Editorial: Chinese towels make us itch
Friday, Mar 03, 2006,Page 8
Very little prodding is usually needed to get your average Taiwanese upset about the state of the economy. And considering the state of Taiwan’s economy, this pervasive financial dourness often seems to border on the obsessive. Economically speaking, things are not terrible — decent economic growth, low unemployment, good wages and reasonable prices — although they could, of course, be much better.
Part of this gloomy mentality hinges on the inevitable comparisons with the lumbering giant on the other side of the Taiwan Strait. Talk about economics in Taiwan, and it won’t be long before someone speaks about China’s rapidly growing GDP with a wishful reverence.
This doe-eyed adulation of the "China market" is not unique to Taiwan — or to history, for that matter. Pick up any financial newspaper — or peruse the correspondence of diplomats from the 1850s — and you’ll find florid enthusiasm about the economic promise of China gushing from virtually every page. History will be the judge as to whether this enthusiasm was misplaced.
And so it goes in Taiwan. As you hear about China’s wondrous economic might, one can’t help but think that GDP growth is merely a single component in a very complicated formula for economic success. So it is natural to want to point out that China still has a long way to go before most Chinese can afford to buy even the most basic computer.
Therein lies the problem with comparing the economies of China and Taiwan: The two have very little in common. The challenges facing China’s financial planners and government officials are not the same as those facing Taiwan.
But when Taiwanese complain that all the companies are moving to China, it is hard not to have a more sympathetic ear. When textile workers take to the streets in anger because they are losing out to cheap Chinese towels (of all things), it is hard not to share some of their resentment. But then one starts to wonder: Why would these people ever think that they could compete with Chinese textile makers? It simply doesn’t make any sense. Chinese labor costs a pittance compared to Taiwanese labor, even in Yunlin County.
It is with some bemusement that one regards the signs held by the protesting workers asking the government to save "jobless workers." After all, Taiwan’s unemployment rate was 3.8 percent in January — the lowest in years, and a figure most developed economies could only dream of attaining. But rather than simply writing off these textile workers as a bunch of protectionist spoil-sports, it is better to consider the real problem: the government’s inability to make proactive economic policies.
Every indication is that the government will deal with the "Towel Fight" in the same way it deals with every cross-strait trade issue: with a healthy dose of ineffectual protectionism. This doesn’t address the need to develop a strategy for the economic future. And there seems to be a real confusion about what the government wants Taiwan’s economy to be.
First it was to be "Taiwan, the silicon island," to compete with Silicon Valley. Then, it was to be "Taiwan, the regional financial hub," to compete with Singapore. Then it was to be "Taiwan, the regional transport hub" to compete with Hong Kong. Even Vice President Annette Lu (呂秀蓮) chipped in with her usual blend of shrewd politicking and devil-may-care madness — dubbing Taiwan a regional democracy hub, replete with "Hello Kitty diplomacy" (that’s "soft power" for the uninitiated).
So what is Taiwan to be? It will never be able to compete head-to-head with China in textiles, heavy industry or electronics manufacturing — or any other labor-intensive sector. Research and development, design, engineering — industries in the service sector are the obvious choice.
Towels are not.