Two developments are making it clear that the Ma Ying-jeou (馬英九) administration and the technocrats who fill its ranks must not only shift gear on the economy, but shift into high gear before it’s too late.
First is the adoption earlier this week of maximum residue levels for the leanness-enhancement drug ractopamine by the Codex Alimentarius Commission, which is likely to result in a decision by the Democratic Progressive Party (DPP) to end its ongoing legislative boycott of a vote on the import of US beef products containing the agent.
The US side, which has made resolving the dispute over ractopamine a sine qua non for the resumption of long-stalled Trade and Investment Framework Agreement (TIFA) negotiations, is now hoping that the Ma administration will be able to pass the bill allowing the imports. Once this is out of the way, there would be no reason why TIFA talks could not resume, US officials have told this newspaper in private.
The other development is the continued deterioration of the nation’s economic indicators, epitomized by a revised GDP growth forecast for this year by Citibank, which trimmed its prediction to 2.8 percent, from 3.3 percent in May, saying the figure could be revised downwards again should the situation fail to improve. This is a pretty bad drop from the prediction of 4.51 percent GDP growth made a year ago and the gloomy economic prospects make the state of the economy during the Chen Shui-bian (陳水扁) era --— often the point of comparison for the Ma government — look healthy in contrast.
It is clear, therefore, that more drastic and imaginative economic policies will be needed to revive the economy.
However, accelerating the pace of economic liberalization with China, Ma’s turnkey approach to improving the economy, just won’t do. What is needed is for Taiwan to quickly realize that some of its economic policies are in dire need of modernization and that failure to address the problem will leave Taiwan well behind its regional competitors.
One important first step would be to quickly deal with the TIFA, which anyway is a relatively unambitious plan, and immediately aim for the real goal, which is the signing of a free-trade agreement (FTA) between the two economies.
If, as Ma argued, signing the Economic Cooperation Framework Agreement (ECFA) with China opened the door to future FTAs with other regional economies, one can only imagine how signing an FTA with the US would embolden other countries, including major economies, to follow suit.
Beyond those first steps, Taiwan must really start making the adjustments that will make it possible for it to become a member of the Trans-Pacific Partnership (TPP), which many analysts regard as the future model for regional, if not global, economic cooperation (for the time being, China has not been invited to join the yet-to-be-formed framework, mostly because it constantly violates the rules it had agreed to play by upon joining the WTO).
Ma’s recent comments on the possibility of Taiwan joining the TPP are disheartening and a sign that his administration has yet to fully appreciate the importance of the changes that need to be made. A little while ago, Ma said Taiwan would not be ready to do so for another decade; he has since revised that prediction to eight years. This is way too long and highlights a lack of willingness that Taiwan simply cannot afford. US officials, many of whom would be supportive of Taiwan’s entry into the TPP, are confident that Taipei could make the needed adjustments well before then. Some members of the US Congress have even gone on record calling for Washington’s support on the issue.
There could not be a better time for Ma, a president who made a revived economy a cornerstone of his administration, to take bold steps in that direction. The support is there — and the clock is ticking.
I have heard people equate the government’s stance on resisting forced unification with China or the conditional reinstatement of the military court system with the rise of the Nazis before World War II. The comparison is absurd. There is no meaningful parallel between the government and Nazi Germany, nor does such a mindset exist within the general public in Taiwan. It is important to remember that the German public bore some responsibility for the horrors of the Holocaust. Post-World War II Germany’s transitional justice efforts were rooted in a national reckoning and introspection. Many Jews were sent to concentration camps not
Deflation in China is persisting, raising growing concerns domestically and internationally. Beijing’s stimulus policies introduced in September last year have largely been short-lived in financial markets and negligible in the real economy. Recent data showing disproportionately low bank loan growth relative to the expansion of the money supply suggest the limited effectiveness of the measures. Many have urged the government to take more decisive action, particularly through fiscal expansion, to avoid a deep deflationary spiral akin to Japan’s experience in the early 1990s. While Beijing’s policy choices remain uncertain, questions abound about the possible endgame for the Chinese economy if no decisive
China poses a dire threat to Taiwan’s semiconductor industry as it steps up efforts to poach Taiwan’s top chip talent, following the US’ implementation of stringent chip restrictions. Beijing is keen to develop its own semiconductor technologies, leveraging skilled engineers from Taiwan, Europe and other countries to circumvent US restrictions on providing China access to advanced US chips, particularly those used in artificial intelligence applications, as well as other chip technologies and manufacturing equipment. Taiwan has always contended with talent competition from China, but the situation is worsening. The Hsinchu District Prosecutors’ Office on Friday said that China’s ARK Semi and
Actress Michelle Yeoh (楊紫瓊) on March 13 posted an Instagram caption after the opening of Tiffany’s Taipei flagship store two days earlier that read: “Thank you Tiffany for inviting us to Taipei China.” We know that Yeoh knows Taipei is in Taiwan, not China, because the caption was posted following comments she made — in English — in which she said: “Thank you to Tiffany for bringing me to Taipei, because I do love this country very much.” Her remarks and the subsequent Instagram caption were reported in Taiwan, in Chinese and English- language media such as Radio Free Asia, and overseas,
RSS