Because China does not sufficiently trust the DPP, it is a matter of course that Chen Shui-bian (
Ultimately, cross-strait trade issues should be considered mainly in light of their own merits. It is not appropriate to completely sacrifice economic considerations for the sake of politics. In the past, many people saw Taiwan's ban on cross-strait trade exchanges as a method to prevent China from gaining control over Taiwan's economy. Or they saw it as a deterrent against China's political and military threats. If these were true, forgoing these restrictions will not only demonstrate political goodwill but also benefit Taiwan's economy. In fact, the current restrictions on cross-strait trade are mainly based on economic considerations. It is simply not true that abandoning the current restriction will benefit Taiwan both economically and politically. Even if we are to review these policies in light of political considerations, we should also try to fully understand their impact on the economy, weigh the economic losses they incur, and establish a reasonable alternative policy. Only then can we avoid creating an even bigger economic loss.
Things will only worsen if we lift restrictions on Taiwanese investment in China. The shortage of capital and human resources, combined with the lack of complementary industries, will put domestic investment and production activities in a bigger dilemma. In recent years, Taiwanese investments in China has also reached about 2 percent of Taiwan's GDP. Therefore, an inordinate increase in Taiwanese investment in China will cause a capital shortage for domestic investments in Taiwan.
This kind of overall economic consideration is different from the stance of business people, which is based on private interests. Hence the need for these regulations in the past. Now we cannot ignore these overall considerations in favor of demonstrating political good will toward China or the demands of business people.
Chen Po-chih is a professor of economics at National Taiwan University.
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