Ah, the Economist, still carrying a torch for Ma Ying-jeou. The most recent piece, Sizing Tsai Up, contains all the journalistic tropes we know and love.
When the media lies, it usually does so by key omission, and the Economist is no exception. Consider this paragraph:
As for trade with China itself, it ballooned under the outgoing president, Ma Ying-jeou (as did Chinese tourism to the island). Indeed, Taiwan is one of very few countries to run a trade surplus with China, thanks mainly to contract manufacturing and exports of capital equipment. Yet many Taiwanese resent the relationship, along with the cross-strait trade and economic agreements that multiplied under Mr Ma. Indeed the signing of a services agreement led two years ago to the “sunflower” movement of protesters, who argued that the deal would lead to China’s exerting undue influence on Taiwan. The movement, and subsequent student occupations of the Legislative Yuan, greatly undermined Mr Ma’s presidency.Of course everyone recognizes the first sentence, it's a common trope. Yes, overall trade grew under Ma. What none of these "journalists" ever notes is that it ballooned far faster under the Chen Administration and Taiwan businessmen did much better. The Ma Administration represented the end of the golden age for Taiwanese in China.
The trade numbers are available on the Bureau of Trade website (go to SEARCH BY VALUE, set the country to China, and select the years you want). Even writers for the Economist should be able to find them. Let's look....
First, the total trade numbers for China in billion US$ (column 2) and growth rate (column 3)(w/o HKK and Macau)(trade with Hong Kong was $33 billion in 2000, peaked at $44 billion in 2014, and fell back to $39 billion in 2015. Trade with Macao is not very large.)...
| 2000 | 10,440,540,918 | 47.82 |
| 2001 | 10,798,076,970 | 3.424 |
| 2002 | 18,495,033,007 | 71.281 |
| 2003 | 33,907,784,754 | 83.335 |
| 2004 | 53,140,562,278 | 56.721 |
| 2005 | 63,736,408,872 | 19.939 |
| 2006 | 76,590,504,462 | 20.168 |
| 2007 | 90,430,526,782 | 18.07 |
| 2008 | 98,273,497,890 | 8.673 |
| 2009 | 78,670,764,058 | -19.947 |
| 2010 | 112,879,654,027 | 43.484 |
| 2011 | 127,555,177,571 | 13.001 |
| 2012 | 121,621,186,471 | -4.652 |
| 2013 | 124,376,057,324 | 2.265 |
| 2014 | 130,158,219,397 | 4.649 |
| 2015 | 115,392,430,915 | -11.344 |
Note that trade under Chen skyrocketed from $10.4 billion in 2000 to $98.2 billion in 2008, or a gain of nearly $88 billion. What happened in the "ballooning" Ma era? Trade grew from $98.2 billion and peaked at $130.1 billion. Using that peak, the best gain was just $32 billion, less than half the Chen Administration figure. Through 2015 the total net gain was a paltry $17.1 billion (115.3-98.2). To put those numbers in perspective, in the two years between 2002 and 2004, trade gained $35 billion (in fact, trade gains were larger than the entire Ma Administration in almost any two year period in the Chen Administration). Nor did the Chen Administration experience any negative trade growth.
Indeed, as my son pointed out to me as I wrote this post, trade basically stagnated during 2011 to 2014, with a net gain of just $3 billion during those 4 years, or about what a Taiwan businessman spends on drinks with his buddies during a Saturday night out in Shenzhen.
Of course, the sharp-eyed among you will note that in 2010 ECFA was signed. That's right, since ECFA came into force, trade with China has stagnated and then fallen. And that's what the Economist calls "ballooning." Well, perhaps the Economist calls it "ballooning" because there is so much hot air in its claims...
But let's look at that next omission by the Economist.
Indeed, Taiwan is one of very few countries to run a trade surplus with China, thanks mainly to contract manufacturing and exports of capital equipment.Yes, we do run a trade surplus with China. Here are the numbers (US$billions, China only):
| 2000 | -2,005,682,704 | 0.819 |
| 2001 | -1,007,492,002 | -49.768 |
| 2002 | 2,558,443,421 | -353.942 |
| 2003 | 11,872,821,076 | 364.064 |
| 2004 | 19,557,486,938 | 64.725 |
| 2005 | 23,550,236,834 | 20.415 |
| 2006 | 27,025,853,070 | 14.758 |
| 2007 | 34,402,295,404 | 27.294 |
| 2008 | 35,492,565,742 | 3.169 |
| 2009 | 29,825,438,414 | -15.967 |
| 2010 | 40,989,496,995 | 37.431 |
| 2011 | 40,363,622,351 | -1.527 |
| 2012 | 39,806,327,025 | -1.381 |
| 2013 | 39,199,232,438 | -1.525 |
| 2014 | 34,080,427,333 | -13.058 |
| 2015 | 27,026,406,849 | -20.698 |
What the Economist doesn't say is screamingly obvious: since ECFA was signed the trade surplus has plummeted. Compare: the 2015 trade surplus is nearly identical to the 2006 trade surplus. ECFA is clearly "working as intended".
If you mention the trade surplus and Taiwan in the Ma Administration, but omit that it has fallen since Ma's centerpiece legislation was signed and all but two years during the Ma Administration... no need to complete that sentence.
The article constantly attempts to position the Ma Administration as economically successful, but opposed by those "hardline" Taiwan independence types solely for political reasons. It never mentions that the anti-ECFA and services pact forces were motivated by the economic effects of increased integration with China. Once it had committed to the lie that trade was awesome, it was inevitable that it could only explain opposition to increased integration in terms of independence politics. Sad.
Once again, Economist, you have my gratitude. It is because of lazy, trope-ridden, pro-China reporting like this that my blog and other Taiwan-centered websites continue to be useful for and popular with academics, analysts, and media workers. Thanks, guys!
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Daily Links:
- New Bloom: Why is nobody in Taiwan talking about the fish die-offs in Vietnam?
- Great Taiwan 1970 photo album on Flickr. 23 photos from 1966 visit here.
- The Ma Administration, even in its last days, continues to troll SE Asian nations on the South China Sea, in this case with an invitation to Manila to visit Itu Aba.
- Meanwhile Beijing continues to set the stage for war
- Zika reaches Singapore
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You are on target as usual. A close examination of investment trends should also show an unfavorable comparison between the Ma and Chen years. Inward or domestic investment in Taiwan contracted as well under Ma, accelerating the hollowing out of the economy begun years earlier but clearly unimpeded by Ma's misguided policies of all-in with the PRC. His policies amounted a criminal neglect of Taiwan/s best interests, with no long-term strategy other than the political one we all know too well.
ReplyDeleteYou are on target as usual. A close examination of investment trends should also show an unfavorable comparison between the Ma and Chen years. Inward or domestic investment in Taiwan contracted as well under Ma, accelerating the hollowing out of the economy begun years earlier but clearly unimpeded by Ma's misguided policies of all-in with the PRC. His policies amounted a criminal neglect of Taiwan/s best interests, with no long-term strategy other than the political one we all know too well.
ReplyDeleteThis might be more easily explained by the Economist's steadfast refusal to see any of the subtler or more negative effects of free trade. Which, again, why would they?
ReplyDeleteI think you make a good point that The Economist does, to some extent, rely on a troupe rather than evidence to back up their point.
ReplyDeleteBut your analysis suffers from an equally egregious error: you assume that the commercial environment, including the global and regional economic environment, is the same over the two time periods. This is usually not a good idea.
That is, the state of China's economy and Chinese firms during Chen's administration was still developing and at a relatively low-value added level. Thus, one might expect robust trade and investment as Taiwan possessed better technology and Chinese firms may have needed greater imports of goods, particularly intermediate inputs. This time period also coincided with China's WTO accession meaning that China's commercial environment was experiencing rapid change, change that would not be replicated in any other time period.
This does not fully discredit such an analysis to keep the two time frames static; however, it certainly does mean you are not measuring apples-to-apples. To be fair, I think the Economist fails to do a lot of research to back up their point, and their point may ultimately be invalid, but we need to be careful about across time comparisons.
Is there no Internet in the Economist's Offices?
ReplyDeleteWhere do you think they(and most journalists) get(copy) there stories/info?
This comment has been removed by the author.
ReplyDelete.,But your analysis suffers from an equally egregious error: you assume that the commercial environment, including the global and regional economic environment, is the same over the two time periods. This is usually not a good idea.
ReplyDeleteYou've badly misread this. The issue is NOT which President had better conditions. That's simply not relevant.
The issue is that the Economist told two spectacular lies of omission, which I documented using the trade figures.
These lies are pro forma in the media. To my knowledge not a single journalist has ever mentioned the falling trade surplus.
This might be more easily explained by the Economist's steadfast refusal to see any of the subtler or more negative effects of free trade. Which, again, why would they?
ReplyDeleteIt's all bound up with the simple fact that the Economist has become a 1% rag.
I understand your point about ommission and it is a good one. Nor am I defending The Economist's point of view.
ReplyDeleteThe paragraph below, however, while potentially refuting The Economist (which I am not defending), commits the very error of comparison that should not be made. The Economist should not make it, nor should any one else: Any trained social scientist would make the same point about making static assumptions across two very different historical periods, particularly as China's economy has changed so much over that time period. That is, what percentage can you attribute to one-off historical factors, and what percent can you attribute to dumb luck? I have no idea.
"Note that trade under Chen skyrocketed from $10.4 billion in 2000 to $98.2 billion in 2008, or a gain of nearly $88 billion. What happened in the "ballooning" Ma era? Trade grew from $98.2 billion and peaked at $130.1 billion. Using that peak, the best gain was just $32 billion, less than half the Chen Administration figure. Through 2015 the total net gain was a paltry $17.1 billion (115.3-98.2). To put those numbers in perspective, in the two years between 2002 and 2004, trade gained $35 billion (in fact, trade gains were larger than the entire Ma Administration in almost any two year period in the Chen Administration). Nor did the Chen Administration experience any negative trade growth."
That is, what percentage can you attribute to one-off historical factors, and what percent can you attribute to dumb luck? I have no idea.
ReplyDeleteI am not comparing the two periods on their performance, but on the Economist's description of the situation. If Ma was ballooning, what was happening during the Chen era? Of course the Economist never mentions that.
Of course they were different periods. Chen was the tail end of a golden age. Ma was beginning of a slump.
I knew someone would come in with this line, and that is why I didn't attribute anything to the management of either, except for ECFA, whose performance effect is rather obvious. Chen was obviously luckier than Ma.