Tsai Ing-wen: Ma and his policies alienate Taiwan from rest of the world

DPP Chairman Tsai Ing-wen tore into the Ma Ying-jeou administration in a lecture at National Taiwan University Tuesday. Tsai criticized Ma and his subordinates for focusing entirely too closely on things like cross-strait agreements in goods and services, to the detriment of efforts to achieve breakthroughs in signing bilateral free trade agreements (FTAs) with major trading partners and gaining entry to growing regional economic link-ups. Tsai said that as a result Taiwan is becoming overly dependent on the Chinese market even as the distance between the island and the rest of the world increases.

Tsai was speaking at NTU on "The Future of Taiwan," with reference to Taiwan's current economic development model and cross- strait economic and trade issues and how these problems are being addressed by the current administration.

Tsai pointed out that Taiwan's initial economic development model, launched in the 1960s, was an export-oriented economic model which brought growth and success to the island. During the past ten years, she said, the focus has been on developing the IC industry by "Handling orders in Taiwan and doing production overseas."

As a result, said Tsai, domestic employment has sagged, salaries are stagnant and income distribution is increasingly out of whack. At the same time, the economy is suffering as the international market goes through structural adjustments in supply and demand. Tsai admitted that she is worried that if Taiwan's economic continues in this direction in the future, things will only get worse.

Tsai also mentioned the "China factor", pointing out that mainland China is now the world's second-largest economy after the US and is attracting more and more inflows of investment and offering ever greater employment opportunities for Taiwanese in China. She noted that Taiwan's top industries and core technologies are increasingly expanding their ties and industrial cooperation with China, injecting a great deal of talent and technology and closing gaps that previously existed between China and Taiwan. In addition, a large number of Taiwan enterprises are feeling the impact of poaching of talent as well as misappropriation of technology and know-how. All of this is happening in the face of ongoing competition from Taiwan’s traditional rivals in the market such as Japan.

Tsai attacked the Ma administration's over-emphasis on cross-strait policy and blind moves to open up Taiwan’s markets. She said this approach has not only ignored the risks involved in such actions, it has also failed to improve the investment environment in Taiwan to any extent. In 2010 following the signing of ECFA, for example, there was a push for more free trade and accelerated cross-strait relations. This led to hastily-negotiated agreements on cross-strait trade in services and goods in which there was little or no assessment of their possible impact on employment and domestic industries such as the media and communications industries. The administration’s haphazard approach to negotiations was one of the key factors in the sudden rise of the Sunflowers student movement in March this year, noted Tsai.

Tsai pointed out that Taiwan is an island with a relatively open economy that is currently facing internal structural problems in its economy and increasing tough international competition. She noted that a balance between exports and domestic demand is needed as well as a balance between globalization and localization. At the same time there is a real need for innovation-oriented industries that will help to raise the employment rate, boost salaries and ensure the well-being of young and old as the nation seeks new models for economic growth.

Tsai referred to the DPP’s plan to hold a national conference on economic affairs, explaining that the party hopes to inspire dialogues and discussions among people in the community and industry to jointly look for new models for economic development that will be best suited to Taiwan’s needs. Tsai stressed that Taiwan must give full play to the strategic values and advantages of its many multi-cultural and democratic values. These values are real assets in regional and international affairs, and Taiwan needs to work together with other countries to maintain peace and stability in the region and fulfill its obligations as a responsible member of the international community.

In the area of cross-strait relations, Tsai emphasized that Taiwan must maintain its independence, but that does not mean there can be no cross-strait economic interaction or links. She stressed, however, that cross-strait relations must be carried on in the context of Taiwan’s statues in the regional economy. The latter of course includes movements like the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) as well as bilateral free trade agreements.

Tsai Ing-wen pointed out that former US Secretary of State Hillary Clinton was very direct when she warned Taiwan that giving up its economic autonomy will inevitably lead to the loss of its political autonomy. This is the biggest difference between the DPP and the Ma government, said Tsai: the DPP advocates a balanced and diversified trade strategy under which Taiwan will maintain its autonomy in both the economic and the political spheres. The DPP will not allow Taiwan’s democracy, freedom, and political autonomy to be hurt through external intervention.

In conclusion, Tsai pledged that the DPP will remain ready to face both sides of questions that have long kept the island’s political factions at odds with each other. She said the party will actively seek to resolve such disputes by looking at them from all angles, taking a firm and pragmatic stand while working to establish new modes of interaction and communication with the other side. Hopefully the result, she said, will be peaceful and stable development in cross-strait relations and better economic prospects for all people in Taiwan.