Student protests spark economy as Honhai Chairman pans democracy, says it won't put food on the table

A temple in Pingtung.

Terry Gou made headlines this week, denigrating democracy.....

Hon Hai Technology Group chairman Terry Gou (郭台銘) said yesterday that “democracy makes no pottage” and that social movements were only a waste of social resources that did the nation’s GDP growth no good.

That's it, in a nutshell. J Michael ripped him excellently here, pointing out that Gou's real audience is might well be Beijing. Gou wants to import equipment from Huawei, the Chinese maker which is widely suspected of tight cooperation with Chinese security services and threatened to not pay his taxes if he couldn't import it. But it was Huang Tien-lin who deflated him most persuasively in today's Taipei Times, pointing out that blocking the trade pact gave the economy a boost....

Long before the protests against the cross-strait service trade agreement began on March 18, I had said that if the agreement were blocked, Taiwan’s economy would do better than forecast. Today we are faced with the facts. The student movement saved the nation just before the doors to hell were closed behind us and public confidence has increased. In March, during the student protests, exports reached US$27.76 billion, the third-highest month in history. Last month, economic indicators remained “green,” signaling steady growth, and foreign stock investors overbought for 26 days, with net purchases reaching NT$137.5 billion (US$4.6 billion).

These amounted to market approval of the political turmoil that went on for more than a month. Furthermore, the stock market index increased by 172 points during the student protests, or 1.98 percent, making it among the strongest markets in Asia.

This is part of a larger argument that Huang makes, which contends that keeping our distance from China enhances our economic growth. I think this argument is partly wrong -- from the end of the Lee Administration to the end of the Chen Administration was the Golden Age of Taiwan investment in China, when Taiwan exported stuff made in Taiwan and processed it there. We enjoyed reasonable growth, especially in the last couple of booming years of the Chen Administration. Huang links that to Chen's attempt to slow the drift into the China abyss:

The third was then-president Chen Shui-bian’s (陳水扁) announcement putting an end to the “active opening” policy on New Year’s Day 2006 and applying the breaks to further deregulation of cross-strait trade. The result was that the economy took a turn for the better, and 2006 and 2007 provided the best economic performance during Chen’s eight-year presidency, with the stock market almost breaking through the 10,000-point mark, reaching 9,859 points.

Should add that economic growth is expected, at the moment, to be better than last year. Cross-strait integration is slowly strangling Taiwan's economy. The government has become quite effective at deploying neo-liberal discourse to conceal its relocation of Taiwan into China's orbit. For example...

Both the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) are important to Taiwan and will play a crucial role in the country's economic development, Cho said in his opening remarks at an international forum on the service industry.

The output of Taiwan's service industry could fall by US$1.9 billion if the country fails to join the TPP, but could increase by US$8.58 billion if it becomes part of the economic bloc, he said.

Although services account for 70 percent of Taiwan's gross domestic product, they make up only 1 percent of the global market, Cho said. "There is plenty of room for Taiwan to develop," he added.

Taiwan should open up its services market more, which could help upgrade its industries, increase output and create jobs, Cho said.

The last is actually correct. The catch is, you have to open up to a market that is better than you at doing these things and competes on quality, so you can learn from it, not from one that is less skilled than you are and competing on cost. China can't upgrade Taiwan's service industries; the effect will be the opposite. Indeed, we are already seeing that in manufacturing.

Respecting this neoliberal discourse, the students did not disavow the neoliberal economic religion itself, but rather emphasized that they were for a good trade pact, but the services pact isn't one. This was a clever move and even better, the international media reported it correctly.

Meanwhile, as if to prove that we don't need the services pact, two Taiwanese banks announced further overseas expansion this week.

Cathay Financial Holding Co. said it has obtained approval from the Central Bank of Myanmar to set up a representative office for Cathay United Bank in Yangon, which the parent company expects will open during the third quarter this year.

Yangon, in Myanmar. Lots of people predicting Myanmar will be The Next Asian Tiger. Taiwanese firms already trickling in, but other Asian states remain far ahead in investment there, with China in the lead. With new investment markets like Myanmar opening up, distancing Taiwan from China and slowing the pace of integration is a possibility that should be a policy... but not under the current Administration.
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Daily Links:

• Taiwan hospitals suffer from nursing shortages. Hospitals and nurses are another example of the way female labor is exploited to maintain the profitability of local institutions.
• The canals of Changhua County
• US might tap into Taiwan early warning radar.
• Head of national security bureau Tsai De-sheng resigns. Many observers are interpreting this as Ma's right hand King Pu-tsun sweeping out those who will not play ball -- Tsai was one who did not sing the praises of China.
• Pro-KMT paper says students lack independence of thought and objectivity. Because you are only independent and objective if you do what the KMT tells you to do.
• KMT under threat: Changhua County Chief KMT primary is contested by the losers (FocusTw reports winner). This is splitting the party in Changhua. In Nantou there are two serious pan-Blue candidates, helping the DPP. In both counties the KMT faces corruption scandals. Yeehah. The Changhua KMT and DPP likely nominees are both current legislators so the election of either will trigger a by-election, as will a couple of other races. With a tight race in Taichung, central Taichung politics will be fun this year.
• High Comedy: the Taiwan rep office in Australia responds to Taiwan scholar Mark Harrison's piece on the Sunflowers. "Therefore, the story of Taiwan shouldn’t be simply or unfairly interpreted as the Taiwanese struggle against authoritarianism and for democracy, but the planned and consistent movement to prosperity and its unique, multi-opinion and vibrant democracy." and other fantasies. Every sentence in it is a gem, and so revealing of a certain mindset of authoritarian control. Note how the official presents the KMT's view of the past -- obviously thinking that KMT = ROC. The Party-State mentality is alive and well in the KMT and its minions, who communicate in declarations and commands, unable to persuade or lead. In a democracy, government officials who are not direct appointees should remain nuetral....
• ADDED: Nuke plants may have to shut down early. Seems there is no place to store the waste. The gov't must have known this was coming....

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