Improving economic ties with Southeast Asian nations to reduce economic dependence on China and improve the social welfare system to deal with an aging population and a widening wealth gap are the most pressing tasks for the incoming Democratic Progressive Party (DPP) administration, experts and politicians said yesterday at a conference about challenges the incoming governments faces.
The meeting, titled “Conference on Priorities and Prospective Policies of the [president-elect] Tsai Ing-wen [蔡英文] Administration,” was held at National Tsing Hua University in Hsinchu ahead of the inauguration of the new government on Friday.
“Taiwan’s economic growth is slowing and the nation is facing a budget crisis. The fertility rate has been too low and many of the nation’s best talents often seek work abroad. Taiwan’s economy is highly dependent on China, whose economy is also slowing, and which is now ruled by [Chinese President] Xi Jinping [習近平], who has adopted styles and, in some cases, policies kindred to those of [former Chinese leader] Mao Zedong [毛澤東],” former American Institute in Taiwan director William Stanton said.
Stanton, director of the university’s Center for Asia Policy, said China has sent warning signs to the incoming government and it has adopted a more belligerent attitude toward its neighbors, while its domestic crackdowns are reminiscent of its Cultural Revolution.
With China stepping up its so-called “red supply chain,” Taiwan needs to diversify its markets and reach out to Southeast Asia, Europe, the US and Japan, and sign trade agreements with those nations, Stanton said.
“If China bullies small nations into not allowing Taiwan to enter the Trans-Pacific Partnership [TPP] trade block, Taiwan should, nevertheless, go through all the steps it needs to join the TPP, because in the long run — should Taiwan fail to join the TPP — it would be prepared to establish bilateral free-trade agreements with the US and other nations individually,” Stanton said.
However, many outgoing Chinese Nationalist Party (KMT) officials have seemingly been taking steps to make the situation as difficult as possible for the new government, he said.
Taichung Mayor Lin Chia-lung (林佳龍) said a stagnant economy, aging population and China factors are the most urgent issues for the new administration to deal with.
“The public gave the DPP a mandate to address issues of a stagnant economy and wealth inequality, while continuing to interact with China in a way that does not sacrifice Taiwan’s sovereignty and democracy,” Lin said.
“There will be no honeymoon period for the new government, as it has had a four-month takeover period since wining the January’s elections and the public wants it to act immediately and effectively,” Lin said.
The nation’s exports have declined for 15 consecutive months, which is longer than the slump following the 2008-2009 global financial crisis, and Taiwan is in desperate need of instigating a successful industry transition and regional economic integration amid increased competition from China’s “red supply chain,” but that is difficult when China keeps thwarting Taiwan’s initiatives, Lin said.
The Tsai administration is to focus on its new southbound policy to build ties with Southeast Asian nations to avoid putting all its eggs in a China basket, he said.
“The new administration should not follow President Ma Ying-jeou’s (馬英九) administration in treating trade liberalization as a cure-all, because competitiveness is unlikely to be boosted through liberalization alone,” he added.
“Ma relied on opening the market to China to revitalize the economy when his administration failed to restrain rising housing prices and rebalance social inequality. However, the Cross-Straits Economic Cooperation Framework Agreement did little to improve Taiwan’s economy or help the nation sign trade pacts with other nations,” Lin said.
Taiwan has to become a leading manufacturing nation in the region by transitioning from an efficiency-driven economy to an innovation-driven one and focusing on developing biomedicine, “renewable” energy, information technology, “smart” machinery and defense industries, Lin said.
It should also invest much more in social welfare system, such as education, female employment and long-term care services, Lin said.
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