Cross-Strait New Normal: Competition or Cooperation?

Cross-Strait New Normal: Competition or Cooperation?
United Daily News Editorial (Taipei, Taiwan, ROC)
A Translation
October 30, 2014

Executive Summary: Recently, cross-Strait relations entered a consolidation phase. Politically, the hoped for Ma Xi meeting turned out to be a bust. Xi Jinping has reverted to "one country, two systems." Hong Kong's Occupy Central movement and Taiwan spies turning Mainland students have been making waves. Economically, the situation is equally worrisome. The economic slowdown on the Mainland is here to stay. Xi and Li continue to push for reform. They hope to upgrade the mainland economy. This is leading to a qualitative change in cross-Strait economic and trade relations. As a result, cross-Strait competition is gradually overriding the former "win-win" relationship. This is apparently becoming the norm.

Full Text Below:

Recently, cross-Strait relations entered a consolidation phase. Politically, the hoped for Ma Xi meeting turned out to be a bust. Xi Jinping has reverted to "one country, two systems." Hong Kong's Occupy Central movement and Taiwan spies turning Mainland students have been making waves. Economically, the situation is equally worrisome. The economic slowdown on the Mainland is here to stay. Xi and Li continue to push for reform. They hope to upgrade the mainland economy. This is leading to a qualitative change in cross-Strait economic and trade relations. As a result, cross-Strait competition is gradually overriding the former "win-win" relationship. This is apparently becoming the norm.

In mid-September, this newspaper published a report on cross-Strait relations. The report revealed that people are concerned about cross-Strait economic and trade relations. They think it is changing from a mutually beneficial relationship, to a more competitive relationship. Cross-Strait trade and the peace dividend consitute the cornerstone of cross-Strait relations. We must respond to this new cross-Strait economic norm, by establishing a new framework for long term economic cooperation.

Since the second half of 2011, Mainland economic growth slowed from over 9% to under 8%. Growth went from high speed to medium speed. According to a Chinese Academy of Social Sciences forecast, this year the Mainland's economic growth rate fell to about 7.3%. Next year it will fall to around 7%. The Mainland economy continues to slow. This will probably lead to internal controversy over "steady growth." But Xi and Li are determined to promote reform. They are not looking back. In May of this year Xi Jinping repeatedly mentioned the "new normal." He was reminding people on the Mainland that they must take the economic downturn in stride. They are committed to changing their economic model. They are pursuing economic growth rooted in quality and innovation. In other words, for the next several years, Beijing will be using the time to make changes. It will temporarily sacrifice economic growth in order to upgrade the Mainland economy. This "new normal" will be a key factor in cross-Strait economic development.

An upgraded version of the Mainland economy provides Taiwan with an opportunity, but also a challenge. In recent years, the Mainland's rapid industrial transformation has increased competitive pressures on Taiwan. The Mainland has a vast market of 1.3 billion people. Economic restructuring and market reforms have a powerful magnetic effect on capital, technology, and talent. They provide investment opportunities for Taiwan. Considerable core technology and professional personnel and managers is flowing to the Mainland. This will seriously undermine Taiwan's own economic transformation and upgrade momentum.

The Mainland's industrial sector receives strong support from Beijing. It competes with Taiwan businesses for personnel, technology, and market share. Taiwan's two major export industries, the ICT industry and the petrochemical industry, are feeling the heat. Over the past two years, the Mainland's ICT industry grew at an alarming rate. In particular, Mainland brand smart phones and tablet PCs swept the low-end market. They pose a serious threat to the survival and development of Taiwan businesses. The State Council recently moved to support the Mainland's semiconductor industry. It intends to spend at least 600 billion RMB building foundries. The goal of the Mainland's semiconductor design industry is clearly to challenge Taiwan leaders TSMC and MediaTek. If Taiwan's ICT industry fails to transform and upgrade itself, experts estimate both its brands and OEM industry will lose out within five years.

The Mainland's petrochemical industry is also gaining on Taiwan's. The Mainland's Coal Chemical Technology and petrochemical industry production capacity continue to expand. Taiwan's industry is finding it harder to breath. Taiwan's most important raw material export is a chemical fiber known as purified terephthalic acid (PTA). According to news reports, exports fell precipitously between 2011 and 2013, from 108.1 billion NTD to 15.9 billion NTD, as much as 80%. Taiwan-based investors have abandoned Taiwan and fled to the Mainland. The China Petroleum System industry has invested in the Mainland's Fujian Ligure naphtha cracking plant. That should be seen as a warning sign. Taiwan and Mainland industries are in increasing international competition with each other. Some magazines have called it "A Mainland threat, hitting us full force." Such characterizations are not alarmist.

Cross-Strait economic competition has become the new normal. This underscores the urgent necessity of institutionalized cross-Strait cooperation. So-called institutionalized cooperation should not be limited to ECFA, the STA, and other market-opening mechanisms. The two sides' market systems and governments are different. They need a coordination mechanism that avoids vicious competition, avoids excessive government intervention, and market distortions. This will enable cross-Strait cooperation to truly benefit both sides.

In terms of overall resources and personnel movement, the two sides should establish an overarching "big roof one China framework" with two distinct regions. Coordination of policies and regulations would promote balanced two-way flow, reducing the negative impact of the Manland's economic magnet effect on Taiwan.

More importantly, the Mainland economy is being upgraded, and Taiwan's economy is undergoing transition. They can benefit each other by cooperating. They can engage in both bilateral cooperation and regional cooperation. A collective effort by industry, government, and academia, can develop specific objectives, projects, and roadmaps, to ensure orderly long-term cooperation. If the two sides adopt this path, they can turn competition into cooperation, Let the "Taiwan Dream" and "China Dream" coexist. The current stalemate in cross-Strait agreements can be broken. Cross-Strait relations can acquire new momentum, enabling it to advance.

兩岸新常態：競爭或合作？
【聯合報╱社論】
2014.10.30 02:47 am

兩岸關係近來已進入盤整階段。除了政治面因馬習會破局、習近平重提「一國兩制」、香港占中事件、台諜吸收陸生事件等因素而產生波折外，在經濟面也出現令人擔憂的狀況。尤其是中國大陸經濟增長減速已成常態，習李堅定推動深化改革路線，全力追求升級版的大陸經濟，從而導致兩岸經貿關係的質變。於是，雙方「競爭態勢」已逐漸凌駕「互利雙贏」關係，並有常態化趨勢。

今年九月中旬本報發布兩岸關係定期調查報告，亦顯示愈來愈多民眾對兩岸經貿由「互利」轉趨「競爭」的憂慮。鑑於兩岸經貿及和平紅利是兩岸關係的基石，面對兩岸經濟新常態，如何因應此一變化，建立可長可久的新經濟合作架構，可說是當前最迫切的兩岸課題。

自二○一一年下半年開始，大陸經濟從逾九％的高速增長轉為低於八％的中速增長。據中國社科院預測，今年大陸經濟增長率降為七‧三％左右，明年將再降至七％左右。大陸經濟持續減速，在內部引發應否「穩增長」的爭議，但習李表現出推動改革不回頭的意志力，今年五月後習近平幾次談話皆提及「新常態」，意在提醒內部須以平常心面對經濟下調，致力改變經濟模式，追求講質量及創新的經濟增長。換句話說，未來幾年北京將以時間換取空間，犧牲經濟增長，來打造大陸經濟「升級版」。此一「新常態」，可說是未來兩岸經貿走向的關鍵影響因素。

升級版的大陸經濟，對台灣一方面是機會，但挑戰也紛至沓來。事實上，近幾年大陸產業的快速轉型，對台灣已構成與日俱增的競爭壓力。大陸逾十三億人口的龐大市場，推動經濟轉型及深化市場改革，其衍生對資金、技術及人才的強大磁吸效應，導致台灣投資機會、核心技術及專業和經理人才大量流向大陸，從而嚴重削弱台灣本身經濟轉型升級的動能。

大陸產業部門在北京的強力支持下，和台商搶錢、搶人、搶技術、搶市場。台灣兩大出口產業資通訊（ＩＣＴ）及石化業已感受到大陸業者的強大威脅。這兩年大陸ＩＣＴ業增長速度驚人，尤其大陸品牌智慧手機和平板電腦席捲中低價位市場，已嚴重威脅台商的生存發展。最近大陸國務院更傾國家之力支持半導體產業，至少將砸下六千億元人民幣扶植晶圓代工、半導體設計等產業，目標顯然針對台灣兩大龍頭台積電及聯發科而來。如果台灣ＩＣＴ業不能奮起轉型升級，專家估計，五年內將出現品牌及代工「雙輸危機」。

大陸石化業對台灣亦節節進逼，大陸煤化工技術進展及石化業產能不斷擴充，嚴重壓縮台灣業者生存空間。據媒體報導，自二○一一到二○一三年，台灣最重要出口化纖原料純對苯二甲酸（ＰＴＡ）出口額從新台幣一○八一億元劇降至一五九億元，減幅高達八成。國內業者投資亦棄台灣而就大陸，如泛中油體系業者投資大陸福建古雷輕油裂解廠，就是警訊。台灣各行各業和大陸業者在兩岸和國際市場競爭有增無減，有雜誌以「大陸威脅，全面來襲」形容，並非危言聳聽。

面對兩岸經濟由互利轉趨競爭的新常態，更加凸顯兩岸制度化合作的必要性和急迫性。所謂制度化合作，不應僅限於ＥＣＦＡ、兩岸服貿及貨貿等以市場開放為主的合作架構，而且應積極針對兩岸市場體制及政府角色的差異性，建構出一套避免惡性競爭及因政府過度介入致造成市場扭曲的協調機制，讓兩岸合作能夠真正體現互利雙贏。

在總體資源及人員移動方面，雙方亦應立基於「一中屋頂」下兩個不同地區的觀念和架構，透過政策和法規的協調，促進雙向平衡流動，降低大陸經濟磁吸效應對台灣的負面影響。

更重要的是，在大陸經濟升級版和台灣經濟轉骨藍圖之間，兩者須找到可以互利雙贏的合作空間，包括在兩岸及區域間的合作，透過雙方產官學集體努力，擬定具體合作目標、項目及路線圖，讓長期合作能夠有序開展。如果能朝此一大方向全力以赴，兩岸必能化競爭為合作，讓「台灣夢」和「中國夢」可以相容而不互斥，則目前陷於僵局的兩岸協議或可迎刃而解，兩岸關係亦得以有繼續推進的新動能。