Finding a balance between environmental protection and economic growth is always tough for most industrialized countries and even for developing countries.
In Taiwan, the issue is prominent, especially with economic growth entering a steady phase and industries being forced to shift toward making value-added products to survive.
New challenges are rising for local companies, which intend to move their overseas production lines, primarily from China, back to Taiwan, to cope with rising labor costs and a growing need to enhance products. Wages in China are expected to rise to the same level as in Taiwan over the next two or three years.
Taiwan can help solve the problems, given its high-quality workforce and stronger research and development capabilities. However, the issue at stake is whether those new production lines will be strong enough to boost the country’s job market and GDP while minimizing damage to the environment.
This complexity stands in the way of local manufacturers investing at home. Over the past three years, Taiwanese companies with overseas operations invested NT$15.95 billion (US$532 million) in Taiwan, which is just 12 percent of the total of NT$131.35 billion in investment based on letters of intent signed between local businesses and the Ministry of Economic Affairs.
Poor communication and inadequate government policies could ruin the opportunity to translate investment opportunities into real domestic investment, exports or job creation to reignite the nation’s growth momentum.
In April, about 100 villagers in Greater Tainan thwarted agrochemical company Rotam CropSciences’ attempt to build a new plant surrounded by rice fields, citing serious environmental contamination. The ground-breaking ceremony was interrupted amid conflict between protesters and company security guards. No progress has been made since.
Rotam said it plans to invest NT$2.5 billion in the plant to develop new agrochemical products, rather than to launch mass production, downplaying the potential impact of polluting substances.
Villagers did not believe what the company said and insisted the construction work should not begin until it passed environmental review. The fears are triggered by rumors that Rotam was kicked out of China because of severe environmental polluting problems, which Rotam said were groundless.
Rotam received green business certification from the Chinese government, the company said.
Rotam asked the Taiwanese government to step in to defuse the disputes and bridge the differences, but no significant moves were taken.
Rotam said the investment would create 800 new jobs and NT$10 billion in revenue for the supply chain in the Greater Tainan area. The company said it would not rule out diverting the investment to other business-friendly countries such as India or Southeastern Asian nations.
Early this month, LCD panel maker Innolux Corp, which counts Amazon.com and Google among its clients, said it is considering relocating up to 30 percent of its production lines in China back to Taiwan to better utilize high-quality local workers to produce high-value displays for mobile devices, or for cars and even jet fighters.
The new production lines will be a green production line, as robot arms and an automation system will play a significant part in the manufacturing process, company chairman Tuan Hsing-chien (段行建) said.
Innolux’s plan sounds feasible on first examination, but it will face public scrutiny when it starts executing the plan. Waste treatment, land acquisition and hiring will be the focal points. All those factors cannot be solved by Innolux alone or any company with similar expansion plans. The government needs to assist and to regulate companies based on a clear industrial policy that will ensure both economic growth and environmental protection.
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