With Total Government, Tsai Ing-wen Must Bear Total Responsibility

With Total Government, Tsai Ing-wen Must Bear Total Responsibility
China Times Editorial (Taipei, Taiwan, ROC)
A Translation 
May 20, 2016

Executive Summary: Ms. Tsai Ing-wen will be sworn in today. The DPP will enjoy “total government”. The new regime is clearly intent on "de-Sinicizing” Taiwan. But the global economy has taken a downturn, and Taiwan must upgrade its economy. This puts the new regime under enormous pressure. Any economic policy that attempts to de-Sinicize Taiwan will be subject to close scrutiny. If the economy remains in the doldrums two years from today, if wages stagnate and private investment dries up, the Tsai Ing-wen regime will be asked to step down and be judged.

Full Text Below:

Ms. Tsai Ing-wen will be sworn in today. The DPP will enjoy “total government”. The new regime is clearly intent on "de-Sinicizing” Taiwan. But the global economy has taken a downturn, and Taiwan must upgrade its economy. This puts the new regime under enormous pressure. Any economic policy that attempts to de-Sinicize Taiwan will be subject to close scrutiny. If the economy remains in the doldrums two years from today, if wages stagnate and private investment dries up, the Tsai Ing-wen regime will be asked to step down and be judged.

Tsai Ing-wen is determined to de-Sinicize. She refuses to recognize the 1992 Consensus. Therefore cross-Strait relations will not be what they have been for the last eight years. Cross-Strait economic and trade exchanges beneficial to both sides or even to Taiwan alone, will be reduced. Tsai Ing-wen has proposed a "New Southern Strategy" as her response. Although not explicit, its clear intent is to shift Taiwan's export-oriented investments from the Mainland to Southeast Asia and South Asia. These policies, put simply, are yet another form of de-Sinicization.

This trade policy, rooted in political ideology, contains serious blind spots. The blindness may even be willful. The first blind spot is the importance of the Mainland economy. The second blind spot is the time delay.

Mainland China is already the world's second largest economy, its largest exporter, and its second largest importer. Its growth rate has slowed to 6.5% to 7%. But among the major world economies, such a growth rate trails only India's. The Mainland market accounts for 40% of Taiwan's total exports. It is also the destination for most of Taiwan's external investments. These are hard realities that cannot be changed in the short term. Ignoring the importance of cross-Strait trade, or worse, abandoning the Mainland market, means certain disaster for Taiwan's economy. Advocates of the New Southern Strategy say "the Mainland economy is already dying", therefore Taiwan must change direction. These allegations are absurd.

When two economies engage in trade, a gravitational attraction manifests. When the distance between them closes, and one economy is much larger than the other, trade inevitably focuses on the larger one. Furthermore, the two sides share the same culture and the same language. Twenty years ago, during the Lee Teng-hui era, Mainland GDP was only 700 billion dollars. Lee Teng-hui promoted his Southern Strategy, then his “remain patient, avoid haste” policy. The result was clear. Taiwan's economy could not escape the Mainland economy's gravitational field. Mainland GDP has now reached 10 trillion dollars. Yet Tsai Ing-wen wants to shift our trade southward with her New Southern Strategy? The probability of success is vanishingly low.

It matters not whether one focuses on export markets or investments. Even assuming the New Southern Strategy is feasible, it would not take effect overnight. From start, to negotiations, to investments, to concrete economic rewards, would require at least two years and as many as five years before taking effect. Without knowing whether the New Southern Strategy will be a success or a failure, there is no benefit in the Tsai Ing-wen government rushing to dismantle cross-Strait economic and trade relations. Doing so would only provoke a sudden tightening of the Mainland market, and a shrinking of Taiwan's economy. As Premier Chang San-cheng noted, the New Southern Strategy "cannot overtake the Mainland overnight. Wishful thinking will only send shockwaves through Taiwan's economy".

Over the next four years, Taiwan's trade and economic marginalization will become more serious. The past 15 years has been an era of global Free Trade Agreements. Taiwan alas, has been kept out of the loop. Tsai Ing-wen has high hopes for the Tsai regime's sole solution -- the TPP. But the presidential candidates for both major US political parties have expressed opposition to the TPP. Therefore it may be stillborn. Taiwan cannot possibly complete negotiations and join within four years. Only the MTA might prevent Taiwan's economic marginalization. But because the DPP assumed power, the MTA is stillborn. Therefore Taiwan's exports and private investment will be harmed. Can the new government really keep chanting “TPP!” for the next four years? Is there any other way out?

During the Ma administration, the green camp reveled in criticizing the substantial increase in Mainland tourists to Taiwan. They even claimed it was of no help to the economy. But anyone with even a shred of economic sense knows that such allegations are nonsense. If Mainland tourism to Taiwan is substantially reduced, the impact on the growth rate will be secondary. The impact on the job market will be devastating. Tourism is a service industry. It brings far more employment opportunities than high-tech industry, and can absorb more low-end labor.

The new Premier Lin Chuan expects cabinet members to “produce results in the first 100 days". Frankly this is too rushed and too outrageous. The positive or negative results of economic policy are not going to manifest themselves in a mere 100 days. Talk of "producing results in the first 100 days" is mere rhetoric. On the other hand, half a term, or two years, is probably a reasonable time frame.

Two years later, how will people feel about the economy? Such feelings are not a matter of mere numbers. High or low numbers only make sense within a time frame. What's important is that people feel the difference. Has it increased or decreased? Are jobs easier to find? Or does the shadow of unemployment still hang overhead? Such feelings are closely related to whether businesses have increased investment in Taiwan or fled elsewhere. Tsai Ing-wen insists on her de-Sinicization economic policy. Its effectiveness will eventually be subject to rigorous testing. Will the new government pass muster?

全面執政 蔡英文就要全面負責
2016年05月20日 中國時報

蔡英文女士今天就要宣誓就職，民進黨全面執政，非常明顯，新政府將盡量「去大陸化」。但面對這波全球景氣低潮及台灣經濟轉型壓力，「去大陸化」的財經路線很快就會受到嚴格的檢驗，如果2年後，經濟仍低迷、所得與薪資停滯如故、民間投資空洞，蔡英文團隊很快就要被請下「神壇」，面對批判。

蔡英文「去大陸化」政策主軸下，在兩岸政策方面，既然不接受「九二共識」，兩岸關係必然不會再有過去8年的正向良好互動，過去兩岸經貿往來曾有的互利、甚至讓利必然減少。也因此，蔡英文提出「新南向政策」因應，雖未明言，但明顯是要把台灣的出口、投資由面向大陸移到面向東南亞及南亞。這些政策方向，一言以蔽之就是「去大陸化」 。

不過，這種基於政治意識型態產生的經貿政策，很明顯有嚴重盲點，甚至是蓄意視而不見。第一是大陸經濟的重要性，第二是移轉時的時間落差。

大陸已經是全球第二大經濟體、最大出口國、第二大進口市場，雖然經濟成長率放緩到6.5%到7%之間，但在全球各大經濟體中，此一成長率僅稍遜於印度而已；大陸市場占台灣總體出口的4成，也是台灣對外投資最多的國家，這些都是短期內毫無改變可能的「硬結構」，忽視兩岸經貿的重點性，甚至想要揚棄大陸市場，對台灣經濟而言必然是大禍一場。倡導新南向政策者往往以「大陸經濟已不行了」，台灣必須轉向，其言甚謬。

更何況兩個經濟體的貿易往來，存在著所謂的「地心引力」——雙方距離近、一方經濟體龐大，貿易量必然集中於此，兩岸更兼有文化、語言相通的優勢。20多年前，大陸經濟體GDP只有7000多億美元的時代，李登輝提出南向政策、再祭出戎急用忍，結果如何已非常明確──台灣經濟未能脫離大陸經濟的「地心引力」。以現在大陸GDP已達10兆美元，蔡英文卻要把經貿主體移到「新南向」，成功機率讓人擔心。

再者，不論從出口市場著眼，或從企業投資看，就算新南向有可執行性，但也不會是一夕可見效落實，從啟動、談判、投資、落實到真正享受到經濟果實，必然有時間落差，短則2年，長一點要5年以上，才可能見到效果。在新南向成敗難知、毫無效益之時，蔡英文政府如就「急著拆台」，讓兩岸經貿、大陸市場如驟然緊縮，台灣經濟危矣！這也是行政院長張善政對新南向政策的評語：「（新南向）不是一夜就可趕過大陸，若一廂情願，將對台灣經濟造成衝擊。」

未來4年，我們也幾乎已可預見台灣經貿邊緣化問題將更形嚴重。近15年的全球經貿是FTA（自由貿易協定）的年代，而台灣算是完全落了隊。蔡英文寄望甚深、而且是蔡團隊「唯一解答」的TPP，先不談美國兩黨總統候選人先後表態反對推動，可能胎死腹中，台灣也不可能在4年內完成談判加入。唯一可紓緩經貿邊緣化危機的兩岸貨貿，也因民進黨執政而夭折，此對台灣出口與民間投資都會有傷害。新政府不能喊TPP就喊4年吧？是否有其他出路答案呢？

而在馬政府時期，對大幅增加的陸客來台觀光，綠營人士總喜歡批評非議，甚至貶斥為對經濟毫無效益；稍有經濟常識就知這些說法不實。未來如果陸客觀光大幅減少，對經濟成長率減少的衝擊在其次，對就業市場的影響才是致命。觀光產業是服務業，其帶來的就業機會遠遠多於高科技產業，且能吸納更多中低階勞力。

新任行政院長林全要閣員努力交出「百日政績」，坦白說，過急了、也離譜，經濟政策的正負效益不會在短短百日內顯現，「百日政績」大概只能用「說」的。不過，以任期一半的兩年作檢驗，該是妥善的時間點。

兩年後，民眾對經濟的感受如何？這種感受不是單純數字而已，因為數字高低與比較基期有關，因此重要的是民眾感受到的是所得提高還是降低？工作更好找還是失業陰影籠罩？而民眾的這些感受，其實又與企業是在台灣增加投資還是出走有密切關係。蔡英文既執意推動「去大陸化」的經濟政策，其成效最終就要接受全民嚴格的檢驗，新政府，過得了這一關嗎？