Financial Times: As China grows, Taiwan fades.....

Financial Times toes the KMT line on Taiwan:

Chen Ming-sheng looks tired. After 15 years, he is closing his small car parts business in Taipei. “It's not worth it any more. The only ones making money are IT exporters,” he says. “The government is just not dedicated to making business flourish.” With more than 3 per cent growth expected this year, Taiwan's economy is not exactly in crisis. But having boasted one of the fastest growth rates in Asia in the 1980s and 1990s, it now trails the rest of the region a trend many blame on the government's failure to implement essential reforms.

Critics say economic progress has been held up by controversial political campaigns undertaken by President Chen Shui-bian to consolidate Taiwan's de facto independence.

Sure. It's Chen's fault that the economy declined all through the 1990s. We note that the sources here are pro-KMT:

Such restrictions discourage Taiwan companies active in China from investing at home, says Liu Meng-chun, an economist at the Chunghwa Institution of Economic Research. According to CIER, only 11 per cent of profitable Taiwanese businesses in China remit profits back to the island.

Who owns the CIER? A recently deceased KMT stalwart named Koo. Here is who the long arm of the KMT continues to control the discourse about Taiwan. Chunghwa is anti-Chen and cannot be relied upon for commentary in this area. A further point, which the paper fails to note, is that China makes it difficult for Taiwanese to remit money to Taiwan.

Taiwanese enjoy few economic benefits from the corporate successes next door. Domestic investment has shrunk to 16 per cent of GDP from more than 20 per cent in the 1990s. Unemployment, at 1.51 per cent in 1991, is now above 4 per cent.

Taiwan's unemployment has been at this level for years. Note that the comparison has to go all the way back to 1991, the last year of the bubble economy, to find a comparison. In fact unemployment has been at 4% for the last five years, more or less, since the problems at the end of the 1990s under the KMT government. This 2001 article in the Asian Economic News correctly attributes the problem to the rise of China. One should also add that government statistics in Taiwan, especially during the KMT period, were not exactly the boca del verita. This investment site has some comparative unemployed rates. It is easy to see that unemployment increased steadily throughout the 1990s as businesses shifted to China, something KMT did little about. Chen inherited this situation; he did not create it.

But the economic pain is not yet enough to force the government to change. With local elections in December, the ruling Democratic Progressive party is moving into campaign mode again. “Politics always comes first,” says Mr Chen, the spare parts entrepreneur. “I don't have much hope they will have time for the economy.

"Economic pain is not enough to force the government to change." The FT has definitely been listening to the KMT on this one....I remember when we had all that rain last year and the mainlanders were blaming Chen for the bad weather, since of course his name means "water" in Chinese.

Rebuilding competitiveness is a long-term project and one that the DPP government has attempted to work towards -- consider the move to upgrade the nation's universities. Other moves include diversifying into tourism -- a move not made by the KMT during its 50 years of rule. Thus comments like this:

The government is also cautious on allowing more Chinese tourists to visit Taiwan something analysts say could give the island an economic boost and Taipei has failed to follow up on pledges to open cross-Strait transport links.

...need to be examined in light of the simple fact that the KMT never pursued them. Did FT report negatively on them as well? Somehow I doubt it.

[Taiwan]