tag:blogger.com,1999:blog-10698887.post1786112503917064919..comments2023-10-22T18:25:39.688+08:00Comments on The View from Taiwan: What Can Taiwan Really Learn from Korea.Michael Turtonhttp://www.blogger.com/profile/17974403961870976346noreply@blogger.comBlogger73125tag:blogger.com,1999:blog-10698887.post-73608319391532347462008-07-17T14:36:00.000+08:002008-07-17T14:36:00.000+08:00I have visited Korea many times although based in ...I have visited Korea many times although based in Taiwan and it's always been my impression Korea has raced ahead of Taiwan years ago.<BR/>The whole 'don't open up the rules to investment in China thoery' doesn't hold water. The money that was going out has already gone (200 billion by Mr.Turton's own figures). Anything that was going to go as pretty much moved over already, businessmen are much more efficient that governments you see in this regard. Now it's time to allow investments come back in from China and elsewhere and allow the flow both ways. It's simple really. Even if Taiwan opened all investment rules tomorrow in China I bet you would hardly see a factory closure here. The point is making it easier and move convenient and cheaper to do business in Taiwan, that is what you are missing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10698887.post-78823449181073985162008-01-04T05:56:00.000+08:002008-01-04T05:56:00.000+08:00At Mark:It's me again, yes, THAT anonymous.You're ...At Mark:<BR/><BR/>It's me again, yes, THAT anonymous.<BR/><BR/>You're making the same old mistake again, and again, and again.<BR/><BR/>I don't know if you expected anyone to click on those links you provided, but in any case I did. Nominal GDP, again, is important when considering <B>foreign investment</B>. If real GDP is equal (i.e. Taiwan and South Korea) but nominal GDP is higher in another country (i.e. inflation is higher--South Korea), then the country with higher inflation will be more attractive to foreign investment. The logic is simple--foreign investment doesn't plan to spend their money in country (i.e. will leave the country in a couple of years), so they don't need to worry about inflation. Your two links reflect that--nominal GDP is more important when you are trying to price investments.<BR/><BR/>Now since most citizens of Taiwan and South Korea do not act like transnational investment vehicles, they do not have an option of making their money in one country and spending it in another. Inflation is a problem for them!<BR/><BR/>My explanation for why Koreans are unhappy about their economy--while top level salaries have grown, many of those in the middle and lower classes are not in jobs whose salaries are keeping up with inflation. In other words, while in Taiwan you see certain segments whose salary has been stagnant, in Korea, you actually have people whose salary, because of 20% inflation over the last 4-5 years, has shrunk significantly!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10698887.post-17656448448878455992007-11-29T15:56:00.000+08:002007-11-29T15:56:00.000+08:00Hi Machael,Thanks for so supportive to Taiwanese.I...Hi Machael,<BR/>Thanks for so supportive to Taiwanese.<BR/>I did not finish all your discussions in the comment part. But here is what I found:<BR/>http://www.euccc.com.cn/events/details.php?id=818&PHPSESSID=442de2b94b180e93418d7b6adf13feb9<BR/>2007/8, ECCT blamed the disconnection across the strait, and I suppose it is reasonable that if European companies have branches in China and Taiwan, they would like to see more connection across the strait--for their own development.<BR/>Their strategy is to threat Taiwan to open the market by their amount of investment. When the economic growth is slowing down these years and the bad political situation, they hope their voice can be very loud that we will listen to them without questioning.<BR/>I will not blame them because human beings are selfish animals, and the news on Taipei Times did not mention Korea (http://www.taipeitimes.com/News/biz/archives/2007/11/06/2003386527), so I will not try to argue with them.<BR/>Finding our own problems and solving them, this is what we are going to do. They can make their claims, and that's their freedom.ifanhttps://www.blogger.com/profile/02962571191356484607noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-36207899473724971782007-11-25T01:57:00.000+08:002007-11-25T01:57:00.000+08:00http://www.taipeitimes.com/News/taiwan/archives/20...http://www.taipeitimes.com/News/taiwan/archives/2007/11/24/2003389308<BR/><BR/>Professor of Economics at NTU supports your view as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10698887.post-43068493176174766622007-11-21T13:18:00.000+08:002007-11-21T13:18:00.000+08:00Amazing banter on here. You guys are a lot smarte...Amazing banter on here. You guys are a lot smarter than me when it comes to the economic stuff. <BR/><BR/>I can add approx 2 cents from working inside a Taiwanese tech company here in Neihu. <BR/><BR/>The most intriguing questions are from those that suggest "adding value". As much as I hate such empty marketing terms, the concept is spot on.<BR/><BR/>The Taiwanese population is actually quite adept at adjusting to new concepts and adding value.<BR/><BR/>The shift away from the OEM model is exactly why Korea is doing well. (Samsung is kicking ass in consumer electronics.) <BR/><BR/>Taiwan faces different challenges because they have developed differently than Korea. The <I>chaebols</I> have had big money support for a lot longer; this translates into visible brands around the world. <BR/><BR/>I think we can all agree that Taiwan is still trying to emerge from family-owned business model. <BR/><BR/>Perhaps the best way to compete is with niche products? Do them well, brand them, and then ship them overseas. <BR/><BR/>It's not OEM because the creation happens over here. <BR/><BR/><A HREF="http://www.businessweek.com/globalbiz/content/nov2007/gb20071115_332423.htm?chan=rss_topStories_ssi_5" REL="nofollow">Tainan Company in Businessweek.</A>dildofuchttps://www.blogger.com/profile/12243179365504698371noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-11188994895724996392007-11-20T13:22:00.000+08:002007-11-20T13:22:00.000+08:00The European Chamber of Commerce knows what they'r...<B>The European Chamber of Commerce knows what they're talking about. </B> <BR/><BR/>Mark, the ECCT also knows where the priorities of its members lies. Morris Chang also knows a few things about Taiwan's economy and takes some very different views: <BR/><BR/>http://taiwanmatters.blogspot.com/2007/11/morris-chang-taiwanese-economy-in.html<BR/><BR/><B>The point you missed in your focus on the amount of Taiwanese investment on the mainland is that most of it is either indirect or illegal. Every time a Taiwanese business deals with China under these conditions, they have to work through an intermediary in Hong Kong, Macau or elsewhere </B><BR/><BR/>Usually that intermediary is in the Cayman Islands or BVI. Taiwanese investment consultants are experts at setting these vehicles up. The transaction costs aren't that high. Sure, direct links would cut many costs, but innovation, not cost cutting is how Taiwanese companies should be making their money.<BR/><BR/>Like Michael T., I'm also not opposed to opening up direct links with China per se. I just don't see how it addresses the real problems Taiwan's economy has, and I also fail to see how either party will achieve a breakthrough on this issue when China will not talk to anyone who does not recognize China's <A = HTTP://WWW.CHINA-EMBASSY.ORG/ENG/SGXX/SGGG/SGGYTH/T34778.HTM>One China Principle</A>:<BR/><BR/><I>As American poet Walt Whitman once wrote, "as soon as histories are properly told, there is no more need of romances." It is obvious that despite the vicissitudes in the history of Taiwan, the fact that Taiwan belongs to China has never changed. Likewise, no matter how the leaders and the ruling party in Taiwan change, it is only a transfer of power of a local authority in Chinese territory, representing no change at all to China's sovereignty over Taiwan. Although Taiwan has yet been reunified with the motherland, the sovereignty and territorial integrity of China have never been divided. Taiwan's status as part of China's territory has never been changed. It is widely-held in international community today that there is <B>but one China in the world, the government of the People's Republic of China is the sole legal government of China representing the whole of China, with Taiwan being a part of it.</B></I>Michael Faheyhttps://www.blogger.com/profile/11057491107522344042noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-72739119061271604272007-11-20T09:40:00.000+08:002007-11-20T09:40:00.000+08:00Mark, you're right, I misread what you said about ...Mark, you're right, I misread what you said about bacteria and money.<BR/><BR/>MichaelMichael Turtonhttps://www.blogger.com/profile/17974403961870976346noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-39684900084398412952007-11-20T02:01:00.000+08:002007-11-20T02:01:00.000+08:00Michael, this is from the page you linked to:"Desp...Michael, this is from the page you linked to:<BR/><BR/><B>"Despite a lack of direct air and sea links between China and Taiwan, and significant restrictions on who can travel to Taiwan from China, the flow of human resources in the other direction is set to increase after a series of incremental liberalizations and policy shifts by the Taiwanese government."</B>Markhttps://www.blogger.com/profile/09652288045145591799noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-85938725732226777602007-11-19T23:34:00.000+08:002007-11-19T23:34:00.000+08:00Hello again,Just thought this extract from a June ...Hello again,<BR/><BR/>Just thought this extract from a June WSJ (kindly brought to my attention by Michael at the time) makes apt re-reading.<BR/><BR/><BR/>"Now, at least, the central bank is inching closer to the true reason for the Taiwan dollar’s softness — investment outflows. Net outflows hit nearly $11 billion for the first quarter of this year. Taiwan’s net investment flows haven’t been in the black since the second quarter of 2005. Even in a region awash with liquidity and in the midst of a global bull market, investors just don’t want to put their money in Taiwan.<BR/><BR/>"Structural factors are to blame. One culprit, ironically enough, is the restriction on corporate investment in the mainland. Taiwanese companies are allowed to invest only an average of 40% of their value (the limit varies by industry) there. But because such investment is so lucrative, Taiwanese companies and entrepreneurs are increasingly opting to work around the law. They can do this by setting up shop in less restrictive countries, leaving Taiwanese investors with fewer companies at home in which to put their money.<BR/><BR/>"On a related note, Taiwanese economic policy hasn’t kept up with the times. There is still a strong regulatory and policy bias in favor of manufacturing over services, despite the fact that Taiwan is at the stage of development where it should be expanding its service sector. Spaghetti-like corporate structures and endemic insider trading also discourage investors from diving too deeply into Taiwanese equities. Bad policies and their outcomes — from a chaotic banking sector to hurdles for companies that want to on-shore research and development while offshoring manufacturing — leave many Taiwanese companies and their stocks underperforming.<BR/><BR/>"To top it all off, there’s political gridlock when it comes to addressing many of these problems. Fighting between the two main political parties has kept the focus off improving the economic climate. It’s hard to think of any major economic policy overhaul in the past seven years.<BR/><BR/>"In imposing limits on offshore investment, the central bank is asking Taiwanese investors to take one for the team by keeping more of their money at home despite the poor returns. But the bank is missing the point. The weak exchange rate is a symptom — not the disease — and capital controls will only make it worse..https://www.blogger.com/profile/00149149710618430861noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-80875191304166997792007-11-19T22:49:00.000+08:002007-11-19T22:49:00.000+08:00"Mark, I've already posted to your blog about why ...<B>"Mark, I've already posted to your blog about why your GDP calculations are totally wrong. Nominal GDP cannot be used to calculate economic growth, and bacterial growth formulas cannot be used either, because economies do not grow like bacteria do, and because the unit of measurement of bacteria is not subject to inflation like money is. Hence your understanding of Taiwan's growth situation is totally wrong."</B><BR/><BR/>Michael it wasn't a "bacterial growth" formula. The mathematical formula to calculate the average percentage growth of <I>anything</I> over <I>any</I> unit of time is:<BR/><BR/>growth rate = [(final value/initial value)^(1/units of time passed)]-1<BR/><BR/>And that growth formula is indeed used for countless monetary calculations, including those made by fund managers (for whom inflation <I>is</I> a concern). If you want to argue that calculating nominal GDP growth is a bad idea because it doesn't take inflation into account and overstates real growth, I might agree. If you say that it's a bad idea because it doesn't keep track of currency fluctuations, that's debatable, but also fair.<BR/><BR/><A HREF="http://www.glocom.org/opinions/essays/20070709_harada_solution/index.html" REL="nofollow">Calculations of</A> <A HREF="http://www.gold-eagle.com/editorials_05/mauldin112706.html" REL="nofollow">nominal GDP growth are done</A>, though, and as far as I know, I calculated this one correctly.Markhttps://www.blogger.com/profile/09652288045145591799noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-30249701541066122742007-11-19T21:33:00.000+08:002007-11-19T21:33:00.000+08:00Vin's comments were awesome -- many thanks. Feiren...Vin's comments were awesome -- many thanks. <BR/><BR/>Feiren asked me to provide this information on Chinese professionals ability to live in Taiwan.<BR/><BR/><A HREF="http://www.winklerpartners.com/a/features/chinese-professionals-in-taiwa.php" REL="nofollow">Chinese Professionals, rules, demand</A><BR/><BR/>The gov't would love to have Chinese professionals come over. But few make the trek, and that is not due to gov't restrictions. <BR/><BR/>MichaelMichael Turtonhttps://www.blogger.com/profile/17974403961870976346noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-40043397084697972552007-11-19T20:37:00.000+08:002007-11-19T20:37:00.000+08:00Finally, while Korea is also horribly protectionis...<B>Finally, while Korea is also horribly protectionist about labor, they are at least taking advantage of some of the crop of extremely talented Chinese engineers who want to work in their tech industry. I think most Chinese could adapt to Taiwanese working conditions just as easily as Korean ones, and once again, the common language would be a big plus.</B> <BR/><BR/>You seem to be suggesting that Chinese tech talent can't come to Taiwan. That is incorrect. If you skip down to the Technology Professionals section of this article, you will find that not only can Chinese engineers come to Taiwan, they can come for up to six years!<BR/><BR/>And I happen to know, having been told so by officials at the Investment Commission (who are in charge of these matters), that they are eager for Chinese business and tech professionals to come to Taiwan. So far though, very few of the latter have been sponsored by Taiwanese companies to come here.<BR/><BR/>Again, the reason they are in Korea is because the Koreans are investing in China <I>and Korea</I>. Taiwan meanwhile is investing only in China. That's the problem.Michael Faheyhttps://www.blogger.com/profile/11057491107522344042noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-59467119422997903082007-11-19T20:17:00.000+08:002007-11-19T20:17:00.000+08:00Red A, we're advocating smart public policy, not "...Red A, we're advocating smart public policy, not "protectionism." Believe it or not, industrial policy exists in more categories than "open" or "protectionist." The real division is between "smart" and "stupid." Here we are on our eighth naptha cracker and more steel mills, which can only exist under massive subsidies, while we send our tech industries to China. Meanwhile Korea kept its tech at home. As Mark points out, it has those smart Chinese engineers working in Korea, where they build Korean industry.....<BR/><BR/>Why would smart Chinese researchers and engineers want to come here, Mark? This exact question was posed at a Shannon meet up to an expert who studies Taiwanese firms in China. What do you think the answer is? <BR/><BR/>Mark, I've already posted to your blog about why your GDP calculations are totally wrong. Nominal GDP cannot be used to calculate economic growth, and bacterial growth formulas cannot be used either, because economies do not grow like bacteria do, and because the unit of measurement of bacteria is not subject to inflation like money is. Hence your understanding of Taiwan's growth situation is totally wrong.<BR/><BR/>MichaelMichael Turtonhttps://www.blogger.com/profile/17974403961870976346noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-69600121778287319232007-11-19T17:41:00.000+08:002007-11-19T17:41:00.000+08:00Creating some kind of economic Fortress Formosa wi...Creating some kind of economic Fortress Formosa will end up hurting Taiwan, as the domestic industries protected from China will end up making Taiwan less competitive overall. Its also anti-consumer.Red Ahttps://www.blogger.com/profile/10699964464336470134noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-25409724192926512262007-11-19T06:42:00.000+08:002007-11-19T06:42:00.000+08:00I've mistakenly referred to my calculations as "re...I've mistakenly referred to my calculations as "real GDP" growth a couple of times, when I should have been saying "nominal GDP" growth.<BR/><BR/>I have invested in a school here, as well as a software company and a semiconductor company (which does its business in China). I also have personal acquaintances who are involved in relatively large international companies that do business in China and they have both put the costs of dealing with various restrictions imposed by Taiwan at over 5% of their top lines. Needless to say, in some industries with lower margins, that can mean the difference between success and losing to a Korean or local Chinese company. I can't really get into any details over the internet, but I believe the competitive disadvantage has had very real effects on very large portions of Taiwan's tech industry.<BR/><BR/>Beyond the pain in the tech industry, these regulations make it harder to attract foreign investment. When HK went back to China, there was a real opportunity for Taiwan to become HK's replacement as an Asia hub. I know more than one expat in Shanghai who would prefer the living conditions here, but with no direct flight or investment, Taiwan's out.<BR/><BR/>Finally, while Korea is also horribly protectionist about labor, they are at least taking advantage of <I>some</I> of the crop of extremely talented Chinese engineers who want to work in their tech industry. I think most Chinese could adapt to Taiwanese working conditions just as easily as Korean ones, and once again, the common language would be a big plus.<BR/><BR/>Finally, the reason so many people compare Taiwan with Korea is that they have similar histories and economies. Both are young democracies, both are filled with families broken by the after effects of WWII, both were Asian tigers in the 80's, and both have export-driven, technology-driven economies. They do have their differences, of course, but Korea's the fairest measuring stick Taiwan has.<BR/><BR/>All of what I've written here is based on my genuine beliefs about what would serve the utilitarian good of the middle class, not just foreigners such as myself. I'm also not exactly a lone voice in suggesting that we'd be better off with the three links.Markhttps://www.blogger.com/profile/09652288045145591799noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-40283026100482919872007-11-18T14:41:00.000+08:002007-11-18T14:41:00.000+08:00But I realize it was foolish of me, Mark, to quest...But I realize it was foolish of me, Mark, to question why you focus on exchange rates. It's always a reasonable focus.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10698887.post-30101942373414473722007-11-17T21:58:00.000+08:002007-11-17T21:58:00.000+08:00Tsk, tsk, Mark: An ad hominem insinuation about my...Tsk, tsk, Mark: An ad hominem insinuation about my reading habits; then an in-effect straw-man argument that connects my questioning your focus on direct links with the fact that a lot of people focus on direct links; and then the argumentum ad numerum to “beat” me on the straw-man position your distortion slotted me into. What good purpose does using fallacies serve?<BR/><BR/>I don’t wonder why any of the folks you listed focus on direct links; I asked why YOU focus on this GNP issue rather than on the GDP issues of local job creation and education-system reform – issues paramount to the workforce and to spending here. You have written several times that you’re heavily invested here; does that mean a business related to English education? If it does – and especially if your business is related to kids – how can focusing on GNP take precedence for you over focusing on GDP? I’m hearing more and more of my young adult students say that if they get married, they don’t plan to have kids, both because of their own limited career prospects and because of wage stagnation. Won’t that negatively impact your business in the not-very-distant future?<BR/><BR/>Maybe the impetus for my question is misguided; I seem to recall being told you have a school here; if that’s not so, then, yes, it’s a little odd that I singled you out for this question. And in that case, sorry for the singling-out.<BR/><BR/>Still, given that I already directly asked the question(s), and given that you do say repeatedly that you care about the economy, why didn’t you suggest how direct links will counter the above-listed problems? Would direct links attract enough direct foreign investment here to employ enough of Taiwan’s engineering talent locally -- plus employ enough local support staff -- so that the local economy would be revitalized? I tend to doubt it, but I’m very open to persuasion on this if you have good arguments to make.<BR/><BR/>The Hsieh-Chen stuff is interesting. Michael labeled it political theatre in a November 14th post. I added a comment about that – in the wrong place; instead of properly putting it under “Business Leader Calls for Peace Law,” I placed it under “Simon Tisdale Scores! And Me Too” (also November 14th). What I wrote is only conjecture, but I have a hard time taking this “rift” at face value. Maybe it’s real, maybe it’s DPP electioneering at its finest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10698887.post-36078372628763742132007-11-17T02:36:00.000+08:002007-11-17T02:36:00.000+08:00Vin, maybe you should be asking yourself why the U...Vin, maybe you should be asking yourself why the US and EU chambers of commerce, scores of independent economists and ordinary Taiwanese residents, and politicians on both sides are talking about cross-straight barriers. I don't know if you keep up with the local news much, but Hsieh just ripped Chen a new one over this:<BR/><BR/><B>"How can you say you love Taiwan when you are stripping us of our competitiveness?” (Hsieh) said (to Chen) on Monday.<BR/><BR/>"Intel has gone to China already, and we're still here congratulating ourselves over how well we're keeping our tech secrets from China," he said, "saying that we'll only open up third or fourth line products to China because we don't want the Chinese to know about the rest."</B><BR/><A HREF="http://www.udn.com/2007/11/13/NEWS/NATIONAL/NATS6/4094452.shtml" REL="nofollow">謝長廷嗆扁:再管下去 台灣一無所有</A>Markhttps://www.blogger.com/profile/09652288045145591799noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-77135410095218033402007-11-15T17:26:00.000+08:002007-11-15T17:26:00.000+08:00Sorry this is so long…Thank you, Michael, for the ...Sorry this is so long…<BR/>Thank you, Michael, for the great post and especially for your informative replies to comments here. Arguably, even economists aren’t experts in their field; what you’ve contributed here sure goes beyond what I knew and I bet goes beyond what most other readers knew. <BR/><BR/>After reading all of these comments twice, it sure looks to me, Ben, like Michael did address your key point – and very persuasively, too. Taiwan Echo pointed out a key contradiction in your reasoning/analysis, as well. Korea seems to act more than most countries on the presumption that its economic circumstances are highly particular – and that it thus couldn’t possibly benefit from the use of a single doctrine such as yours -- and that no part of an overall, long-term economic policy can be usefully analyzed separate from other parts, (which, as Michael pointed out, should include education-system policy).<BR/><BR/>And both you and Mark consistently ignore that Korea is far more protectionist overall than Taiwan is. You’re trying to hammer Taiwan for being protectionist in the single overt way Korea is not, when the truth is Korea has no need to be overtly protectionist on this single aspect of policy given that the overall nature of its policy is so highly protectionist and incentive-laden that it will automatically constrain investment in China.<BR/><BR/>But this is far from all: This thread contains SO MANY cases of what seems to be an almost-willful failure to process and understand key points. Ben’s and Mark’s comments in reply to Feiren’s post is another example. Maybe Feiren could have been clearer, but I certainly did not construe his (?) post to mean language similarity bestows zero advantage in China for Taiwanese vis-à-vis Koreans. The gist I got – without my brain being taxed whatsoever – is that this advantage is small compared to what uninitiated Taiwanese and the rest of us imagine it to be; that Taiwanese businesspeople face huge struggles in China, the same as investors of other nationalities do – which language similarity does little or nothing to ameliorate; and that Taiwanese’ REAL, very significant advantage is that they have “a great deal of experience in doing business in a fast-developing economy based on low cost manufacturing” – unlike business people of any other nationality. And Feiren’s other gist seems to be that all the talk about language similarity serves to obscure that “the problem for Taiwan though is that they are seeking to repeat Taiwan past in China instead of creating Taiwan's future here in Taiwan.”<BR/><BR/>This latter point hits on exactly what you don’t want Taiwanese to do in Taiwan, Ben. I agree with you there; I want Taiwanese to upgrade themselves in value-creation ability, too. But what about the thinning of social capital Michael referred to? I’m completely for removing the investment cap if you have a viable answer there. What coordinated policy approach do you advocate for building social capital and enhancing value-creation capacity here? Taiwan is not the US; this is not a post-Enlightenment society. Do you really think the implications of that difference aren’t huge? Maybe you do, and I’m open to persuasion on this point: maybe an economic policy that leaves Taiwanese workers free to sink or swim -- in other words, no coordinated overall policy – WOULD be good for Taiwan’s GDP in the long run. But as Michael said, you offer nothing concrete for addressing this issue.<BR/><BR/>What really, Ben and Mark, is the point of focusing so much on cross-strait economic policy in the first place? Sure, direct flights would help GNP (in the short run, anyway). But how would it help GDP? Chinese tourists, sure, but will that really be enough of a boost to substantially increase Taiwan’s GDP both short-term and later? You say you’re heavily invested in Taiwan, Mark, and that you care about its future. Then why not really focus on issues related to job-creation here and education system-change here – the things that could help and improve the workforce, and thus really boost GDP? Why focus on the side issue of boosting GNP by helping Taishang save transportation money? Yes, direct flights will help attract more Western investment – if the workforce is up to the mark. But with even Taiwanese bosses now saying the workforce here is no longer up to the mark, will that many Western investors really choose to put their money in Taiwan?<BR/><BR/>And for godsakes, why focus on currency arguments?<BR/><BR/>And why talk about Taiwan as if it alone features wage-stagnation and a growing income gap when most countries in the developed world have these problems? It comes off as benighted, exaggerated doom-saying. If the future brings economic doom, poor workforce capability will be the reason why, not these symptoms.<BR/><BR/>Most of all, why buy into comparisons between Korea’s and Taiwan’s economies in the first place? It’s the Singapore state-control model, not Korea’s, the blues love. Talking about THAT though would expose the blues anti-democratic nature. And, like the greens, the blues seem incapable of effective planning for a developed economy, so in trying to make hay by comparing Taiwan to Singapore, they would likely just embarrass themselves.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-10698887.post-38158546500718276272007-11-15T15:24:00.000+08:002007-11-15T15:24:00.000+08:00......as long as it is watched. Government control.........as long as it is watched. Government controlled investment funds piling in billions would be a rather unsettling threat. But what about private companies with visible shareholders meeting western standards of governance?.https://www.blogger.com/profile/00149149710618430861noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-44113565280554771912007-11-15T15:04:00.000+08:002007-11-15T15:04:00.000+08:00I’ve read the claim of Taiwanese businesses perfor...I’ve read the claim of Taiwanese businesses performing better before and was reminded of it by what Michael wrote in an earlier comment: “In fact, as observers are wont to point out, Taiwanese firms do better in China than other companies (they also have access to investment incentives other countries don't)”<BR/><BR/>Nearly all Taiwanese companies substantially invested in China are not wholesale moving there for the same reason Chinese companies would find Taiwan a very attractive place to invest. Much more secure patent protection, a more educated and productive work force that is more western oriented, better general infrastructure, less endemic corruption, etc. These are also true of Korea but, feiren, whether it is genuinely more profitable for Taiwanese than other nationalities to be in China – as previous things I’ve read and Michael suggest – or indeed, if it is just time and effort as you say, the fact is that Taiwanese put in the time, effort and money in huge amounts. And Chinese would, I think, do the same here - but not in Korea on anything like the same scale. What follow are all flawed, qualitative analogies: Compare American investment in Britain and (especially) Ireland with that in France. Or American investment in Canada and Mexico. Or French investment in the French and Dutch speaking parts of Belgium. Or German investment in Austria and Italy. Or recent Spanish and British investment in South America. And vice versa to all. How much foreign investment is there in Japan?<BR/><BR/>I’m readily agreeing with Michael that one of the (many intertwining) reasons Taiwan falls (only slightly) behind is because of a lack of private investment (meaning amongst other things a lower value currency and a delayed shift upmarket).Where I think we disagree is in the solution. I think that it is more efficient for Taiwanese companies to search for growth by shifting various low value sectors to China and encourage foreign investors to benefit from what Taiwan can offer. Taiwan can offer all (not just the potentially very large number of Chinese) investors significantly more if it is more open to China. This is not true on the same scale for Korea because the two countries don’t have the same established interconnectedness. <BR/><BR/>Am I being naïve about the potential security threat of Chinese investment here? I really don’t think it’s a significant issue..https://www.blogger.com/profile/00149149710618430861noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-70656285647448752212007-11-15T14:39:00.000+08:002007-11-15T14:39:00.000+08:00Damn it, I dislike re-reading acid language of my ...Damn it, I dislike re-reading acid language of my own conception. It distracts from the message, blunts the purpose and lingers. The unpleasant, lamentable low road..https://www.blogger.com/profile/00149149710618430861noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-62341092067641761702007-11-14T23:41:00.000+08:002007-11-14T23:41:00.000+08:00As in Taiwan, business on the mainland is already ...As in Taiwan, business on the mainland is already dominated by mandarin and it's only strengthening its position. Taiwanese people have the advantage of literacy in Chinese, too. Finally, consider the issue of family ties. Not every one has them of course, but quite a few Taiwanese people still have mainland relatives. <BR/><BR/>Considering all the Taiwanese regulations they've been crippled by, I think the taishang have been doing reasonably well in China.<BR/><BR/>Michael, I've assembled some <A HREF="http://toshuo.com/2007/the-fall-of-the-taiwan-dollar/" REL="nofollow">currency charts showing the long-term fall of the Taiwan Dollar</A> since 2000.Markhttps://www.blogger.com/profile/09652288045145591799noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-58866912945734882172007-11-14T11:35:00.000+08:002007-11-14T11:35:00.000+08:00Ben, there are no figures to back up your claim th...Ben, there are no figures to back up your claim that Taiwanese businessmen are doing better than other nationalities. Anecdotal evidence shows that many have lost money and that others, after years of being in China, are doing well. My point is that years of experience in doing business in China are beginning to pay off, not language or cultural factors.<BR/><BR/>Mark, Taiwanese businesspeople do of course speak Mandarin. But the idea that the Taiwanese have some special insight into how China works is very deceptive. My main point here is that they probably do not speak Shanghainese. The same pattern repeats itself across China. The Taiwanese are outsiders who do not speak the insiders language. It's a bit like being European but being from Portugal and trying to do business in France. Or being Chinese and trying to do business in Taiwan.Michael Faheyhttps://www.blogger.com/profile/11057491107522344042noreply@blogger.comtag:blogger.com,1999:blog-10698887.post-27087472569784526052007-11-14T03:32:00.000+08:002007-11-14T03:32:00.000+08:00Hi ben,You said:If something can be done cheaper i...Hi ben,<BR/><BR/>You said:<BR/><BR/><B>If something can be done cheaper in China, that is where is should be done.</B><BR/>...<BR/><B>This means that they (Taiwanese) can make far more money than anyone else can by investing in China.</B><BR/><BR/>and argued that's why Taiwanese don't want to invest their money in Taiwan. <BR/><BR/>But at the same time you also argue that Chinese would see Taiwan as a place worth investing:<BR/><BR/><B>Now that Chinese investors exist, am I supposed to believe that they would not see the same competitive advantage in Taiwan?</B><BR/><BR/>Can you explain to me why Chinese businessmen would see Taiwan as a place where they would pour money in, when most Taiwanese businessmen think their only survival chance is to invest in China ???? To me who know nothing about the economic, this seems to be a bizzard twist of logic.<BR/><BR/><B><BR/>The concrete benefits are, I suppose, obvious. But are they really at all significant in comparison to what is lost? <I>I don't know for certain</I> but I really don’t think so.</B> <BR/>...<BR/><B>Taiwanese businesses <I>apparently</I> do better than any other nationalities' do in China.</B><BR/><BR/>If Taiwanese already are doing better than any other nationalities, including Korean, it would mean that Korean can achieve competitity without investing as heavily in China as Taiwan did.<BR/><BR/>As such, your above statements sounds like a support to the idea that Taiwan's over investment in China causes Taiwan to fall behind, which, based on what I understand from your comments here, doesn't seem to be your position. <BR/><BR/>Am I reading something wrong here?Taiwan Echohttps://www.blogger.com/profile/17018124148446093746noreply@blogger.com