An Inconvenient Truth

An Inconvenient Truth
China Times editorial
translated by Bevin Chu
June 6, 2007

The Taiwan region's economic performance since the Democratic Progressive Party came to power in 2000 can be explained in two ways. Official statistics suggest that GDP growth is not that bad, that though it may be inferior to the three other Asian Dragons, mainland China, and India, compared to Europe and America, it is nevertheless satisfactory. But private sector evaluations and government statistics are two different matters. Many university graduates' starting salaries have fallen, fear of unemployment has risen, and the quality of life is lower than before. The reasons for the obvious discrepancy between official figures and private sector perceptions are worth looking into.

In order to understand the difference between official figures and private sector perceptions, we need to ask the following four questions: (1) Where does Taiwan's economic growth come from? 2) Where do the fruits of this growth go? Who profits from them? (3) What consequences does such a pattern of economic development have? (4) What pitfalls threaten Taiwan's economic future? Yesterday this newspaper proposed a systematic explanation for the above four riddles. Today, we provide a comprehensive analysis of Taiwan's economic plight.

Directorate General for Budget, Accounting & Statistics figures reveal that during the 1990s, the average GDP growth rate was 6.5%, the bulk of which was in private sector consumer purchasing. After 2000 however, even though the average GDP growth rate was 3.8%, most of that was due to exports. Growth in private sector consumer spending was not worth mentioning. Since economic growth was concentrated in the export industry, those industries able to profit from economic growth are going to be export related. This is the answer to Question (1). As to who in fact profits, that relates to Question (2).

Taiwan's low tech manufacturing industries and traditional industries have already moved to locales such as mainland China and Vietnam. The only locally manufactured exports that are still competitive are a handful of high tech industry components. Take notebook PCs for example. The vast majority of assembly lines have left Taiwan. The only orders Taiwan industries receive are for ICs, DRAM and other modules still made on Taiwan. The notebook PC industry can turn a profit from export orders from a small number of businesses. The economic fruits of exports naturally flow to high tech industry employees and company bosses. Since computer assembly or internal low tech parts manufacturing are no longer domestic industries, affected workers face unemployment and reduced salaries. The income disparity between low tech employees and high-tech professionals or their bosses will naturally increase day by day. Because high tech talent tends to be financially well off, the average person perceives a growing gap between the rich and the poor. In short, the growth of high tech parts export inevitably results in income discrepancies between knowledge workers and manual labor, accelerating the polarization of society.

The inexorable polarization of Taiwan society is not limited to subjective public impressions. It manifests itself in the gross statistics as well. As everyone knows, domestic auto sales have not recovered for two years in a row. Sales are down 30% from the year before. But sales of luxury cars such as Mercedes, BMW, and Lexus grew 23% between January and April. Average purchasing power has fallen, while the purchasing power of wealthy individuals at the top of the economic ladder has risen. What is this if not polarization?

But purchases of luxury cars and mansions by a wealthy elite are not enough to support Taiwan's overall economy. When average private sector consumer buying power plummets, when annual growth is no higher than 1.5%, that is not enough to keep 7/10th of the population employed. As a result, private sector unemployment rises, university graduates' starting pay falls, people feel the difference in the quality of their lives, and those on society's margins commit suicide by lighting charcoal fires in their homes, and sleep the Big Sleep.

Apart from this internal polarization, what other pitfalls does Taiwan's lopsided economic development conceal? Scholars have pointed out that to concentrate a nation's economic growth in high tech manufacturing industry exports is like flying on a single engine. Once external conditions or the industry structure changes, one is faced with a flameout in one's sole engine. Take the soon to be established ASEAN plus Three free trade region for example. After 2010 the cost advantage of certain Taiwan high tech products may evaporate. By then, the contribution of export orders to Taiwan's GDP will be marginal, and our growth rate will fall yet again. If local industries can no longer survive under the government's Closed Door Policy, and decide to list on the Hong Kong stock market instead, even business profits will flee. By then, any changes in policy will be too little, too late.

This newspaper's analysis of Taiwan's economic plight explains the reasons for the discrepancy between the official figures and private sector perceptions, and clearly indicates the source of Taiwan's economic problems. We dare not expect much from the Democratic Progressive Party government in the year remaining, but at the very least the Presidential Office and the Executive Yuan ought to face an inconvenient truth. If the government attempts to sweep negative public sentiment under the rug at this late date by trotting out Directorate General for Budget, Accounting & Statistics figures, then it is truly beyond redemption.

Original Chinese below:

中時電子報
中國時報 　2007.06.06
經濟數據背後的實情：民進黨不願面對的真相
中時社論

自二○○○年民進黨執政之後，台灣經濟的表現就出現兩種不同的解讀。官方的統計數字似乎顯示，台灣國內生產毛額成長還是不差，雖然不如其他亞洲三小龍與中國、印度亮眼，但比起歐美諸國仍是差強人意。然而，民間的感覺卻與政府數據截然不同。許多大學畢業生不但起薪降低、失業憂慮增加，更覺得生活過得比以前差。官方與民間這樣明顯不對稱的感受，確實值得探究其中緣由。

要了解台灣官方統計與民間感受的差異，可以從以下四個問題著手：（一）台灣的經濟成長從何處來？（二）這些成長的果實往何處去、由哪些人獲利？（三）這樣的經濟發展模式有什麼後果？（四）台灣經濟前景有什麼隱憂？本報昨日所做的專題報導，對於前述四個謎團提出了系統性的解釋。在此，我們也要對台灣經濟的真實情況，做一番整理解析。

主計處數據顯示，在一九九○年代，台灣ＧＤＰ的平均經濟成長率為六．五％，而其中最大宗的來源是民間消費購買的成長，但到了二○○○年以後，雖然ＧＤＰ平均經濟成長率仍有三．八％，但最大宗的來源則是出口；民間消費的成長已經微不足道。既然經濟成長力道集中在出口產業，那麼能夠從經濟成長獲利的，當然就是與出口相關的行業。這是對前述問題（一）的答案。至於獲利的究竟是哪些人，就是問題（二）的內涵了。

台灣的低技術製造業與傳統產業早已外移至中國大陸與越南等地，故國內目前還有競爭力將產品出口的，只剩下若干高科技產業中的少數元件。以手提電腦為例，絕大多數的生產裝配線都已移出台灣，因此台灣業者接到一張訂單，只有ＩＣ、ＤＲＡＭ等組件可能由台灣製造。另外，手提電腦業者當然也能從出口訂單中抽取少數企業主利潤。因此，出口所帶動的經濟成果，自然就會流向高科技從業者與公司老闆。至於電腦組裝、或內部低技術元件的製造既然不在國內，其相關勞工當然就會感到失業與減薪的壓力。於是，低技術從業者與高技術者及大老闆之間的差距，自然就日漸擴大。由於高科技人才原本就屬高所得階級，這也是一般人民感到貧富日趨懸殊的緣由。簡言之，著重高科技元件出口的經濟成長，必然會形成技術階級勞動者差別待遇的後果，加速社會的兩極化。

台灣社會日趨兩極不只呈現於人民的個別感受，也在總體數字中表露無遺。如所周知，國內汽車銷售連續兩年不振，銷售率較前年相比下滑約三十％。但是雙Ｂ與凌志三個品牌最高等級的豪華轎車，一至四月份銷售卻能成長約二十三％，可見社會平均購買力下降，但頂尖財主的購買力卻大幅上升。這不是兩極化又是什麼？

但是少數頂尖人士所購買的名車豪宅，畢竟不足以撐起台灣的整體經濟。當民間平均消費力下滑，每年僅能以一．五％成長時，當然就不足以支撐高達七成就業人口的服務量。於是，民間的失業率必然增高、大學生起薪必然下降、人民的生活感受必然變差，更不用說社會邊緣人燒炭自殺或鋌而走險的悲劇了。

除了內部兩極化，台灣這樣偏頗的經濟發展模式究竟有什麼外部隱憂呢？學者指出，集中以高科技製造業出口的經濟成長模式，就像是將國家動力全部集中在單一引擎。一旦外在環境變動或是產業結構有所變化，則單一引擎就有熄火的危機。以即將成形的東協加三自由貿易區為例，在二○一○年之後，台灣若干高科技產品的些許成本優勢也可能受到大衝擊。屆時，一張出口訂單能夠為台灣貢獻的ＧＤＰ將更為單薄，我們的經濟成長率必將再降。此外，如果若干台灣本土產業因受不了政府的鎖國政策，也紛紛到香港上市，則連企業利潤也會拱手移出。到了那個時候，再要調整政策就已經為時晚矣。

綜合而言，本報日前對台灣經濟的情勢分析，不但解釋了官方數字與民間感受的不一，也清楚的指出台灣經濟問題的癥結。我們對於僅餘一年的民進黨政府不敢有太多的期望，但是最少最少，總統府與行政院總該坦然面對真相。到了這個時候還想以主計處的數字強壓人民的感受，那就太無可救藥了。