New Southern Policy: Opiate of the Voters

New Southern Policy: Opiate of the Voters
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
October 1, 2015

Executive Summary: DPP presidential candidate Tsai Ing-wen says that upon becoming president, she will promote a "New Southern Policy". As usual the specifics of her policy are a muddle. But her pledge to "promote trade diversification... improve relations with ASEAN and India" show she has not changed her long-held anti-Mainland stance. She argues that the Kuomintang government's cross-Strait trade policy "unifies" trade. She says she would undo this, by "diversifying" trade, beginning with ASEAN and India.

Full Text Below:

DPP presidential candidate Tsai Ing-wen says that upon becoming president, she will promote a "New Southern Policy". As usual the specifics of her policy are a muddle. But her pledge to "promote trade diversification... improve relations with ASEAN and India" show she has not changed her long-held anti-Mainland stance. She argues that the Kuomintang government's cross-Strait trade policy "unifies" trade. She says she would undo this, by "diversifying" trade, beginning with ASEAN and India.

Twenty-one years ago, in 1994, Taiwan already had a "Southern Policy". Back then, Lee Teng-hui was in power. The Mainland underwent reform and liberalization, making it highly attractive to Taiwan-based capital. The Lee regime argued that the Mainland economy was about to implode. It pressured Taiwan business leaders to invest in the ASEAN nations. But all good things must come to an end. In 1997, starting with Thailand, the Asian financial tsunami spread. Turmoil inundated Indonesia. The following year, large-scale anti-Chinese violence erupted. Taiwan business leaders bore the brunt of the violence. Not only did they lose money, some were even beaten and abused. Since then, those Taiwan business leaders who went south have either downsized or pulled out altogether. Taiwan business leaders who rejected the government's "sage counsel", who "risked death" by going to the allegedly "high-risk" Mainland, caught the trade boom express train. Japanese futurist Kenichi Ohmae compared the two paths, and noted that the biggest difference between Taiwan and Japan was that Japanese business leaders were too deferential toward their own government, while business leaders on Taiwan were not. That is why business leaders on Taiwan were more successful.

In fact, whenever the government promotes any economic policy, the most important consideration must be professionalism and rationality, not ideology. The most expedient way to formulate policy is to fall back on ideology. No thinking is required. Decisions can be reached instantly, Answers are ready made. No expenditures are required. The government can of course choose to base its policy on ideology. After all, talk is cheap. But business leaders must invest real money. If they lose it, the government will not compensate them because it gave them bad advice. Ultimately the business leaders themselves will suffer the consequences. Ms. Tsai may have the power to promote policies consistent with her ideology. But Taiwan business leaders' decisions must be rooted in rationality and professionalism. From this perspective, the "New Southern Policy" is superfluous.

Why? Whether one chooses to go west, south, east, or north, the goal is to make a profit. Even brand name companies in advanced countries, configure their production chains based on the profit motive. Over the past 15 to 20 years, the main production chains in East Asia have been located in Japan, Korea, Taiwan, and the Mainland. Japan sends its raw materials and components to Taiwan and South Korea. In both places, semi-finished products are then shipped to the Mainland, then assembled into finished products. From the Mainland, they are then shipped to consumers the world over.

Most manufactured products today are labeled "Made in China". But that does not mean the most profit or added value accrues to the Mainland. Similarly, Taiwan and South Korea are the Mainland's largest export market. But that does not mean Taiwan and South Korea are "dependent" upon the Mainland. One might even say the opposite, that the Mainland is dependent on Taiwan and South Korea.

East Asian division of labor patterns will change. Mainland wage levels are rising. The manufacture of some products may move to Vietnam, where wages and overhead remain relatively low. The Mainland is already moving up the production ladder. It is becoming a supplier of semi-finished materials from Japan to Taiwan or South Korea to the Mainland market, to Europe and the US market "four cornered trade" supply chain. It may well become part of the "five cornered trade" supply chain that includes the Mainland, Europe, the US, and ASEAN. No matter what, when this happens, the government will not need to encourage business leaders to invest in the ASEAN countries. They will do so naturally. Therefore the New Southern Policy is superfluous.

Another change is the Mainland's "One Belt, One Road" and "Asian Infrastructure Investment Bank" strategy. This strategy links Mainland-related supply chain countries and regions through infrastructure investment, and facilitates their rapid development. The Mainland will then enjoy lower shipping costs. It will then be able to obtain raw materials from South East Asia, South Asia, Europe, and Russia, and supply finished or semi-finished products to these regions. Once the One Belt, One Road is complete, the Mainland and South East Asia and South Asia will enjoy closer economic relations, just as the United States and neighboring Canada and Mexico enjoy close economic relations.

Tsai has proposed a New Southern Policy. If Taiwan business leaders respond, the results may not meet her expectations. In fact, they may be just the opposite. During the 1990s, South East Asia, South Asia and the Mainland were in competition. Now however, they may be in a cooperateive relationship. If Taiwan imposes a New Southern Policy on Taiwan business leaders, it may actually help the Mainland realize its One Belt, One Road vision. It may actually strengthen cross-Strait economic relations. If Tsai thinks such a policy can weaken cross-Strait economic and trade relations, that is willfull blindness. Responsible national leaders must realize that the Mainland is already the world's second largest economy. It has already signed FTAs with most countries, including ASEAN countries. Taiwan faces marginalization. How can it be saved? Certainly not by foisting a long-discredited, 20 year old policy off on voters suffering from historical amnesia.

We hope that each party's presidential candidate will refrain from ideologically-based policy formulation. We hope they will not just hear what they want to hear. Policies must not be reduced to slogans. The candidates must look at changes in the environment, then evaluate their own strengths and weaknesses. Only then can they arrive at the right decision.

新南向政策 是在麻醉選民

2015年10月01日 中國時報

民進黨總統候選人蔡英文表示，她當選總統以後，要推動「新南向政策」。一如以往，政策的具體內容不明，但從其「推動貿易多元化……強化對東協和印度的整體關係」的聲明可以看出，其基本理念，和過去她長期反中的立場一致，認為國民黨政府的兩岸貿易政策是「一元化」貿易，她要扭轉過來，改成「多元」貿易，而首選是東協和印度。

21年前的1994年，台灣曾經有過「南向政策」。當時李登輝主政，鑑於大陸改革開放後對台商投資的吸引力，以及他們相信大陸經濟勢將崩潰，開始推動台商改到東協投資。但是，好景不常。1997年亞洲從泰國起，金融風暴蔓延。處於風暴中的印尼，在次年發生大規模的暴力排華運動，台商首當其衝；不但金錢損失，有些還招致毆打或凌辱。從那時候起，原先南進的台商或者縮小規模，或者撤資。當時沒聽政府「忠告」而「冒死」前往「高風險」大陸地區投資的許多台商，則搭上了貿易擴張的那班車。這樣的對比下，曾導致日本趨勢家大前研一說，台商和日商最大的不同，在於日商太聽政府的話，而台商不聽政府的話，所以相對地比較成功。

其實，政府推動任何經濟政策，最重要的是要靠專業和理性，不能依靠意識形態。依靠意識形態來做政策最省事：不需要思考，而且決策很快，答案很現成、毫無成本。但是，政府可以依靠意識形態出一張嘴，廠商的投資如果賠錢，政府不會理賠，最後還是要廠商自行承擔後果。蔡女士有權力推動符合她意識形態的政策，但是台灣廠商的決策，應當根據的是理性和專業。從這個角度來看，「新南向政策」的提出，其實是多餘的。

為什麼？西向、南向還是東向、北向，最基本的道理就是到哪裡投資可以獲得利潤。而先進國家品牌大廠也是根據利潤最大法則，決定他們的生產鏈要怎麼配置。在過去15到20年，這個生產鏈主力在東亞的四個地方：日本、韓國、台灣和中國大陸。日本把關鍵原料和組件出口到台灣和韓國，在這兩個地方做成半成品後出口到大陸，再由大陸組裝為成品，運往世界各地的消費者。

這就是為什麼在全世界，雖然大多數製造業的產品都貼了「中國製造」的標籤，不代表最重要的或最賺錢、加值最多的部分在中國大陸。同理，台灣和韓國都以中國大陸為最大出口市場，也不代表台、韓「依賴」中國。甚至可以說剛好相反，是中國大陸「依賴」台、韓。

但是東亞分工的型態本身就會變化。隨著大陸工資水準的上升，有些產品可能改到越南等工資還處於低檔的地方去做，成本比較低廉。更有可能是，大陸自己升級成為半成品原料供應者，也就是從日本到台（韓）到大陸到歐美市場供應鍊的「四角貿易」，可能變成在大陸和歐美之間多加一個東協的「五角貿易」。無論是那一種可能，當這種情況發生時，政府不必鼓勵，廠商自然會到東協投資。所以說，新南向政策可能是多餘的。

還有另外一個變化，就是對岸的「一帶一路」和「亞投行」策略。這樣的策略構想，是要從地理位置上把所有可能和中國大陸有關的供應鏈國家和地區，都藉由基本建設投資的增加，而快速地發展起來。經過這樣的發展，大陸可以用較低廉的運輸成本，取得它所需要來自東南亞、南亞、歐陸和俄羅斯的原料，以及它所供給到這些地區的成品或半成品。所以，一帶一路完成後，大陸和東南亞、南亞的經濟關係勢必增強，一如美國和相鄰的加拿大、墨西哥有密切的經濟關係。

所以，蔡提出「新南向政策」，廠商如果真正響應，最後的結果可能不但不如她所望，而且可能剛好相反。1990年代，東南亞、南亞和中國大陸可能是競爭關係，現在，可能是互補關係。所以台灣經由新南向政策，等於是幫助大陸實現其一帶一路的構想，而最終使兩岸經濟關係更為緊密。如果以為提出這樣的政策，就可以為兩岸的經貿關係降溫，這不是愚昧嗎？負責任的國家領導人應該思考的是，中國大陸已經是世界第二大經濟體，早已與包括東協在內的多數國家簽署FTA，台灣卻陷入邊緣困境，應該如何脫困，而非端出20餘年前早已失敗的政策麻醉選民。

我們希望各黨總統參選人，不要再用意識形態提出政見了，不要只聽得進去你們想聽的意見，使得政見淪為口號，必須看清楚環境的變化與自己的優劣勢，才能做出正確的判斷和決定。