Mon, Jul 21, 2014 page8

• Let’s not march into China’s jaws

  • By Norman Yin 殷乃平
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  Newspapers have reported that former premier Hau Pei-tsun (郝柏村), during a recent appearance on China Central Television in China, sang March of the Volunteers (義勇軍進行曲).

  It is perfectly understandable that a man his age could lose himself in a nostalgic reverie, and this song is, after all, a patriotic song about China’s resistance against Japanese aggression during the Second Sino-Japanese War.

  Despite changes to the words, Hau was surely well aware before he launched into the song that it was the national anthem of the People’s Republic of China (PRC) and, as a former Republic of China (ROC) national defense minister and premier, it is difficult to shake off the feeling that Hau singing it was inappropriate.

  The fact is, retired generals singing military songs during a Whampoa Academy alumni reunion held in Beijing, especially when senior Taiwanese military officers have been found to have passed on military intelligence to the Chinese communists in the past, does raise concerns that if cross-strait relations continue along this current trajectory, they will have repercussions for which country our armed forces identify with, making our military conflicted about who, what or why they are fighting. It could also affect US arms sales to Taiwan, as the US might be worried that information about advanced weaponry may be leaked to China.

  At the very least, we can already see that Taiwan’s importance to the US is fading, looking at recent US deployments within the Asia-Pacific region.

  According to analysis by a US think tank, Taiwan’s economy is becoming increasingly absorbed into China’s. Even in the absence of actual figures, it is possible to see from the number of factories being set up in China, the supply chain between upstream and downstream manufacturing and projected estimates of sales to the China market, that the situation is serious. The level of Taiwan’s economic reliance on the China market has been calculated at more than 65 percent.

  With this deeper cross-strait economic convergence, we are also witnessing the emergence of a substantial imbalance in the development of various economic sectors in Taiwan.

  The relocation of Taiwanese plants and factories to China has fatally hollowed out our domestic industrial base, leading to high unemployment and stagnation of salaries for mid and low-income earners.

  Corporate overseas earnings are reflected in stock prices, boosting stockholder incomes, and Taiwanese businesspeople are repatriating their earnings, driving up property prices here. As a result, wealth disparity just keeps on growing: The rich get richer, the poor just do not.

  In addition to this, the value of industrial production output has fallen as a percentage of GDP, compared with an increase of more than 70 percent for the service sector.

  According to Tourism Bureau statistics, the tourism sector, which has benefited the most from the improvement in cross-strait relations, has performed particularly well, with more than 2.87 million Chinese tourists coming to Taiwan last year, spending an estimated US$5.6 billion between them. Last year, there were more than 2,000 new hotels registered, a figure that does not include the number of new bed-and-breakfasts. Compared with the industrial sector, the whole gamut of service sectors, from transport to accommodation, through catering to souvenirs to scenic tours, have all flourished, driving new jobs, skills training and supporting services.

  Also notable is the flight of skilled professionals from our financial sector, with its tight profit margins, over to China, following deregulation of the Chinese yuan. These people, flocking to the other side of the Taiwan Strait in pursuit of massive increases in earning potential, have been the second-greatest beneficiaries of improved cross-strait relations.

  Of course, Taiwanese farmers have benefited, too, with China’s concessionary policy of purchasing surplus Taiwanese agricultural goods alleviating the problems farmers here found themselves in, with crop surpluses threatening to drive down prices.

  However, not everyone has been a winner. The Taiwanese industrial sector has not fared quite so well from improved cross-strait relations. Pickings have been relatively thin on the ground, and one man’s gain has been another’s loss, one man’s joy another’s woe. This has inevitably resulted in uneven development, accounting, to a large degree, for the public’s reaction to the cross-strait service trade agreement.

  However, these are not the only worries that cross-strait economic integration has brought Taiwan. Once our economic autonomy dissipates, political autonomy will quickly go the same way.

  One online commentator in China wrote, during the time of the student occupation of the Legislative Yuan: “China’s cross-strait policy is like watching a frog in boiling water, seeing how long it takes before you can no longer leap to safety.”

  Taiwan after the student protest movement is a different place, and China can probably be expected to make certain adjustments to its Taiwan policy following the visit by China’s Taiwan Affairs Office Minister Zhang Zhijun (張志軍), who witnessed what the situation was like on the ground.

  That said, Taiwan is still going to have to find a way, while cross-strait relations continue to move forward, to keep China at a safe distance, so that the nation does not end up like a well-done frog simmering at the bottom of a pan of hot water.

  This is something that the governing and opposition parties are going to have to start thinking about.

  Norman Yin is a professor of financial studies at National Chengchi University.

  Translated by Paul Cooper
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