As the global economy grinds ever slower, will China turn out to be Asia's economic savior? Or will it be a burden that drags the rest of the region down? This might be a life or death question for Taiwan.
Japanese management guru Kenichi Ohmae believes cheap labor has turned China into the world's biggest factory -- like post-World War II Japan, the US in the early 20th Century, or Britain following the Industrial Revolution. Ohmae also believes this trend will intensify after China joins the WTO.
But Huang Tien-lin (
With WTO entry, both Taiwan and China will be facing substantial adjustments. Taiwan's privatization of state-owned enterprises has been difficult, but there has been steady progress. In contrast, appallingly inefficient state-owned enterprises still hog almost every industrial sector in China and remain a major stumbling block to economic transformation. In Taiwan, unemployment has risen to more than 5 percent but social security mechanisms remain relatively healthy. In China, unemployment has created serious social problems, including the massive "blind flow" of migrant workers. After China's WTO entry, the country's agriculture sector will churn out more crowds of unemployed. Meanwhile, the economic gap between the coastal and inland provinces will continue to widen.
Non-performing loans are a serious problem at Taiwan's banks, but the government is taking a hands-on approach to financial reforms. In contrast, illegal or shady loans obtained through political connections are still widespread in China's banks on top of those banks' politically directed lending to unprofitable state enterprises from which this money can never be recovered. Inefficient local banks are also ill-equip-ped to compete with foreign banks. Meanwhile, China's stock market bubbles appear close to bursting. A financial crisis in China may well become the eye of the next regional financial disaster.
Taiwan's economy is posting negative growth this year, while China maintains 5 percent growth. This has led many to adopt a rather negative outlook on Taiwan and rush to China for investment opportunities. This situation is likely to change after both sides enter the WTO. Taiwan is making solid preparations for an industrial transformation, while much of the basic readjustment work is still non-existent in China.
The Economist has suggested that other Asian countries should not intervene in trade with China out of fear of the China threat. Instead, it suggested, they should utilize the China market, effectively re-allocate resources and lift economic restrictions. This recipe may work well for other countries, but as Richard Koo (辜朝明), chief economist at Japan's Nomura Research Institute, noted recently, Taiwan and China are still in a state of enmity. Before Beijing renounces the use of force against Taiwan and shows some genuine respect for human rights, Taiwanese investors should not invest too much in China, he said. They should instead develop a global strategy and disperse their business risk. The Economist may have suggested an aspirin to ease the economic pains, but Koo's recipe is tailored for Taiwan's problems.
That even Taiwan's "god of management" Formosa Group founder Wang Yung-ching (
China has successfully held its Forum on China-Africa Cooperation, with 53 of 55 countries from the African Union (AU) participating. The two countries that did not participate were Eswatini and the Sahrawi Arab Democratic Republic, which have no diplomatic relations with China. Twenty-four leaders were reported to have participated. Despite African countries complaining about summit fatigue, with recent summits held with Russia, Italy, South Korea, the US and Indonesia, as well as Japan next month, they still turned up in large numbers in Beijing. China’s ability to attract most of the African leaders to a summit demonstrates that it is still being
Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) on Thursday was handcuffed and escorted by police to the Taipei Detention Center, after the Taipei District Court ordered that he be detained and held incommunicado for suspected corruption during his tenure as Taipei mayor. The ruling reversed an earlier decision by the same court on Monday last week that ordered Ko’s release without bail. That decision was appealed by prosecutors on Wednesday, leading the High Court to conclude that Ko had been “actively involved” in the alleged corruption and it ordered the district court to hold a second detention hearing. Video clips
The Russian city of Vladivostok lies approximately 45km from the Sino-Russian border on the Sea of Japan. The area was not always Russian territory: It was once the site of a Chinese settlement. The settlement would later be known as Yongmingcheng (永明城), the “city of eternal light,” during the Yuan Dynasty. That light was extinguished in 1858 when a large area of land was ceded by the Qing Dynasty to the Russian Empire with the signing of the Treaty of Aigun. The People’s Republic of China founded by the Chinese Communist Party (CCP) has never ruled Taiwan. Taiwan was governed by the
The Japanese-language Nikkei Shimbun on Friday published a full-page story calling for Japan’s Liberal Democratic Party’s (LDP) leadership hopefuls to be aware of and to prepare for a potential crisis in the Taiwan Strait. The candidates of the LDP leadership race must have a “vision” in case of a Chinese invasion in Taiwan, the article said, adding that whether the prospective president of the LDP and the future prime minister of Japan have the ability to lead the public and private sectors under this circumstance would be examined in the coming election. The “2027 Theory” of a Taiwan contingency is becoming increasingly
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