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Cross-strait
integration harms poor: academic
WIN-LOSE: Closer ties with China benefit those
who invest there, but Taiwanese workers suffer and voting patterns have emerged
which support this trend, research showed
By Chris Wang / Staff reporter
Closer cross-strait trade ties are positively correlated with unemployment and
income inequality in Taiwan and have differentially affected the voting behavior
of rich and poor, a recent study showed.
Management and professional personnel and the rich, tended to support the
Chinese Nationalist Party (KMT) while laborers, farmers and poorer people
appeared to support the Democratic Progressive Party (DPP), said Lin Thung-hong
(ªL©v¥°), an assistant researcher at Academia Sinica, at a forum on Taiwan¡¦s
national economic development organized by the Taiwan Advocates.
Lin unveiled his findings in a thesis titled The emerging markets¡¦ impact on
unemployment and inequality in Taiwan, which compiled and analyzed statistics on
Taiwan¡¦s macroeconomic performance over the past three decades.
Foreign trade dependence on China and direct investment in China are both highly
correlated with the poverty rate in Taiwan and the more investment in China, the
higher the unemployment rate in Taiwan, Lin said.
Expansion in cross-strait trade and investment directly contributed to the
rising unemployment rate and stagnant wages for farmers and laborers. However,
the incomes of the middle class and those who engage in cross-strait trade
continued to rise, the study found.
The phenomenon also appears to have political implications, with the rich and
managerial class more likely to support the KMT and its cross-strait policy
while the poor and working class tend to support the DPP, he said.
That was in line with a previous survey on public attitudes toward the Economic
Cooperation Framework Agreement (ECFA) with China, which found that most
managers believed closer cross-strait trade ties would benefit the economy and
supported the agreement, while people with lower incomes disagreed.
Lin said his survey also found that while tax increases stop the rich from
getting richer, they did not stop the poor from becoming poorer.
Lin said that the findings suggest several policy recommendations, including the
promotion of trade with other major economies, such as the US, Japan and the EU,
to help lower the jobless rate; improvement of social welfare, because tax
increases do not help fight poverty; and placing income distribution high on the
government¡¦s agenda so as to not further exacerbate class conflict and political
division.
Academics on another panel also warned against economic dependence on China and
urged the government to offer help to businesspeople who wish to return to
Taiwan.
Chang Chia-ling (±i¹Å¬Â), an economics professor at National Chung Hsin University,
said the government should provide a better investment environment and upgrade
industry to entice back Taiwanese businesspeople and reduce dependence on China.
Lin Yuh-jiun (ªL¬R§g), a researcher at Chung-hua Institute for Economic Research
said that ¡§the business model Taiwanese businesses have become used to over past
decades has been rapidly vanishing¡¨ because of the changes in China¡¦s own
economic structure, which has become more influenced by domestic demand.
It will not be easy for Taiwanese businesses to change in response, she said,
adding ¡§that should be where the government comes in and helps them find new
markets in other emerging economies.¡¨
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