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Ma can no longer rely on gloomy
economics
By Nathan Novak 李漢聲
Sunday, Aug 29, 2010, Page 8
On Thursday, the Taiwan Economic News reported that Taiwan’s
export growth in the second quarter of this year was the highest of “Asia’s Four
Dragons.” With year-on-year export growth at 46.2 percent for the quarter, along
with 12.5 percent overall economic growth and a 1.1 percent inflation rate,
Taiwan’s economic recovery seems certain.
Of course this will be used by President Ma Ying-jeou’s (馬英九) administration to
demonstrate the government’s “correct” economic policies.
However, there is just one problem with the Ma government claiming victory in
this situation: They insisted that Taiwan could not compete in Asia without
signing the Economic Cooperation Framework Agreement (ECFA) with China. With the
second quarter ending on June 30 of this year, just one day after the signing of
the ECFA, one has to question the validity of these claims.
Trade numbers with China have also continued to soar. The Mainland Affairs
Council’s Preliminary Statistic of Cross-Strait Economic Relations showed that
both exports to and imports from China from Jan. 1 to May 30 this year were up
more than 60 percent. Keep in mind that these data were collected well before
the signing of the ECFA.
However, these numbers are nothing new. Besides the economic downturn in late
2008 and last year, which happened on Ma’s watch, trade growth and economic
dynamism have been the rule, not the exception, for Taiwan. True, Taiwan’s
relatively small domestic market, coupled with its dependence on trade, make it
especially susceptible to global economic downturns, but then again, “Asia’s
Four Dragons” are certainly no different.
In the end, these numbers should not surprise us, but yet they do, at least in
some ways. Why? Well, by listening to and reading information coming from the
Presidential Office over the past year or so, one would have been led to believe
that Taiwan’s economy — even Taiwan itself — was on the verge of collapse. The
Ma government consistently made statements arguing that without the ECFA, Taiwan
and Taiwanese businesses would not survive financially. However, late last year
and early this year, Taiwan not only survived in both the international and
China markets, it thrived.
The China-ASEAN Free Trade Agreement (FTA), which was completed in January, was
also supposed to negatively affect Taiwan’s competitiveness in the region. Given
both the totals from January to May of this year and the second quarter
information from the Taiwan Economic News, the FTA appeared to have no ill
effects on Taiwan’s trade.
So what gives? The Ma administration must have been looking at different
numbers. What else could explain such an enormous difference in information? The
numbers certainly don’t lie, and even though they have yet to lead to a drop in
unemployment, Taiwan businesses are certainly in no pain financially.
Could it be that the Ma administration was hoping that Taiwan businesses would
no longer be competitive? This may certainly be a possibility, given the
continuous push for the ECFA. It appears as though the Chinese Nationalist Party
(KMT)-led government was hoping against hope for a financial failure in order to
justify the agreement with Beijing.
With no failure, what options do the KMT leaders have?
They can only claim that they led Taiwan through the recent financial storm.
They can only claim that because of the ECFA, Taiwan survived the rough economic
waters. And they can only claim that their actions have proven “correct.”
However, we know better than that.
Nathan Novak is a student of China and the Asia-Pacific region
with a particular focus on cross-strait relations at National Sun Yat-sen
University.
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