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“Facing Malfunction in System, Democracy, and Taiwan Itself” Series 3: Opening Up on All Fronts to Rescue Taiwan from the Brink of Collapse

icon2017/09/06
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   “Facing Malfunction in System, Democracy, and Taiwan Itself” Series 3

 Opening Up on All Fronts to Rescue Taiwan from the Brink of Collapse

China Times Editorial (Taipei, Taiwan)

August 26, 2017

 Translation of an Excerpt

 

It is not alarmist to be worried that Taiwan’s economy will likely become poorer and march toward the brink of collapse. This year, Taiwan's economic growth rate can expect to reach 2%; it is not too bad compared to recent years. However, it is not optimistic for the medium and long-term. Look at the negative news one after another in recent days, including the following: Over 200,000 youth in Taiwan are unemployed; real wages regressed to the level of 17 years ago; 1.69 million households of lower income cannot make ends meet for 10 consecutive years; plus the crisis of Taiwan's "brain drain" as reported by foreign media outlets, so much so that even pro-Taiwan independence youth have transcended their beliefs by going to the other side of the Strait to look for opportunities.

The Hon Hai Foxconn Group, the Formosa Plastics Group, and other enterprises have announced huge investments in the United States, but do not plan to invest in Taiwan. In the future, Taiwan Semiconductor Manufacturing Company’s (TSMC) wafer plant will possibly be moved to other countries on account of an unstable power supply. Enterprises in general reduce investments over worries about power shortages. “One mandatory holiday, one flexible day-off” further impacted enterprises’ willingness to make investments and hike wages. After their pension reforms, retired military, civil servants, and public school teachers have shrunk their consumption. The number of Mainland tourists continues to significantly decline. All of these new developments will likely push the economy further to the bottom. If we do not explore the fundamental reasons for these phenomena, and attempt to cope with the situation with minor policies or measures, wage levels and employment opportunities will continue to decline and it will be difficult for the economy to avoid going to the brink of collapse.

The most serious impact of weak investments is that when both sides of the Strait do not have a "cross-Strait services trade agreement," many companies that offer innovative services will not come and invest because Taiwan’s market is too small and the risks too big. Even if there are investments which succeed, they can only expand within the island as they are unable to duplicate their success stories in bigger markets of the same language, creating more and better employment opportunities.

In system, Taiwan is already a highly open economy. However, in reality, Taiwan has a good investment environment, but no investments, and the key reason is that Taiwan has adopted a closed-door policy toward the Mainland, the most vibrant economy in the world. If the government can strive to pursue stability in cross-Strait relations, letting Taiwan's technological innovation or quality services utilize the Mainland, the gigantic market that is now in the process of turning from "second to first," the economy will have an opportunity for resurgence. Forsaking this, assuming the leadership level introduces endless new measures, and even with another turn-over of ruling parties, unemployment and indebtedness will all remain the "new normal" of many young families, which is something unavoidable.

(End of series)

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