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 (
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of
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