Must Taiwan be a Loser in Global Competition?

Must Taiwan be a Loser in Global Competition?
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
July 30, 2014

Summary: The National Affairs Conference on Trade and Economics adjourned yesterday. The opposition DPP refused to participate. Controversial bills and government policy were left off the agenda. As a result the public paid little attention and the conference was relegated to the status of a giant debate. The conference reached nearly one hundred points of agreement, as well as a majority opinion. They all concerned basic principles, but will be hard to implement. Extensive discussions led to a feeling of urgency about Taiwan's economic difficulties. How can we maintain and increase our momentum? How can we find a winning strategy for Taiwan's economy? These are the Ma administration's biggest challenges.

Full Text Below:

The National Affairs Conference on Trade and Economics adjourned yesterday. The opposition DPP refused to participate. Controversial bills and government policy were left off the agenda. As a result the public paid little attention and the conference was relegated to the status of a giant debate. The conference reached nearly one hundred points of agreement, as well as a majority opinion. They all concerned basic principles, but will be hard to implement. Extensive discussions led to a feeling of urgency about Taiwan's economic difficulties. How can we maintain and increase our momentum? How can we find a winning strategy for Taiwan's economy? These are the Ma administration's biggest challenges.

The National Affairs Conference on Trade and Economics discussed two new issues. Taiwan's economic development strategy under globalization, and Taiwan's accession to regional economic integration and cross-Strait economic and trade policy. Put more bluntly, the question is how can Taiwan avoid becoming a loser in the new global economic foot race? How can it snatch victory from the jaws of defeat?

Following the financial tsunami, many nations committed to large-scale structural reforms. They enhanced their industrial competitiveness. This led to a significant restructuring of the global supply chain. Many nations chose to form alliances. This led to regional economic integration. These two trends intensified competition in the global economy. They resulted in swift and brutal changes in the world economic map. During the first wave of competition, the United States, the European Union, Japan, Mainland China, ASEAN, South Korea, and Singapore emerged as winners. They at least won more than they lost. Taiwan's position in the global supply chain however, was severely undermined. Taiwan has been increasingly marginalized by regional economic integration. Obviously it ranks among the losers.

Taiwan faces an increasingly grim situation. To win it must promote structural reforms. Long term domestic underinvestment and a brain drain are lethal for an economy. Insufficient diversification of industrial structure, excessive concentration of resources in ICT-related industries, and economic growth too dependent on a "Taiwan orders, overseas production" OEM export model, have deepened our economic vulnerability. They have led to a shortage of employment opportunities, income stagnation, unequal distribution of income, and sundry other problems. Therefore Taiwan must strive to create a favorable environment for investment, innovation, and entrepreneurship. We must promote industrial investment, job creation, boost wages, and halt the brain drain. We must change the pattern of industrial development, from an model driven by efficiency, to a model driven by innovation. The public supports these efforts. The key is how to implement them.

The biggest obstacle now is inertia and lack of determination. Take the recent improvement in our economy and the stock market boom. The main reason is the upcoming Apple iPhone 6 release and the rise of Mainland branded smart phones and tablet PCs. This has led to a significant increase in Taiwan OEM orders. This has stimulated exports and economic growth, and stimulated the Taiwan stock market. Following the 2010 financial tsunami, ICT industry exports rebounded sharply. This contributed to that year's 10,76% economic growth rate. But lo and behold, the result was lax efforts at structural reform, and even greater dependence on the OEM exports business model. Mainland brands are rapidly coming into their own. Taiwan accounts for an increasingly high percentage of its OEM production. Once once the Mainland acquires its own manufacturing capacity, it will be "Adios, Taiwan." Taiwan cannot turn defeat into victory through shortcuts. The government and private sector must eliminate inertia. We must change our growth model in order to become true winners.

A strong response to regional economic integration is another key to Taiwan's comeback. ROC-ROK FTA negotiations will be completed by the end of the year. The Trans-Pacific Partnership Agreement (TPP) and Regional Comprehensive Economic Partnership Agreement (RCEP) should be ready by the end of next year. South Korea is Taiwan's biggest competitor in the Mainland market. Taiwan's main trading partners are all TPP, RCEP participating members. That is why President Ma Ying-jeou is concerned. This is a matter of life and death. This is why he has repeatedly called on the legislature to accelerate the Cross-Strait Agreement Oversight Bill, STA, and sign the MTA as soon as possible.

This of course is the chief bone of contention between the ruling and opposition parties. Will globalization boil down to Sinicization? Will Taiwan's cross-Strait trade do more good than harm or more harm than good? In the final analysis, the answer to the globalization vs. Sinicization question will depend on whether Taiwan can join the TPP and RCEP after signing the STA and MTA with the Mainland. If the answer is uncertain, if we cannot join in the short term, we must have a ready response. Only then can we avoid defeat at the hands of our competitors, and avoid "Sinicization." Will cross-Strait trade do more good than harm or more harm than good? The answer depends on the aforementioned structural reforms and the effective management of cross-Strait risks. If the public unites behind reforms, there will be no insurmountable difficulties.

Therefore, when confronting sensitive cross-Strait policy issues, neither the Ma administration's dogmatic policy advocacy nor the DPP's obstinate "oppose everything" policy are acceptable. Only pragmatic problem-solving can resolve concerns and break through the current political impasse.

全球新賽局下，台灣如何擺脫輸家命運
【聯合報╱社論】
2014.07.30 02:22 am

經貿國是會議日昨閉幕。這次會議因為沒有在野黨參加，具爭議性法案及政府具體施政又未納入討論，因而欠缺社會關注，淪為大型研討會。會中所提出近百項共同意見及多數意見，都為原則性建議，不易有效落實。惟透過廣泛討論，多少燃起各界對解決當前台灣經濟困境的急迫感，如何延續並擴大這股動能，為台灣經濟尋求贏的策略，是馬政府最大考驗。

細究經貿國是會議所探討的「全球化趨勢下台灣經濟發展策略」及「台灣加入區域經貿整合與兩岸經貿策略」兩大議題，換成更直白的問法，即是：面對全球經濟新賽局，台灣要如何做才能反敗為勝？

在金融海嘯後，各國無不致力大規模結構性改革，提升產業競爭力，導致全球供應鏈大幅調整；另一方面，各國紛紛採取對外結盟策略，形成區域經濟整合潮流。在這兩大趨勢激盪下，全球經濟進入到競爭更為殘酷激烈的新賽局，世界經濟版圖變動極為快速。在第一波賽局中，美國、歐盟、日本、中國大陸、東協、南韓、新加坡等可列為贏家或贏多輸少，但台灣在全球供應鏈地位大幅削弱，且在區域經濟整合中日益邊緣化，很明顯已落到輸家行列。

面對日益嚴峻的情勢，台灣要反敗為勝，首須大力推動結構性改革。國內長期投資不足，高級人力外流，是經濟最大致命傷；產業結構不夠多元化，資源過度集中在資通訊相關產業，經濟成長又過於依賴「台灣接單，海外生產」的代工出口模式，更加深經濟脆弱性，也造成就業機會不足、薪資停滯、所得分配不均等複雜問題。因此，台灣必須致力營造良好的投資及創業創新環境，全方位促進產業投資，創造工作機會，引導薪資上漲，留住人才，同時須致力改變產業發展模式，從「效率驅動」轉向「創新驅動」的模式。這些努力方向，社會上已有很高共識，重點是在如何落實推動。

目前，最大阻力就是惰性與決心不足。如最近我國經濟好轉及股市榮景，主因是美國蘋果公司iPhone 6即將面市及大陸智慧手機及平板電腦品牌崛起，大量增加台商代工訂單，進而帶動出口及經濟成長，並激勵台股勁揚。回顧二○一○年金融海嘯後，資通訊業出口大幅反彈，促成當年高達十．七六％的經濟成長率；結果，反而因此鬆懈了結構性改革的努力，對代工出口經營模式依賴愈深。現在大陸品牌快速崛起，台灣為其代工比例愈來愈高，等到大陸製造能力進一步提升，「台灣，再見」恐將成為夢魘。所以，台灣要反敗為勝沒有捷徑，唯有政府和民間擺脫惰性，下定決心改變發展模式，才能成為真正的贏家。

強有力地因應區域經濟整合趨勢，是台灣反敗為勝的另一關鍵。中韓ＦＴＡ將於今年底前完成協商，「跨太平洋夥伴協定」（ＴＰＰ）及「區域全面經濟夥伴協定」（ＲＣＥＰ）預計明年底前將達陣；南韓是台灣在大陸市場最大競爭對手，台灣主要貿易夥伴泰半皆是ＴＰＰ、ＲＣＥＰ參與成員，所以，馬英九總統憂心台灣面臨生死存亡關頭，因而一再呼籲立法院加速通過「兩岸協議監督條例」及「兩岸服貿協議」，並及早完成「兩岸貨貿協議」簽署。

然而，這牽涉到當前朝野最核心的爭議，亦即是「全球化」是否會變質為「中國化」？兩岸經貿對台灣是「利多於弊」或「弊多於利」？追根究柢，「全球化」和「中國化」的爭議，關鍵在於台灣和大陸簽署實施服貿及貨貿協議後，能否順利加入ＴＰＰ、ＲＣＥＰ？如果答案具高度不確定性，我們就必須備有短期內無法加入的完整因應方案，才能厚植不被競爭對手打敗的實力，也才不致趨向「中國化」。至於兩岸經貿是「利多於弊」或「弊多於利」，關鍵則是在於前述結構性改革的成敗及兩岸風險的有效控管。只要凝聚全民意志落實改革，絕非不可克服的困難。

是以，涉及兩岸的敏感政策，馬政府教條式的政策宣導及民進黨的「逢中必反」，皆非可取；唯有務實面對解決問題，化解疑慮，才是突破當前政治僵局的可行之道。