Address Exports Decline, Remedy Structural Causes

Address Exports Decline, Remedy Structural Causes
China Times editorial (Taipei, Taiwan, Republic of China)
A Translation
March 17, 2014

Summary: The economy on Taiwan has performed poorly in recent years. Last year exports of many of the one hundred most exported products declined. South Korea's Samsung by itself can integrate considerable research and development. We lack a Samsung, We must rely on the government to make an aggressive start.

Full text below:

The economy on Taiwan has performed poorly in recent years. Last year exports of many of the one hundred most exported products declined. These include machining centers, which declined 22%, and petrochemical industry raw materials such as terephthalic acid, which declined 74%. Others, such as light-emitting diodes (LEDs), chips, wafers, blank optical media, set-top boxes, and built-in or external Internet modems, declined 12% to 32%. LCD panels and parts declined approximately 6%. Most other basic industries, base metals and products, machinery, transportation equipment, and textiles declined. For example, bicycle exports declined nearly 5%.

Take imports. Import substitution industrialization is increasingly difficult. Japan has traditionally been a major exporter to Taiwan. In 2013 overall imports from Japan fell 9%. But some imports rose. Most were products we cannot currently produce ourselves, and are unlikely to produce in the future. They include automobiles and machinery and equipment for the manufacture of semiconductor integrated circuits. Meanwhile, imports from South Korea rose 4% last year. It has clearly replaced Japan in the manufacture of many other electronics products, optical equipment. integrated circuits, polarizers and polarizer panels, and processed glass panels. South Korea does not consider Taiwan its match. It is now gunning for Japan.

There are three structural causes for poor export performance. The first is Taiwan's unsuccessful economic integration. Other countries have kept pace. The current tension in the East China Sea will probably accelerate Free Trade Agreement negotiations between the Mainland and the Republic of Korea. It could be signed this year. South Korean and Taiwan exports overlap by 63%. They include petrochemical, rubber and rubber products, textiles and textile products, steel, machinery, semiconductor devices, flat panel display equipment, and integrated circuit components. The two have a highly competitive relationship. Current FTAs cover 6.4% of all exports from Taiwan. They cover 36.5% of all exports from South Korea. If South Korea and Mainland China sign an FTA, that percentage will become 62.6%. On Taiwan, the trade in services agreement remains blocked by the Legislative Yuan. That is the most serious crisis.

Seeking to sign the Trans-Pacific Partnership Agreement (TPP) and Regional Comprehensive Economic Partnership (RCEP) are steps in the right direction. But "distant waters cannot put out nearby fires." The biggest obstacle to Taiwan signing the TPP is political resistance to agricultural imports, including chicken, organ meats, and rice. Joining the RCEP is not easy. It requires support from Mainland China and the ASEAN countries. Only then can one even begin negotiations. Meanwhile, the trade in services agreements remains stalled. Such delays may be interpreted as passivity or even hostility toward international and regional integration. This will discourage other nations from supporting our bid to join the TPP and RCEP.

Secondly, the Intel and Microsoft based computer market has changed. Our domestic industry failed to change accordingly. Taiwan's manufacturing industry boom of the 1980s has slowed. The industry boomed once again during the 1990s. But the main reason was it became the world's supply center for personal computers. This was later extended to include other PC components, including monitors, power supplies, chassis, and peripherals. But this structure has undergone revolutionary changes over the past five years. Handheld devices have replaced the PC. They have gradually become the mainstream consumer electronics product. This has had a significant impact on the industry chain on Taiwan. Handheld devices are flourishing in many foundries on Taiwan. They have earned considerable profits, but nothing compared with the past. HTC is a domestic brand. It has had a difficult time competing with Apple and Samsung.

Finally, our industries have not done enough R&D. As a result we are being squeezed from front and rear. The "flying geese theory" states that if one fails to advance, backward countries will soon catch up. During the Ten Great Construction Projects era, Taiwan made huge investments in intermediate materials production. These replaced imports. The Mainland and ASEAN are now taking the same path. Taiwan has only one option. It must increase R&D. It must continue to move forward. Only then can it avoid being caught from both front and rear. It must breakout. But the situation is not optimistic.

As matters stand, the Ministry of Economic Affairs, the Ministry of Science and Technology, and the Ministry of Education, are the three ministries most closely related to research and development. They should cooperate to integrate research and development potential currently dispersed among various universities. These three ministries should identify which technologies will be the first to breakthrough. They should then work on them together. They should create an incentive mechanism. Researchers should be encouraged to engage in research and development that will directly benefit individual industries or an industry as a whole. Take applied sciences. Current journal articles in the West are heavy in reference data, such as educational evaluation modes. These do not meet the needs of industry. As a result, professors or researchers have become blind followers of Western studies. South Korea's Samsung by itself can integrate considerable research and development. We lack a Samsung, We must rely on the government to make an aggressive start.

解決結構性出口衰退之道
中國時報
2014年03月17日

台灣近年經濟表現不佳，去年全年出口前100大產品中，幾個重要的傳統主力出口品都大幅衰退，包含綜合加工機衰退22％，石化原料像對苯二甲酸衰退74％；其他像發光二極體（LED）晶粒及晶圓、空白光學媒體、具有通訊功能之機上盒、內建或外接網際網路之數據機，衰退12％到32％不等，而液晶面板及其零件各衰退約6％。其他基礎工業方面，基本金屬及其製品、機械、交通運輸設備、紡織品等亦多呈衰退，如腳踏車出口就衰退了近5％。

在進口方面，進口替代愈來愈難走下去。2013年自傳統入超大國日本進口總共減少9％，但單項自該國進口成長的，多為目前未能自行生產且未來也很難看到可以自行發展成功的產品，如汽車成車和製造半導體或積體電路之機器及器具等。另一方面，去年對南韓進口增加4％，其在電子產品、光學器材等項目中已經明顯出現大幅替代日本產品的態勢，包含積體電路、偏光片或偏光版、經過加工的玻璃面板等。韓國沒有把台灣當對手，它現在正在緊迫追趕日本。

出口表現不佳的結構性原因有三，首先是台灣加入經濟整合之路不順，其他國家卻未曾放慢腳步。值得注意的是，當前東海情勢緊張，恐將加快大陸與韓國間自由貿易協議（FTA）談判的進度，快則今年內即可簽署。韓國與台灣出口產品63％重疊，包括石化、橡塑膠製品、紡織原料及紡織品、鋼材、機具、半導體設備、平板顯示器設備、積體電路零組件等產品，雙方具有高度的競爭關係。目前台灣出口的FTA覆蓋率為6.4％，南韓已達36.5％。如果南韓和大陸簽訂FTA，將達62.6％。對於服貿協議還在立法院打轉的台灣而言，是最大危機。

尋求洽簽跨太平洋夥伴協議（TPP）與區域全面經濟夥伴關係（RCEP）方向正確，但遠水救不了近火。台灣簽署TPP最大的困難在於政治上很難大幅開放農產品進口，包含雞肉、內臟、稻米等。加入RCEP亦不容易，必須得到中國大陸和東協的諸國支持，才得以進行談判。但現在連服貿協議都還沒過，這樣的拖延恐被國際解釋為台灣對區域整合抱持消極、甚至敵視的負面訊號，對未來尋求各國支持加入RCEP或TPP至為不利。

其次，以英代爾和微軟架構為首的電腦市場已經改變，我國產業界還沒有做出相應的調整。1980年代台灣製造業的發展曾經趨緩，但90年代再度蓬勃發展，其主因是製造業開始成為世界個人電腦的供應重鎮，後來延伸到所有其他供應個人電腦的元件，包括監視器、電源、機殼、周邊設備等。但這樣的架構在過去5年間已經出現革命性的轉變，手持裝置取代了個人電腦，逐漸成為主流電子消費產品，讓台灣的產業鏈面臨重大衝擊。雖然手持裝置的勃興也為台灣許多代工廠賺進相當的利潤，但是完全無法和早期相比；經營本土品牌的HTC則近年受蘋果和三星兩面夾擊，極為艱辛。

最後，我國產業研發能量不夠，已出現被夾殺危機。在雁行理論下，如果不持續進步，隨時都會被後進國迎頭趕上。台灣當年在十大建設時代，大量投資中間原料的生產，以取代進口，現在大陸和東協正重複同樣的途徑。台灣唯有擴增研發能量，繼續快速前進，才能避免夾殺，衝出重圍，但目前情況並不樂觀。

當今之計，經濟部、科技部和教育部3個與研發高度相關的部會，應該趕快攜手合作，積極整合分散在各大學、研究單位的研發能量。這3個部會應先就我國有待突破的產業技術領域，做好認定，然後通力合作，訂出誘因機制，鼓勵研究人員從事台灣個別或全體業界可以直接受益的題目。對於應用科學而言，當前以西方期刊論文數、引用數據等為重的教育評鑑模式，並不符合產業的需求，結果是教授或研究人員各行其是，成為西方研究的盲目跟隨者。韓國單靠一家三星就可以整合韓國相當的研究能量，我們沒有三星，必須靠政府的積極作為始可以為功。