Recently the issue of people plagued by huge credit card debt has become more serious. In extreme cases, people who can no longer repay their debts have resorted to robbing banks, as seen in a recent incident when a 23-year-old debt-ridden man was arrested following an attempted armed robbery.
In retrospect, most banks have thrived thanks to their credit card services. Some of the private-run banks have fared better than state-run banks as a result of the 20 percent revolving interest rates they charge on credit cards.
To promote their services, private banks are spending an average of NT$800 million (US$24.1 million) each year to scramble for the NT$170 billion revenue generated by credit card interest.
Over the years, the local banks' charging of higher interest rates on credit cards has indeed brought them huge profits, but this has also left tens of thousands of people deep in debt, creating a new challenge for the government.
We can conclude that the emergence of these "credit card slaves" indicates an industry will not necessarily protect the public interest while it pursues its own.
More than a decade ago, the media applauded the efforts of local banks when they encouraged people to apply for credit cards, saying it would stimulate domestic consumption and ultimately boost the nation's economic development.
At that time, whoever dared to criticize this thinking or ask the government to set up regulations governing credit cards was regarded as a troublemaker.
Since the government had no intention of adopting an active approach in dealing with the issue of credit card debt, more and more people have thus had problems dealing with their credit problems.
There are a lot of similarities between the issues resulting from the use of credit cards and the relocation of Taiwanese enterprises to China.
Over the past 10 years, many enterprises have jumped on the "China fever" bandwagon, while China has also provided various economic incentives to lure Taiwanese businessmen into investing there.
The nation's pro-China media outlets and academics have also been advocating the "go west" principle, insisting that this state of affairs creates a win-win situation for both sides of the Taiwan Strait.
Although some have occasionally warned the government of looming danger, these critics have been ridiculed for confining themselves and excluding themselves from the outside world. The government maintained a policy of indirectly encouraging China investment by giving the industry a free hand. This is the root of many economic problems that the nation is now facing.
A decade ago, the number of credit cards in circulation broke through the 30 million barrier. This glorious achievement also resulted in more than 100,000 "card slaves," which created problems for both banks and the authorities.
At the same time, the "boldly march westward" and "active deregulation" policies resulted in total Taiwanese investments in China hitting US$280 billion, with more than 1 million Taiwanese relocating to China. Although successful Taiwanese businesspeople are enormously wealthy, failed businesses moved their money to China, leaving their debt back home.
As a result, banks sacrificed their surpluses to balance bad loans, thus transferring the cost to society.
As a result of shrinking tax income, the economy and construction shrank and unemployment rates remained high while salaries stagnated.
A few days ago, Democratic Progressive Party (DPP) legislators and the opposition reached an agreement to amend the Banking Law (
This move was fiercely opposed by banks and the Financial Supervisory Commission (FSC).
But legislators should be admired for speaking up and fighting for what is right.
It also reminded the general public and banks that although the trend is towards liberalization, the financial and economic sectors still require order and management (in fact, the FSC's restriction on establishing new financial holding companies and banks also violates the liberalization principle.)
The credit card problem and the problem with companies moving to China have different effects on the government.
In the case of credit card services, both beneficiaries and victims are in Taiwan.
Although it creates problems in the lives of hundreds of thousands of "card slaves," it is possible to resolve the issue through wealth redistribution measures such as interest exemptions.
As for Taiwanese businesses going west, without effective management the losses and suffering created by the economic slowdown, falling real salaries and increasing unemployment rates will have to be borne by all 23 million Taiwanese. This is because those who benefit are sitting on the other side of the Taiwan Strait.
More seriously, if the nation's industry continues to move to China and the government continues to relax regulations, it will not be long before Taiwan becomes an economic satellite of China.
Politically, Taiwan could lose its liberal democracy after being swallowed up by totalitarian China. When that happens, the card slave problem will be a minor issue, and those suffering the real tragedy will be 23 million Taiwanese slaves.
Huang Tien-lin is a national policy adviser to the president.
Translated by Daniel Cheng and Perry Svensson
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