TAIPEI - Thick on platitudes and thin on
substance, the two-day Conference on Sustaining
Taiwan's Economic Development concluded in Taipei
last Friday, with virtually no one in the local
business community happy with the outcome.
Publicly, representatives from the
corporate world played along with the process, but
privately they remained frustrated, even angry.
Phrases like "waste of time" were not uncommon on
the sidelines of a summit designed by the
scandal-plagued administration of President Chen
Shui-bian to craft a national consensus on
economic policy. Included on the list of
participants were nearly 200 representatives of
business, academia, government, political parties
and trade unions.
"We're not satisfied.
They [the conference and government] only
accepted a fraction of the
proposals we put forward, maybe 20%," said an
official from the island's Chinese National
Federation of Industries (CNFI), who spoke on
condition of anonymity. "It's like you ask $5 for
a product and all you're offered is $1. Who's
going to be happy with that?"
The
government has hailed the 515 policy proposals
that were unanimously accepted by representatives
as proof that the conference was a success, but
the bulk of these were little more than motherhood
statements. Proposals to reduce Taiwan's fiscal
debt, increase annual per capita gross domestic
product to US$30,000, keep the unemployment rate
under 4% and make Taiwan into a "green value-added
island" were hardly likely to find too many
dissenters.
The real "meat" of the
conference resided in proposals that were deemed
"other opinions" - a catch-all category for those
suggestions that attracted any opposition in
committee discussions or on the floor of the
meeting.
"The whole point of the
conference was to forge a consensus on some of
these harder issues, but unfortunately we did not
achieve much progress in this area," said David
Hong, president of the Taiwan Institute of
Economic Research and a conference participant.
"The other matters [on the agenda] were more
conceptual in nature, and therefore beyond the
understanding of many people, or just common sense
and therefore trivial."
The list of 166
"other opinions" included proposals to expand
direct cross-strait transportation links, lift the
blanket ban on Taiwanese banks establishing
subsidiaries in mainland China, scrap the Statute
for Upgrading Industries, reduce or eliminate the
tax on companies' undistributed earnings, and
raise the limit on mainland-bound investment -
currently set at 40% of a company's
Taiwan-invested net worth. Anything designed to
open Taiwan to the mainland market drew heated
debate, with the investment proposal probably the
most controversial of the entire event.
"The market was looking for some signs of
an opening on cross-strait economic relations.
Almost every large Taiwanese company is in China
now and China policy has become their single
biggest issue," said Wu Dong-yang, an analyst at
Taiwan International Securities Corp.
The
reason for business's obsession with
liberalization is simple enough. The current
policy regime, which emphasizes closure and sees
most economic interaction channeled through a
third country or region, costs a lot of time and
money.
"Direct links are crucial to the
large enterprises we represent," the CNFI official
said. "Small to medium-sized firms are a different
story, it really doesn't matter to them. But large
firms split their business between here and the
mainland, and it is highly inconvenient and
expensive to have to direct everything through,
say, Hong Kong or South Korea. It puts us at a
distinct disadvantage."
A recent estimate
by Taiwan's Mainland Affairs Council puts the
amount of Taiwanese investment in mainland China
at US$150 billion - about a quarter of all foreign
investment there. Indirect two-way trade between
the mainland and Taiwan was worth US$76 billion
last year, and has been increasing at an average
annual rate of 25% since the start of the decade.
At least some members of the Chen
administration understand the numbers and are
sympathetic to business's position. Premier Su
Tzeng-chang and Vice Premier Tsai Ying-wen were
instrumental in keeping company representatives
within the conference process when they threatened
to pull out three weeks ago. CNFI chairman Chen
Wu-hsiung was even calling for his members to
conduct street protests rather than attend.
But the pragmatism of Su and Tsai proved
only a partial counter to the ideological
commitment of the Taiwan Solidarity Union (TSU), a
junior partner in the so-called "pan-green"
coalition with the ruling Democratic Progressive
Party and a staunch advocate of Taiwanese
independence. TSU representatives walked out of
the final stages of the conference because the
premier included the proposal to raise the limit
on mainland-bound investment in the "other
opinions" list - the TSU wanted it wiped off the
agenda completely.
The day after the
conference, the TSU's "spiritual leader", former
president Lee Teng-hui, slammed the government for
selling out to the private sector.
"It's
laughable. In all my 12 years as president, I
never once held a conference that was so
pro-business," Lee said during a lecture at his
self-styled political academy, the Lee Teng-hui
School, on Saturday. "The government's choice to
abandon Taiwan's autonomous economic development
[in favor of closer links to the mainland] is a
serious mistake."
Bridging the gap between
Lee's fundamentalism and the needs of Taiwanese
business was never going to be easy. Sadly, last
week's conference might have proved once and for
all that it's impossible.
Craig
Meer is a freelance writer based in
Taipei.
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