Don’t believe the KMT, Taiwan’s economy is booming

The KMT consistently claims we need closer ties with China to save the economy. The truth is very different.

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(Image from Unsplash)

(Image from Unsplash)

KAOHSIUNG (Taiwan News) — Taiwan’s presidential election is now a matter of days away, and both camps are turning up the rhetoric to 11 in an attempt to get their core messages across to voters.

Much of the focus of this campaign has been on the issue of cross-strait relations, and candidate personalities have also been a fierce battleground. But the other issue which has been key, as it is in every election, is the economy.

If you follow KMT-supporting mainstream media or have somehow managed to get yourself sucked into the Han Kuo-yu (韓國瑜) social media bubble, where fake news from China takes precedent over verifiable facts, you are likely to be of the view that Taiwan’s economy is really struggling.

The message being spread on pro-Han message boards is that Tsai Ing-wen’s (蔡英文) economic policies are failing and her refusal to engage with the Chinese Communist Party (CCP) is damaging national prosperity and costing the people of Taiwan money.

The Han campaign said as much themselves only last month. "The economic policy of Tsai's government has made Taiwan an orphan of the global economy. The government is pretending the crisis does not exist," claimed campaign member Wang Chiang-qiu (王淺秋).

But let’s be clear. There is no pretending going on here. There simply is no economic crisis in Taiwan. Quite the opposite.

Taiwan’s robust economy

During Tsai’s first term of office, Taiwan’s economy has flourished, and the policies she has put in place look set to lay the groundwork for even greater economic success in the coming years.

But don’t just take my word for that. There are countless independent sources that back up this assessment.

Take the fact that Taiwan’s economic growth in the third quarter of 2019 was up by 2.91 percent, far higher than the 2.67 percent predicted. With this level of growth, Taiwan continues to be the best performing of the so-called Asian Tiger nations, with faster growth rates than Hong Kong, Singapore, and South Korea.

The figures are so impressive that the country’s Central Bank continues to advise against cutting interest rates, a sure-fire sign of confidence in the economy.

The Asian Development Bank (ADB) agrees. They have labeled Taiwan the biggest beneficiary of the U.S.-China trade war and have predicted that economic growth will continue at a similar rate in 2020.

This growth is expected to be spurred by a continuation of businesses and workers returning to Taiwan from Communist China. They are attracted not so much by political freedoms as by the strong economic outlook at a time when China’s economy is slowing rapidly and its regime is reacting accordingly.

The ADB's predictions already appear to be coming true when we look at foreign direct investment into Taiwan. Despite the CCP slowing or stopping much of the economic activity between Taiwan and China, foreign investment into Taiwan grew by an enormous 9.4 percent in the first three quarters of 2019.

The figure now stands at around US$8 billion. A third of this has gone into the electronics sector, which is still a major part of Taiwan’s economy. But the other two-thirds have gone into a diverse range of business sectors.

Export numbers have also been robust. While there has been a 6.7 percent drop in exports to China and Hong Kong, there was an impressive increase of 17.7 percent in exports to the USA over the first three quarters of the year.

Taiwan is still more dependent on exports and therefore more vulnerable to international trade fluctuations than other regional economies. But economic policies, including the much-vaunted Southbound Policy, are helping to correct this already.

Other positive indicators

Another success story can be found in tourism numbers. The CCP has sought to heavily restrict Chinese tourism to Taiwan in an attempt to punish Tsai for her refusal to negotiate on their terms.

However, despite a considerable drop in tourism from China, overall tourism numbers have continued to grow. More than 11.1 million tourists visited Taiwan in 2018, and last year that number was predicted to rise to 11.8 million.

Business leaders in Taiwan are also in agreement about the impressive state of the economy. Only this week the Central News Agency quoted a group of senior business people as saying that they expect the country’s positive economic growth to continue in 2020.

They accompanied this assessment with some eminently sensible suggestions, such as making greater efforts to join new international trading partnerships, greater support for small- and medium-sized businesses, and moves to make Taiwan a financial center to compete with Hong Kong.

These are all good suggestions, but ones that would only be put forward if the economy was already in a healthy state.

Why are people falling for KMT lies about the economy?

Just about every expert not in thrall to the CCP agrees that the Taiwanese economy is in an extremely healthy state and that the future looks bright. So, why do so many people in Taiwan not believe this is the case?

Some of the responsibility for this lies with the country's partisan media. Pro-KMT and China-friendly media outlets will never report positive economic news because it doesn’t fit their agenda. As a result, those who depend on these outlets for their news just believe what they are told.

Some of the responsibility lies with Tsai and her team, who have not always been effective at getting these positive economic messages out there. There is a lot of good news to be told about Taiwan’s economy, but finding someone who knows about it can be a tough job.

There is also the fact that while the macro-economic outlook is extremely positive, for the ordinary voter who works a regular job and takes home a regular salary, little has changed in the past few years. Cost of living is still an issue, buying a house is out of the question for many people, and wages have remained broadly stagnant.

The economic progress that Taiwan has made on paper has not yet filtered down to ordinary workers, and this is something that Tsai absolutely needs to prioritize should she win a second term in office.

Being able to show economic progress on paper will win you some voters, but being able to deliver real economic advantages to the people will win election after election.