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The Liberty Times
Editorial: Service trade deal is the final blow
As more evidence comes to light, the truth gradually becomes clearer and the
public finally find out what really happened last month when the Chinese
Nationalist Party (KMT) and the Chinese Communist Party (CCP) signed a service
trade agreement. The pact was signed behind closed doors following negotiations
in which the administration of President Ma Ying-jeou (馬英九) exposed its
underlying agenda.
The situation is now clear as day: Ma’s is an ideologically driven, pro-Chinese
government that relies on a revived authoritarian decisionmaking process to
direct a bureaucracy that places theory ahead of practice.
The result is great harm to the public’s right to work and to people’s way of
life. The service trade agreement will be so destructive that even the KMT’s own
legislative speaker has publicly said he cannot endorse it. That should reveal a
little about the severity of its potential impact.
The Ministry of Economic Affairs directed the Taiwanese side of the deal,
sending representatives to talks in China and setting the agenda behind the
scenes.
To negotiate an agreement under which China would deregulate 80 service
sub-sectors and Taiwan 64, and then be proud of it and think it is something to
trumpet in Taiwan reveals much about the ministry’s attitude and goals.
Chen Xing (陳星), head of the Department of Taiwan, Hong Kong and Macau Affairs at
the Chinese Ministry of Commerce, reportedly said it was “quite unexpected” that
the agreement would generate such a backlash in Taiwan, since China was not very
satisfied with the extent of Taiwan’s proposed deregulation. That was also why
the Taiwanese delegation felt “wronged.”
However, Chen also said that if it had not been for Taiwanese misgivings, China
would have deregulated “more than 80 sub-sectors.”
These statements may seem contradictory, but that misses the main point: What
Beijing wanted to achieve was to take some of the heat off the KMT while at the
same time distancing itself from it.
Why would the government’s delegation be let down by its counterpart after
already having prostrated itself?
Vice Minister of Economic Affairs Francis Liang’s (梁國新) recent defense of the
agreement reveals the quality of Taiwan’s key decisionmakers.
He said that McDonald’s has been investing in Taiwan for the past 29 years and
currently operates 400 restaurants, but that he has yet to see a blond,
blue-eyed person selling hamburgers.
This is such a irrelevant point that it can be easily refuted. Small wonder
then, that Chen was quick to distance himself from Taiwanese officials.
The main reasons US investment in Taiwan has not led to an influx of US citizens
are salary levels, geography and language.
According to data from the IMF and the Directorate-General of Budget, Accounting
and Statistics, Taiwan’s average per capita GDP last year was US$20,364. The
figure for the US was US$50,753 and US$43,653 for Japan.
If McDonald’s were to start employing staff from the US, it would help raise
salary levels and increase the internationalization of its social environment,
management techniques and technology. This would be welcomed by a majority of
Taiwanese, so why is the inflow of US workers so low?
This lack of Western workers underlines why government measures aimed at
expanding Taiwan’s international presence are insufficient and exposes the
government’s ineptness and lack of responsibility.
The Ministry of Economic Affairs is the main actor in economic policy
implementation, but because it is incapable of opening up the nation, it is
instead isolating it and welcoming Chinese capital and white-collar workers.
Last year, the average annual per capita income in China was US$4,944,
one-quarter of Taiwan’s and one-tenth of the US’. A look at the monthly salaries
of 500,000 Chinese undergraduates in 2010, six months after graduation, shows
that the top five cities were Shenzhen at 3,280 yuan (US$534), Guangzhou at
3,234 yuan, Zhuhai at 3,191 yuan, Shanghai at 3,064 yuan and Beijing at 2,818
yuan. Even if the past few years of salary increases are included, Taiwan still
looks attractive.
Now, the service trade agreement is kicking the door to the regional service
industry wide open, allowing any number of so-called Chinese white-collar
workers with US$200,000 in the bank to bring three households — nine people — to
Taiwan.
On one hand, Chinese salaries are lower, and on the other, there are almost no
geographical, linguistic or cultural obstacles to Chinese firms entering Taiwan.
Even with no political overtones, such an influx would cause a massive downward
pressure on Taiwanese salaries. Given the unequal scale of Chinese and Taiwanese
enterprises, the local industrial chain would be easily eliminated.
This is why many in the industries pushed to the frontline of this new challenge
by the Ma administration are so upset.
In addition, Beijing will not overlook political considerations and such a
policy was unambiguously laid down at the CCP’s 18th National Congress.
It is not very difficult to imagine what will happen next.
If the KMT is successful in using the second extraordinary legislative session
later this month to push through the ratification of the service trade deal,
Taiwan will suffer a mortal blow to its economic sovereignty.
This is tantamount to surrendering to China. With no other choice, Taiwan is
left staring down a dead-end road. Whether the nation suffers death by a
thousand cuts or from a single blow is up to China.
This simple truth is clear to all Taiwanese, but not to Ma.
According to a Chinese saying: “The people will revolt when pushed too far by
officials,” and revolt may now be all that Taiwanese have left.
Translated by Perry Svensson
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