The media are increasingly expressing worries about the growing poverty gap in Taiwan. They bemoan the fact that some people are enjoying the fruits of the economic recovery, while others have gained nothing. In contrast to the extravagant lifestyles of the wealthy elite, the poor cannot even afford a nutritious meal for lunch, they say.
Media commentators say one of the main reasons for the growing wealth gap is that triangular trade, in which orders are taken in Taiwan for goods made abroad (mostly in China), does not improve Taiwan’s employment situation or stimulate domestic demand. As companies move their production bases to China, there are fewer and fewer job opportunities for workers in Taiwan. As a result, the poor keep getting poorer, while only a few factory owners and traders reap the profits.
As long ago as 2000, skeptical commentators, such as myself, warned repeatedly that the trend toward taking orders in Taiwan for goods made in China was likely to have damaging economic and social results for Taiwan. However, China-friendly academics and media outlets took a different view, the foremost purveyor being the Chinese-language Commercial Times.
In 2002, the “order from Taiwan, made in China” business model had developed to the extent that 19.28 percent of all production by Taiwanese companies was carried out abroad. The Commercial Times said there was no need to panic, as this was a sign of industrial internationalization and was a good thing. The paper assured its readers that, while some low-added-value processing had moved to China, core management operations would still be carried out in Taiwan.
“Isn’t this exactly the result we wanted?” the paper asked.
Politicians who were convinced by such arguments came up with fantastic schemes like turning Taiwan into a “global logistics hub,” and they proposed offering tax incentives to operations centers. This, of course, amounted to encouraging companies to move their production bases to China.
Since that time, this business model has become even more widespread. Now overseas production accounts for more than 50 percent of the total output of Taiwanese manufacturers, compared with just 13 percent in 2000. Over the same period, real wages have fallen back to the level they were 13 years ago and more than 260,000 people now live below the poverty line.
Now that the harm has been done, the belated show of concern by the Commercial Times is not much help. Let’s hope that from now on they will discard their greater-China ideology and instead focus on Taiwan and its more than 20 million inhabitants.
Ten years ago the paper’s contributors portrayed the order from Taiwan, made in China business model as a wonderful thing. In reality, we have all tasted the bitter fruit of this policy —— climbing unemployment, shrinking pay packets and a floundering economy.
A decade later, history seems to be repeating itself; Taiwan signed the Economic Cooperation Framework Agreement (ECFA) with China in June.
Given the great difference in size between Taiwan’s economy and that of China, this kind of economic integration will obviously make Taiwan into just a Chinese island. Still, those who supported the order from Taiwan, made in China business model now support the ECFA and insist that the pact heralds “a golden decade for Taiwan.”
Will the ECFA really usher in a golden decade for this country? We need only look at what became of those earlier promises to see what the future has in store.
Huang Tien-lin is a former national policy adviser to the president.
TRANSLATED BY JULIAN CLEGG
In the past month, two important developments are poised to equip Taiwan with expanded capabilities to play foreign policy offense in an age where Taiwan’s diplomatic space is seriously constricted by a hegemonic Beijing. Taiwan Foreign Minister Lin Chia-lung (林佳龍) led a delegation of Taiwan and US companies to the Philippines to promote trilateral economic cooperation between the three countries. Additionally, in the past two weeks, Taiwan has placed chip export controls on South Africa in an escalating standoff over the placing of its diplomatic mission in Pretoria, causing the South Africans to pause and ask for consultations to resolve
An altercation involving a 73-year-old woman and a younger person broke out on a Taipei MRT train last week, with videos of the incident going viral online, sparking wide discussions about the controversial priority seats and social norms. In the video, the elderly woman, surnamed Tseng (曾), approached a passenger in a priority seat and demanded that she get up, and after she refused, she swung her bag, hitting her on the knees and calves several times. In return, the commuter asked a nearby passenger to hold her bag, stood up and kicked Tseng, causing her to fall backward and
In South Korea, the medical cosmetic industry is fiercely competitive and prices are low, attracting beauty enthusiasts from Taiwan. However, basic medical risks are often overlooked. While sharing a meal with friends recently, I heard one mention that his daughter would be going to South Korea for a cosmetic skincare procedure. I felt a twinge of unease at the time, but seeing as it was just a casual conversation among friends, I simply reminded him to prioritize safety. I never thought that, not long after, I would actually encounter a patient in my clinic with a similar situation. She had
A recent trio of opinion articles in this newspaper reflects the growing anxiety surrounding Washington’s reported request for Taiwan to shift up to 50 percent of its semiconductor production abroad — a process likely to take 10 years, even under the most serious and coordinated effort. Simon H. Tang (湯先鈍) issued a sharp warning (“US trade threatens silicon shield,” Oct. 4, page 8), calling the move a threat to Taiwan’s “silicon shield,” which he argues deters aggression by making Taiwan indispensable. On the same day, Hsiao Hsi-huei (蕭錫惠) (“Responding to US semiconductor policy shift,” Oct. 4, page 8) focused on
RSS