I would really rather not use the expression “golden decade,” because it has been sullied by former president Ma Ying-jeou (馬英九), who said that with the signing of the Economic Cooperation Framework Agreement with China, Taiwan would experience a golden decade, but reality proved that to be a matter of political trickery.
In the end, I still decided to use this expression here, because looking at the global economy today, Taiwan has a good chance of experiencing a golden decade in the next 20 years.
I believe that the global economic situation is becoming increasingly favorable to Taiwan.
First, with the establishment of the Asian Infrastructure Investment Bank, China bared its fangs and angered the world, setting off the US-China trade and tech disputes. One opinion poll showed that 90 percent of Americans perceived China as a threat to the US.
Second, in the war of words over the “Wuhan pneumonia,” Beijing’s unreasonable and irrational behavior has set off a wave of strong dislike of China.
Third, the spread of the pandemic has exposed the limitations of globalization and sparked an anti-globalization sentiment. The reorganization of the global supply chain will pick up speed once the pandemic is over, and this will emphasize Taiwan’s role within the global supply chain.
Fourth, the US presidential election in November. Regardless of who wins, the strong dislike of China means that the next president will increase pressure on Beijing, and that a second round of US-China trade talks will be intense.
The animosity between the US and China is beneficial to Taiwan, because it will deter Taiwanese from investing in China and detract from the Chinese beneficial policies aimed at Taiwan.
The problem is that Taiwan itself is not working hard enough.
Those with a pro-Beijing position that leans toward economic integration with China continue to make up the mainstream in academia and the media.
They are opposed to distancing Taiwanese from the Chinese economy and are doing all they can to persuade the government to improve cross-strait relations.
Furthermore, the huge Chinese market and the seductive dividends from the Chinese policies aimed at benefiting Taiwanese businesses continue to loom large.
There is also a lack of government officials who adhere to former president Lee Teng-hui’s (李登輝) “no haste, be patient policy.” The result is that Taiwanese investments in China surged 229 percent year-on-year in March, and overseas production rose 56 percent in April. These numbers are making a mockery of the government’s policy to attract China-based Taiwanese businesses back to Taiwan.
Time and tide wait for no one; the government must take action.
It should reduce Taiwanese investments in China; move to quickly set up a national high tech public health team modeled on the “national face mask production team”; put the NT$138 billion (US$4.6 billion) 5G spectrum license fees to good use in developing artificial intelligence and 5G infrastructure, and training 5G personnel; take the initiative to develop the space industry in cooperation with the US; work to quickly sign a free-trade agreement with the US and put an end to the dispute over Japanese food products from prefectures affected by the Fukushima Dai-ichi nuclear power plant disaster to be able to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership; relax regulations on foreign labor, and bring in top and mid-level workers to resolve the problem posed by negative population growth; pass preferential treatment legislation allowing foreign workers to obtain permanent residency and citizenship to make up for the lack of high-tech talent; and establish a tax to address the unfair trade balance enjoyed by massive markets in order to end the attraction to Taiwan of the huge Chinese market.
China is posing a direct challenge to the US, which now needs to work closely with Taiwan to restructure the global supply chain, while Taiwan continues to need the US market and technology.
Taiwan has never been so close to a golden decade as it is today, but this opportunity could disappear in the blink of an eye.
The prerequisite for success is for Taiwan to substantially distance itself from China. If the officials in charge of the economy continue to muddle along, led by the nose by China-based businesspeople trying to integrate Taiwan’s economy with China’s, there will be no golden decade.
Huang Tien-lin is a former advisory member of the National Security Council and a former president and chairman of First Commercial Bank.
Translated by Perry Svensson
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