Ideological Inflexibility Means Economic Suffocation
China Times editorial (Taipei, Taiwan, Republic of China)
December 20, 2013
Summary: Taiwan's economy has long been suffocated. It must not become the victim of DPP ideology. The business community and the general public are interested in Taiwan's future. They must speak up. The political deadlock must be broken.
Full text below:
The trade in services agreement has been stalled in the legislature for six months. The Blue and Green camps have resumed fighting. The KMT hopes to reach an agreement before the legislature adjourns in January. It hopes to pave the way for other cross-Strait economic and trade agreements. But the trade in services agreement has gradually become an ideological war. The Blue Camp wants to convene an emergency session and pass it. Chaos may be inevitable. Sure enough, in the end the KMT legislative caucus withdrew. Everything has now returned to square one.
President Ma Ying-jeou has repeatedly said he wants the Legislative Yuan to pass the trade in services agreement, as soon as possible. But the legislature is about to adjourn. The KMT legislative caucus intended to hold an internal affairs committee review this week. But the Green Camp got wind of this and voiced strong objections. DPP Policy Committee Chief Joseph Wu warned the KMT not to misjudge the situation, and not to underestimate DPP determination. He accused Ma Ying-jeou of being too eager to pass the trade in services agreement. He accused the KMT legislative caucus of destroying the results of interparty consultation. He demanded to know what the urgency was.
Consider the Blue and Green camp approaches to dialogue and rhetoric. The two camps have are fundamentally different goals and motivations. Expecting the ruling and opposition parties to reach a compromise on the trade in services agreement is a pipe dream.
The Blue Camp is in a hurry to pass the trade in services agreement, primarily for economic motives. It hopes to introduce Mainland capital into Taiwan and to help Taiwan's service sector break into the Mainland market. Taiwan's service sector investment environment is deteriorating year by year. For years no major investments have been made. Introducing large inflows of Mainland capital will not be easy. Introducing capital from Mainland based SMEs to Taiwan can be another source of Mainland capital.
The Green Camp does not care about this. As they see it, large inflows of Mainland capital will eat away at local Taiwan service industries. The market will gradually be turned over to Mainland capital. That is why Joseph Wu stresses the need to "safeguard Taiwan's industrial and labor employment rights." The DPP insists that its concern is the middle and lower classes. The DPP also claims that the cross-Strait trade in services agreement is an unequal agreement. It compares it to the "unequal treaties" and alleges that Taiwan simply cannot withstand the invasion of Mainland capital.
Behind all these economic rationales of course, lie politically motivated partisan and election interests. The Blue and Green camps each have their own spin on the matter. They show no sign of willingness to compromise. The trade in services agreement has become an ideological dispute. The battlefield may gradually expand from the legislature to the streets. The two sides have less and less room for compromise.
Consider a more rational point of view. Grassroots level service industries on Taiwan probably cannot be persuaded that the trade in services agreement will not harm them, and that their impact will be limited. Mainland businesses have the opportunity to invest anywhere in the world. Taiwan's investment environment is not necessarily their best option. Moreover, Taiwan's investment environment is deteriorating. In the end, how much attraction will it actually have for Mainland capital? People probably have a pretty good idea.
Late last year the Mainland's CCTV network broadcast the "Wenzhou Family" TV series. Li Li-chun from Taiwan was cast in the lead. The series depicted the father of a family who goes to northern Shaanxi to drill for oil. The son goes to Heilongjiang to sell eyeglasses. The daughter goes to Italy to open a garment factory. This may be a fiction, but it underscores the Mainland's rapid economic growth. It highlights the many opportunities to make one's fortune. A single family does not put all its economic eggs in one basket. Over the past 30 years, the Mainland has maintained an annual growth rate of approximately 10%. This year it is undergoing economic transition. Justin Yifu Lin is a former vice president of the World Bank. Lin estimates that the Mainland will continue to grow rapidly for at least 20 more years. The Mainland is growing rapidly. Taiwan's protected grassroots level service industries are non-competitive. It would be better to open the sector up to both Mainland capital and Mainland personnel. Doing so would enhance Taiwan's economic competitiveness.
A little more market opening and a little less protectionism. would make Taiwan an investment haven. An Academia Sinica report clearly pointed this out. Taiwan's problem is that it has too much private capital and no place to invest it. Funds go into real estate speculation or into the bank as savings. This is why Taiwan's investment environment now trails the other Asian Tigers.
The DPP is using protectionism to thwart Mainland investment in Taiwan. It is denying Taiwan's service industries the opportunity to expand into the Mainland market. Does this really help Taiwan? Or does it hinder it? The DPP has many economic experts. They should to be able to conduct a rational analysis. The DPP must not allow ideology to determine cross-Strait economic policy. That is not what responsible political parties do.
Taiwan's economy has long been suffocated. It must not become the victim of DPP ideology. The business community and the general public are interested in Taiwan's future. They must speak up. The political deadlock must be broken.
社論－解開服貿協議死結 系列一 意識型態打結 台灣經濟更悶