Convene an Economic Affairs Conference -- Now!
China Times editorial (Taipei, Taiwan, Republic of China)
November 21, 2013
Summary: Taiwan's economy will have difficulty growing by 2%. Once shining high-tech industries such as AU Optronics and Acer are struggling to survive. Industry elder Morris Chang has butted heads with the Central Bank over exchange rates. The Cross-Strait Agreement on Trade in Services is highly favorable to domestic and foreign investment. But the DPP and TSU have obstructed its passage, and stalled it in the Legislative Yuan.
Full text below:
Taiwan's economy will have difficulty growing by 2%. Once shining high-tech industries such as AU Optronics and Acer are struggling to survive. Industry elder Morris Chang has butted heads with the Central Bank over exchange rates. The Cross-Strait Agreement on Trade in Services is highly favorable to domestic and foreign investment. But the DPP and TSU have obstructed its passage, and stalled it in the Legislative Yuan. The CEPD has proposed a Free Trade Zone Pilot Program. But other agencies refuse to accept it. Premier Chiang Yi-hua's decision has been given zero scrutiny.
Everyone knows the economy is in trouble. But the ruling and opposition parties, businesses, and even administration officials continue to go their own way. They work against each other. They cannot get any traction. Eventually businesses and the public will lose confidence in the future. The situation is already critical. We urge the Executive Yuan and Legislative Yuan to convene an Economic Affairs Conference as soon as possible. Further footdragging amidst the economic rise of the Mainland will reduce Taiwan to a lonely isle.
The STA and Free Trade Zone Pilot Program were part of President Ma's "Golden Decade" platform, advanced years ago during his re-election campaign. It is an important step that will bring the outside world to Taiwan. It can accelerate the flow of goods, people, and capital. It can pave the way for membership in the Trans-Pacific Partnership Agreement (TPP).
President Ma was re-elected. He placed Minister of Economic Affairs Yin Chi-ming in charge of Free Trade Zone Pilot Program planning. But Yin could not complete the project during his term. On February 18, current chairman Kuan Chung-min dropped a bombshell. He said the Free Trade Zone Pilot Program was too complex. He said it must be scaled down to accelerate implementation. Chairman Kuan said that new plans would be sent to the Executive Yuan within one to four months. Some portions do not require amending the law. These can be completed immediately. Other portions require amending the law. They can be developed in tandem with a draft law. But the Executive Yuan was tardy. It approved Stage One of the Free Trade Zone Pilot Program on August 8. It announced that 12 administrative regulations could not be updated before the end of September this year. It once again failed to meet the deadline.
In March of this year, Premier Chiang Yi-hua presided over a political affairs conference. He listened to CEPD reports on the Free Trade Zone Pilot Program. He instructed the various ministries and departments to develop concrete plans, and implement services on schedule. Free Trade Zone Pilot Program special regulations were submitted to the Executive Yuan for approval in mid-October. Deputy Premier Mao Chi-kuo and Political Affairs Committee Member Hsueh Chin reviewed them. But recently rumors emerged that the Science Council and the Minister of Finance vehemently opposed the tax provisions This forced Premier Chiang to reconsider. This shows that the CEPD groundwork, communications, the Deputy Premier and Political Affairs Committee Member review, and Premier Chiang's instructions were all lies. This shows that the ministries and departments are self-interested and uncommunicative, and make it impossible for policies to emerge from the Executive Yuan.
Does the Free Trade Zone Pilot Program include the financial industry? The policy changes from day to day. People are left clueless. When Chairman Kuan first took office, he intentionally included the financial sector. Later he said the financial sector was not limited by geography, therefore would not be included. He said capital flows would not be included in the Free Trade Zone Pilot Program. But in July he once again told the Executive Yuan he would incorporate the financial industry into the Free Trade Zone Pilot program. The goal was to make financial products more diversified. Promoting financial sector wealth management businesses would enable Taiwan to become more prosperous. It would attract the necessary talent and capital. His words are still ringing in our ears. Controversy has recently arisen over how to open up markets for financial products. It shows that the CEPD, the Financial Supervisory Commission, and the Central Bank have trouble communicating. The FSC advocates continued opening of NTD-denominated commodities. The CEPD advocates more substantial opening and the wooing of wealth management businesses. But the Central Bank agrees only to further open OBU and OSU businesses, and those that do not involve the NTD. Blue Camp legislator Ting Shou-chung says the denominated currency should not be NTDs. Nor should it be linked to the NTD interest rate or exchange rate. Otherwise "People might as well buy from foreign countries."
CEO Peng and Chairman of the FSC Tseng Min-chung say they have no problems communicating. They say the NTD was open to foreign financial businesses long ago. They say it is an entirely different matter than the Free Trade Zone Pilot Program. The two want to reassure legislators by dispelling rumors of non-cooperation. But this does nothing to solve the practical problems. This is evident in the controversy within the Executive Yuan over financial industry liberalization within the Free Trade Zone.
Taiwan's financial product designs, exchange rates, and interest rates, should not be all of one piece. Recently Morris Chang used unusually harsh language while criticizing exchange rates. CEO Peng used Tsai Ming-Kai, Liu Ching-piao and motor scooter users as a shield. Central Bank decisions on exchange rates would not be challenged. But outsiders would see the Central Bank as overly defensive.
History is written by the victors. They are the heroes. Under President Ma's two terms, Taiwan's economy has finally grown and yielded results. Is the financial sector as a proportion of GDP up or down? Is the rise of the Mainland marginalizing Taiwan's economy, or providing it with new opportunities? These should be all be tallied up. Who is responsible can also be determined. Continuing down our current path is unlikely to breath new life into a stifled economy. In 2016 President Ma will turn over power to someone else. What will follow is difficult to imagine.
Instead of weeping over the state of the nation, why not seize the initiative? Convene an Economic Affairs Conference. Allow different voices to express themselves. After rigorous examination, let the truth to emerge. Seek consensus, then combine our efforts.
中國時報 本報訊 2013年11月21日 04:09