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Editorial: Closer
ties with Japan exigent
Facing the same challenges of a stronger China in Asia and a weakening economy
at home, a Japanese trade group said on Friday that Taiwan and Japan should
forge a closer relationship and establish a free-trade pact to benefit the two
countries. The suggestions came from an annual white paper released by the
Japanese Chamber of Commerce and Industry in Taipei and indicate that Taiwan and
Japan need to tackle the problem of China¡¦s growing economy together.
Other suggestions in the paper were that Taiwan should speed up follow-up
negotiations with China over the cross-strait Economic Cooperation Framework
Agreement, sign more free-trade pacts with other regional economies and develop
a more friendly environment for Japanese businesses in Taiwan.
The Japanese trade group has the same stance as its US and European
counterparts: All of them hope the Taiwanese government can strengthen the
nation¡¦s investment environment and protect their country¡¦s investors. They also
expect their governments to establish direct dialogue with the Taiwanese
government to resolve bilateral trade issues and economic challenges.
However, the Japanese chamber¡¦s suggestions demand close attention, as Japanese
firms made more investments in ASEAN economies than in China during the third
quarter of the year because of China¡¦s labor shortage and wage increase
problems, as well as because of anti-Japanese sentiment triggered by the dispute
over the Diaoyutai Islands (³¨³½¥x). To secure investment at a time when Japanese
companies are looking to Asian countries other than China, Taiwan must act
quickly and efficiently, because regional competitors are probably thinking the
same thing.
For both Taiwan and Japan, there has certainly been an economic threat from
China in recent years. The main challenge has been China¡¦s fast economic growth
leading to relocations of Taiwanese and Japanese industries to China. Such
relocation has inevitably led to outflows of both capital and talent. China has
now become the largest export market for Taiwan and the biggest trade partner
for Japan, meaning Beijing has greater influence on them than they do on it.
However, sharing the pain of China¡¦s economic magnetism is in itself probably
not the most important factor in pushing Taiwan and Japan to collaborate. A
common interest in promoting security is more likely to advance the trade
relationship between the two countries. Moreover, a relationship that wins
strong support from the Taiwanese and Japanese public also matters. A
fundamental problem in the relationship between China and Japan is that it is
stuck in the past, as reflected in the anti-Japanese protests, while there is
much less of such sentiment in Taiwan.
Taiwan and Japan have long enjoyed a good global supply chain relationship, with
Taiwanese companies having primarily manufactured products using Japanese
electronic components and machinery. What underlies this relationship is a
strong commitment to mutual benefit which should be reflected in further
collaboration between the two countries: Japan adjusts its Asian investment
strategy and Taiwan secures technology know-how to upgrade its industrial
infrastructure.
Taiwan-Japan trade ties still have ample room for improvement and there will be
challenges before companies in the two countries can develop their business
relationships into strategic partnerships.
As stated in the chamber¡¦s white paper, Taiwan¡¦s continued loss of high-end
talent to China worries Japan. News that two former senior executives of AU
Optronics Corp have been charged with allegedly leaking trade secrets to a
Chinese rival highlights concerns over industrial espionage, but also over China
luring Taiwanese talent through generous salaries. If the hemorrhaging of
industrial talent continues, what will Taiwan have to offer to foreign
investors, including Japan?
The white paper is not just a summary of important issues, but also a warning to
Taiwan that policymakers need to take note of.
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