The Democratic Progressive Party (DPP) may have lost both the legislative and presidential elections, but the path it chose for itself — localization — remains the right one. The problem lies in the fact that the value of localization has been narrowed down by politicians to mere political discourse, while its economic aspect has been largely ignored.
By putting politics before the economy while facing the globalization of Taiwan’s economy and the rise of China, DPP supporters were forced to choose between desinicization or exploiting China.
Localization will have greater meaning if it is not limited to political discourse. If we examine Taiwan’s economic problems pragmatically and objectively, we will see that the rise of China plays an important part.
But does this mean that without China’s rise, Taiwan’s economy would not have experienced any problems? Of course not. Some of Taiwan’s industries would still have relocated to Vietnam and other developing countries.
Economic development is dependent on the government’s power to transform the industrial structure. In other words, the future of Taiwan’s economy lies in our own hands and should not be decided by developing countries such as China or Vietnam.
After the DPP came to power, the biggest difference from the Chinese Nationalist Party (KMT) regime was the promotion of a knowledge-based economy focused on research and development and brand building at either end of the profit curve, also known as the “smile curve.”
This economic policy helped many emerging knowledge-based industries such as IC design and the service sector.
Traditional industries, however, were left behind. If we review the history of the nation’s manufacturing industry from the 1990s to the present in terms of density of technology staffing, we find that high-tech intensive industries have been constantly growing while low-tech industries have been in recession. In other words, the national economy has performed very well as a result of the successful transformation of medium and high-tech industries, but some employees in traditional industries have not enjoyed the fruits of economic growth.
Moreover, most of these people are often considered traditional DPP supporters. Therefore, while the DPP government helped GDP growth, it never managed to grasp why its supporters continued to argue that the economy was not faring well.
This is also why pan-green supporters complained that top DPP officials were increasingly out of touch with the public.
Globalization and the rise of China and other developing countries have played a part in the decline and relocation of domestic traditional industries. But these industries cannot solely rely on China or other foreign markets to improve their competitiveness.
The key still lies in whether the government can ensure the interests of the those who have lost out to globalization. One of the reasons why the DPP lost election after election is that it failed to bring up a comprehensive localization discourse on the economy.
If the pan-green camp attributes the KMT’s victories solely to a successful opening up of the economy to China — and as a result changes its attitude toward localization — it means that the pan-green camp’s understanding of localization remains too limited and fails to meet the demands from its supporters.
Lu Chun-wei is a doctoral student in the Department of Political Science at National Taiwan University.
Translated by Ted Yang
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