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View Count: 307 |  Publish Date: April 05, 2014
Taiwan's thaw with China turning to slush
TAIPEI, Taiwan—
— For decades, relations between Taiwan and its giant neighbor China have been one of the great success stories of the ending of the Cold War. Slowly but surely, the two nations have pulled back from half a century of bellicose confrontation and in recent years embraced a level of political and economic cooperation that seemed to promise new riches for both.
But today, for many Taiwanese, the bloom is off the rose. This disenchantment lay behind the outbreak of angry protests from Taiwanese students that are in their third week. And Taiwanese President Ma Ying-jeou is scrambling to placate a restive electorate.
Hundreds of students stormed Taiwans legislature March 18 and have occupied it since, draping signs denouncing a free-trade pact with Beijing and posting caricatures of Ma around a portrait of Sun Yat-sen, the founding father of the Republic of China, the official name of Taiwan. Others have tried to break into the cental government headquarters, clashing with police who repelled them with water cannons and batons.
No one questions the benefits of lifting the half-century long threat of military conflict. And almost everyone acknowledges that there are advantages to Mas policy of stepped-up cooperation. Today, 118 airline flights a day link Taiwan and 54 cities in China, many packed with Taiwanese businesspeople going one way and mainland tourists going the other. Seven years ago, there were no such flights.
But for Mas critics, the benefits have fallen far short of expectations. Although Chinas economy continues to grow briskly, Taiwans economy has stagnated; incomes have barely budged while housing costs have soared. More Chinese tourists come to Taiwan, but the massive new capital investment that had been expected from the rapprochement with Beijing has largely failed to materialize.
And, like the United States, Taiwan has seen thousands of good jobs move offshore, most of them to China. University graduates in particular complain that there arent enough decent jobs for them.
They are stealing our jobs, said Godwin Wang, an assistant vice president at Farglory Free Trade Zone Co., which provides air cargo and other services to importers and exporters. Farglorys warehouse space by the airport is half-full, he said days before the students took to the streets. We are suffocating.
Many Taiwanese also worry about becoming too dependent on China and ultimately losing their autonomy and freedom to rule themselves without interference from Beijing.
Clearly, China is not responsible for all of Taiwans economic problems. As a trade-dependent nation, it has been hurt by weak global demand since the Great Recession, including the slow recovery in the United States and other large markets.
Whats more, many experts say that Taiwan is hampered by structural weaknesses, such as excessive government regulation, one of the lowest birth rates anywhere and a pattern of developing small businesses instead of giant corporations without giving them enough help.
Taiwans economic position has also weakened in relation to some of its bigger, faster-growing neighbors, especially South Korea.
Like South Korea, Taiwan has always been one of the so-called Asian tiger economies. But in recent years, with the rise of global powerhouse companies such as Samsung and Hyundai, Koreas economy has been far more dynamic, leaving many Taiwanese to wonder where they have gone wrong.
Even Taiwans cultural minister, Lung Ying-tai, speaks wistfully about the wave of Korean dramas and music that has hit Taiwan and other parts of Asia.
The Korean model is very much talked about here, she told a group of visiting American journalists recently.
Nonetheless, many Taiwanese see China as the biggest, most immediate issue.
Lin Chu-Chia, deputy minister of Taiwans mainland affairs council, says there are 90,000 cases of Taiwanese investments in China. By comparison, he could count only 400 investments from the mainland into Taiwan, mostly restaurants, wholesalers and the like.
One of Taiwanese biggest companies, Foxconn Technology, which assembles Apple products, employs hundreds of thousands of workers in China.
Although Taiwanese companies include such names as bicycle maker Giant and computer producer Asus, the mainstay of the islands exports has been semiconductor chips and other brand-less parts that go into the production of other goods.
Increasingly, Chinese firms have been making these materials themselves instead of importing them from Taiwan, said Katrina Ell, an economist who follows Taiwan for Moodys Analytics from its Sydney, Australia, office.
The immediate target of the student protests was a services trade pact with Beijing, which many of the protesters say Mas government reached without proper oversight. They want it scrapped.
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Time: 1:21  |  News Code: 394735  |  Site: L. A. Times
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