At present, Taiwan's China-bound investment accounts for 71.05 percent of its total foreign investment. This is five times more than the amount invested in the British Virgin Islands, which is the second-largest recipient at 14.9 percent, and 19 times more than that invested in the US, which at 3.7 percent ranks third among destinations for Taiwanese foreign investment. Clearly, Taiwan's outbound foreign investment is seriously tipped in China's favor.
Once China's economy begins to falter, Taiwanese businesspeople's lack of understanding of the need to hedge their investments means that they will find it difficult to cope. If Taiwanese companies in China begin to fall apart at the seams, Taiwan's economy will also go down the tubes.
Although Japanese investments in China have increased in recent years, China only received 12.96 percent of Japan's total foreign investment in 2004, making it the fourth-largest recipient. Japanese foreign investment is being equally spread over different regions of the world. Clearly, Japanese companies have hedged their positions well, and unless there is an economic crisis of global scale, Japan's economy will not suffer because of political, economic or social disturbances in a few regions.
Japanese businesspeople clearly have a better understanding of the need to hedge their investments than their Taiwanese counterparts and therefore avoid putting all their eggs in one basket.
Many believe that since China has the largest population in the world, it is also the world's biggest market. However, a big population does not necessarily amount to strong consumption power. China's population accounts for 20.25 percent of the world's population, but its GDP only accounts for 4.35 percent of the world's GDP. It trails far behind the 25-nation EU, whose collective population accounts for 7.08 percent of world's population while its GDP accounts for 30.14 percent of global GDP. China is thus not one of the largest markets in the world.
This data proves two things: a large population does not translate into a large market, and the biggest markets in the world are the EU, the US and Japan, not China.
If Taiwanese businesspeople do not realize this simple fact, they will not be able to invest wisely.
Many also believe that Taiwan only stands to benefit from the opening up of direct transport links with China. However, according to a report released by the Mainland Affairs Council in 2003, the normalization of cross-strait transportation links would lead to an increase of China-bound investment by NT$280 billion (US$9 billion). The report also said that the number of China-bound tourists would increase by 2 million people, who would spend NT$60 billion, for a total of NT$340 billion.
If direct transport links are established, Taiwan could save NT$13.3 billion on air freight and NT$800 million in freight transport, for a total of NT$14.1 billion. This means that if cross-strait links are established, Taiwan will lose NT$326 billion a year.
Furthermore, a survey entitled "Taiwanese Businessmen on China-bound Investment" issued by the Chinese National Federation of Industries last year said that if direct transportation links are normalized, only 27.4 percent of Taiwanese companies would be willing to increase their investments in Taiwan, while 52.3 percent said they would increase their investments in China.
It seems that rather than a panacea for Taiwan's economy, the normalization of direct cross-strait transportation would be a poison pill.
Su Lung-chi is an assistant to the Taiwan Solidarity Union legislative caucus.
Translated by Daniel Cheng
President Tsai Ing-wen (蔡英文) began her second term on Wednesday last week amid the COVID-19 pandemic, a major lesson from which nations worldwide are learning is the importance of a well-funded, robust and accessible health service. Taiwanese have good reason to be proud of their excellent National Health Insurance (NHI) system, but the system is itself in poor health. In December last year, the media reported that the total expenditure of the NHI had exceeded NT$700 billion (US$23.31 billion at the current exchange rate), with a deficit between NT$50 billion and NT$60 billion. At this rate, the system could go bankrupt next
In the digital era, wars waged beyond the limitations of regions and borders in the virtual Internet space by harnessing information technology have become an important issue. In the past few weeks, Taiwan has experienced cyberattacks against private and industrial organizations such as CPC Corp, Taiwan and Formosa Petrochemical Corp, as well as government agencies such as the Presidential Office. Meanwhile, information has been released related to Taiwan and the enemy, making it difficult to distinguish truth from misinformation. It could be clearly seen after the last attack and the use of various forms of disinformation and misinformation that national security has
The 2014 Sunflower movement marked a major milestone on Taiwan’s road to civil disobedience; it is the duty of conscientious citizens to protest unjust government actions by openly breaking the law to achieve a higher moral aim, while at the same time being willing to face the consequences. In a constitutional democracy, citizens are endowed with the inherent right of civil resistance, because the state is given sovereign power by the people based on the principle of popular sovereignty. Citizens are entitled to engage in civil disobedience if a democratic government chooses not to play by the constitutional rules. In 2014, then-president Ma
He was burly, with piercing blue eyes, and it was clear he was in charge when he entered the Galaxy, a wedding hall-turned-slave pen in the Iraqi city of Mosul. Dozens of Yazidi women and girls huddled on the floor, newly abducted by Islamic State (IS) group militants. He walked among them, beating them at the slightest sign of resistance. At one point, he dragged a girl out of the hall by her hair, clearly picking her for himself, a Yazidi woman — who was 14 when the incident occurred in 2014 — recounted to The Associated Press (AP). This was Hajji