Thu, May 08, 2008 page8

• Why labor is key in China policy

  • By Chen Ming-chi 陳明祺
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  When former Taiwan Solidarity Union legislator Lai Shin-yuan (賴幸媛) was appointed chairwoman of the Mainland Affairs Council, some said it was a wise choice: A person favoring Taiwanese independence could achieve consensus in Taiwan and improve the nation’s strategic position in talks with China.

  Those who opposed the nomination said that Lai’s earlier support for independence would mean that hopes of improving cross-strait relations would come to naught because the Taiwanese bureaucracy or Chinese interference would delay promises to open up the relationship.

  During Lai’s press conference, both sides focused on slogans that relate to sovereignty: the “Republic of China on Taiwan,” the so-called “1992 consensus” and “one China, different interpretations.”

  But influencing interaction between Taiwan and China and Taiwan’s sovereign status is not as straightforward as appointing a new person to head the council, as is easily seen from the reaction of China’s Taiwan Affairs Office.

  From a wider perspective, Taiwan’s international status and de facto sovereignty is both protected and restricted by the East Asian framework led by the US and China, and within which Japan plays a secondary role, leaving Taiwan little room to maneuver.

  Attention should also be placed on the domestic distribution of benefits resulting from economic and trade relations with China over the past 20 years. Who has profited from economic integration, and who has lost out?

  If the new government decides to make even more room for those who have profited, how is it then going to compensate and care for those who suffer from the changes?

  Ever since former president Chiang Ching-kuo (蔣經國) allowed family visits to China in 1987, cross-strait policy has been evaluated in terms of sovereignty politics on the one hand and investment, economy and trade on the other.

  Policy therefore either highlighted sovereignty, dignity and national security or emphasized economic efficiency and investment interests.

  Conflict over the development of economic and trade relations has always tried to find a balance between boosting the economy and furthering political goals, while never giving necessary attention to a third aspect — social welfare.

  As a result, the two governments have opposed one another, while Taiwanese businesspeople have fallen over one another to move their factories to China, thus expanding the economic connection.

  In this balancing act between politics and economics, politicians have won face by protecting Taiwan’s sovereignty, capitalists have profited from the flow of capital, Taiwanese workers have lost their jobs and Chinese workers have toiled hard in Taiwanese-run sweatshops day and night.

  Disadvantaged groups in Taiwan have not enjoyed protection because of declining national tax revenues, while the rights of Chinese spouses in Taiwan have been brushed aside because of national security considerations.

  This picture is, to a certain degree, confirmed by the recent industry, commerce and service census report published by the Directorate-General of Budget, Accounting and Statistics.

  The census shows that compared with five years ago, remuneration for labor in Taiwan has barely increased, unlike profits in industry and commerce. The cost of labor in comparison to the cost of other aspects of production has decreased, while the rewards for businesses have increased.

  This situation is the result of a number of factors, but the results of the census show that one-quarter of profits for the most profitable industry — manufacturing — came from triangular trade patterns in which orders were placed with Taiwanese companies and products were then manufactured in China.

  It’s easy to conclude from this that Taiwanese businesspeople who move their production facilities to China on a large scale are key to stagnant wages.

  The cross-strait policy advanced by the outgoing Democratic Progressive Party government has limited the flow of capital to China in various kinds of ways because of considerations of national security, but entrepreneurs have still been able to make a profit under this policy regime, while workers and disadvantaged groups have had to pay a price.

  This is not to say that blocking the flow of capital is the best policy in protecting the interests of disadvantaged groups and workers.

  On the contrary, faced with increasing economic globalization, the main issue after extending economic relations with China will be not just how to protect the rights of workers, but also how to have workers and disadvantaged groups share in newfound benefits.

  Opening to China prematurely without concern for social welfare sacrifices the livelihoods of workers. Such policies will could be resisted and even overturned by popular discontent.

  To make sure that workers and disadvantaged groups profit along with the rest of the country, additional measures must be implemented that strengthen social welfare through new tax measures and welfare initiatives.

  The three main concerns that Lai addressed at the press conference that she gave after being appointed MAC chairwoman were precisely those that the present cross-strait policy lacks. She touched upon new issues that need to be faced in future relations between Taiwan and China.

  We need to emphasize not only the welfare of the nation, but also the society that underpins it. Taiwan must discuss this issue with China.

  We need something more than an investment protection agreement, and that something is a basic framework for the social responsibilities of businesses.

  The reality that was lost in the noise of the protests from Taiwanese businesspeople and the pan-blue camp was that this middle road, which leans slightly to the left, is in the interests even of the businesspeople themselves — if they want policies of opening to China to develop.

  But it will be very difficult for Lai to achieve progress on this under the incoming Chinese Nationalist Party (KMT) government, which is accustomed to ignoring the interests of workers and disadvantaged groups.

  Chen Ming-chi is an assistant professor with the Institute of Sociology at National Tsing Hua University and a member of the executive committee of the university's Center for the Study of Contemporary China.

  TRANSLATED BY ANNA STIGGELBOUT
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