majority of the 160,000 Singaporeans who visited Taiwan last year said in a survey that what they liked the most in Taiwan were tourist farms -- and that has potential," he said.

Chen also believed that Taiwan should stress cooperation with more developed countries.

"We have our economic achievement today because we worked closely with developed countries such as the US and Japan," Chen said. "We learned skills and technologies from them, and we acquired some of their jobs, too."

Meanwhile, the vice president of National Chengchi University, Lin Bih-jaw (林碧炤), yesterday told a separate forum that he expected that the current cross-strait stalemate would not be broken until the summer of 2009.

"We might need to wait for the completion of certain events -- Taiwan's 2008 presidential election, the Beijing 2008 Olympics and the new US government -- to see the development of a new cross-strait relationship," Lin said at a forum on the review of and prospects for the long-term effects of opening cross-strait exchange.