With the Ma Ying-jeou (馬英九) administration aggressively deregulating cross-strait policies, Taiwan must heed the potential negative impact of overreliance on the Chinese market, analysts said yesterday.
The IMF first forecast China’s GDP growth at 11 percent for this year, but has cut it to 8.5 percent. Last month, IMF Managing Director Dominique Strauss-Kahn said the figure could fall to 5 percent.
As 80 percent to 90 percent of Taiwan’s foreign investment goes to China, many are worried that China’s slowing growth, falling exports and rising unemployment could hit the nation hard.
National Taipei University economics professor Wang To-far (王塗發) said a negative impact was inevitable because of the country’s overreliance on China’s economy.
“China’s situation is similar to that of a Buddha made of mud trying to cross a river — meaning it has enough problems saving itself,” he said. “Without 8 percent growth, China cannot create enough jobs. When unemployment becomes a problem, social unrest will follow.”
The Ma administration did not seem to realize the severity of the problem, Wang said, but believed cross-strait deregulation could salvage the domestic economy.
Taiwan’s economy is export-based, Wang said. During the 1960s and 1970s, the US bought 40 percent to 50 percent of the country’s exports, he said, but this dwindled after 2000. Now the US buys 20 percent of Taiwan’s exports, while China buys 40 percent to 50 percent.
As China’s GDP growth has slowed, exports to China have dropped by 50 percent, Wang said.
“In the early days, when our economy depended on the US, many worried we should not put all our eggs in one basket, because when the US sneezed, we would catch a bad cold,” he said. “Now, the situation has reversed and is even worse.”
Wang said economic and political uncertainty were bigger problems in China than in the US.
Economics cannot be separated from politics, Wang said, adding that most of China’s economic policies were part of political maneuvers to ultimately incorporate Taiwan into China.
Because of pressure from China, other countries have balked at signing free trade agreements and other economic accords with Taiwan, Wang said.
Although it was too early to tell when China’s economic power would catch up with that of the US and Japan, overreliance on China posed a great risk to the nation both economically and politically, Wang said.
“It is like exposing your neck and allowing somebody to wring it,” he said. “China’s strategy is clear. They let Taiwanese merchants pressure their government to push Beijing’s political agenda.”
National Taiwan University economics professor Kenneth Lin (林向愷) agreed that economy and politics go hand in hand.
“A precondition for a sovereign state is economic independence,” he said. “When a country has little or even no economic freedom, political problems will follow. It is like when a person is financially dependent, that person does not have the right of free choice.”
Lin said the Ma administration attached too much importance to what globalization, and China in particular, would give the domestic economy.
“China represents many opportunities, but the country’s overreliance on China is turning such an opportunity into a crisis,” Lin said.
A responsible government must consider the potential advantages and disadvantages of any policy, Lin said, but the Ma administration seems to be ignoring the risks posed by overreliance on China.
Part of the government’s strategy to beat the economic slowdown is to increase domestic consumption and public spending, in part by issuing consumer vouchers.
But Lin doubted the effectiveness of these policies. The country’s borrowing money to revitalize its economy only showed it lacked competitiveness and the capacity to act effectively in an economic crisis.
Professor Tung Chen-yuan (童振源) of the Graduate Institute of Development Studies at National Chengchi University said China’s slowing growth and the global economic downturn had eclipsed the benefits of cross-strait liberalization.
While China’s economic clout grows, Tung said he expected Washington and Tokyo to pay more attention to Beijing’s opinions on various issues. However, he did not think the US and Japan would abandon Taiwan because they have strategic interests here.
As long as Taiwan has a clear strategic objective, Tung said the government did not necessarily need to set political preconditions for cross-strait economic exchanges.
For example, Tung said, Washington hoped to see China’s economic liberalization lead to social and political reform.
In addition, the former Chinese Nationalist Party (KMT) administration set three political preconditions for opening up cross-strait transportation links, Tung said, but these did not work as bargaining chips.
A group of Taiwanese-American and Tibetan-American students at Harvard University on Saturday disrupted Chinese Ambassador to the US Xie Feng’s (謝鋒) speech at the school, accusing him of being responsible for numerous human rights violations. Four students — two Taiwanese Americans and two from Tibet — held up banners inside a conference hall where Xie was delivering a speech at the opening ceremony of the Harvard Kennedy School China Conference 2024. In a video clip provided by the Coalition of Students Resisting the CCP (Chinese Communist Party), Taiwanese-American Cosette Wu (吳亭樺) and Tibetan-American Tsering Yangchen are seen holding banners that together read:
UNAWARE: Many people sit for long hours every day and eat unhealthy foods, putting them at greater risk of developing one of the ‘three highs,’ an expert said More than 30 percent of adults aged 40 or older who underwent a government-funded health exam were unaware they had at least one of the “three highs” — high blood pressure, high blood lipids or high blood sugar, the Health Promotion Administration (HPA) said yesterday. Among adults aged 40 or older who said they did not have any of the “three highs” before taking the health exam, more than 30 percent were found to have at least one of them, Adult Preventive Health Examination Service data from 2022 showed. People with long-term medical conditions such as hypertension or diabetes usually do not
POLICE INVESTIGATING: A man said he quit his job as a nurse at Taipei Tzu Chi Hospital as he had been ‘disgusted’ by the behavior of his colleagues A man yesterday morning wrote online that he had witnessed nurses taking photographs and touching anesthetized patients inappropriately in Taipei Tzu Chi Hospital’s operating theaters. The man surnamed Huang (黃) wrote on the Professional Technology Temple bulletin board that during his six-month stint as a nurse at the hospital, he had seen nurses taking pictures of patients, including of their private parts, after they were anesthetized. Some nurses had also touched patients inappropriately and children were among those photographed, he said. Huang said this “disgusted” him “so much” that “he felt the need to reveal these unethical acts in the operating theater
Heat advisories were in effect for nine administrative regions yesterday afternoon as warm southwesterly winds pushed temperatures above 38°C in parts of southern Taiwan, the Central Weather Administration (CWA) said. As of 3:30pm yesterday, Tainan’s Yujing District (玉井) had recorded the day’s highest temperature of 39.7°C, though the measurement will not be included in Taiwan’s official heat records since Yujing is an automatic rather than manually operated weather station, the CWA said. Highs recorded in other areas were 38.7°C in Kaohsiung’s Neimen District (內門), 38.2°C in Chiayi City and 38.1°C in Pingtung’s Sandimen Township (三地門), CWA data showed. The spell of scorching