President Ma Ying-jeou’s (馬英九) administration justifies its obstinate pursuit of an economic cooperation framework agreement (ECFA) with China by saying the Chinese market will be a gateway for Taiwanese manufacturers to global markets. One is reminded of Naomi Klein’s writings about how “disaster capitalism” has established itself through global free trade.
It is ironic that China’s economy has grown to its current size on the back of disaster capitalism, particularly since the Tiananmen Square Massacre in 1989.
Although the Tiananmen crackdown was widely condemned by the western world, Chinese leader Deng Xiaoping (鄧小平) used the state of shock in its aftermath to deepen the process of economic liberalization and open the door to foreign investment. With its favorable tariffs and cheap labor, China became the sweatshop of the world and a favorite target for Western investors.
Once its economic clout reached a certain level, China began plundering resources around the world in the name of trade liberalization. In Africa, China has taken advantage of political instability and poverty and fostered dictatorships to promote its interests — all in the name of “economic aid.”
Taiwan has been hit hard by the global financial crisis and our leaders will stick to their China-friendly policies come what may. In so doing, they have fallen into China’s disaster capitalism trap.
Since the advent of Chinese tourist groups, the tourism industry has been making more money. Yet the government failed to take into account the Chinese tourism sector’s integrated operations, in which one operator handles everything, from transport to food and accommodation. The turnover of any one Chinese travel agency is bigger than that of many Taiwanese agencies put together.
Taiwanese travel agencies gain limited benefits from Chinese tourists.
Moreover, China has tight control on the number of tourists coming over, which it can use as a bargaining chip.
Chinese investment is moving into the domestic tourism sector. For example, the online booking service ezTravel (易遊網) has seen the majority of its ownership bought by its biggest Chinese counterpart, Ctrip (攜程).
Chinese-owned firms could some day have a monopoly on Chinese tourists visiting Taiwan.
Although the proposed Taiwan-China memorandum of understanding (MOU) on financial supervision will advance the establishment of a cross-strait currency clearance mechanism and promote liberalization and transparency of financial transactions, the sheer size of China’s banks is overwhelming compared with Taiwan’s handful of financial holdings companies.
If financial markets are deregulated without supplementary measures, even the domestic life and property insurance sectors may be bought out. For example, Taiwan’s Nan Shan Life (南山人壽) could fall into the hands of China’s Primus Financial Holdings (博智).
If this happens, China will have a grip on all of the nation’s financial lifelines.
Meanwhile, makers of display panels and semiconductor wafers, which the government has promoted as key industries, have been moving facilities to China. This is likely to lead not just to capital outflows and higher unemployment, but to the transfer of core technologies. In the end, Taiwan’s high-tech industries will be undermined.
If an ECFA is signed, the result will follow the trend of the powerful gaining more power and the rich-poor gap widening. The end result of free trade is, Klein says, an even greater disaster for the public.
Wang Shih-wei is secretary-general of the Asia-Pacific Elite Interchange Association.
TRANSLATED BY JULIAN CLEGG
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