MONEY, POWER, AND GLOBAL COMPETITIVENESS: TAIWAN'S OPTIONS IN THE WAKE OF CHINA EMPIRE

This paper analyzes the current status of Taiwan, both politically and economically.The central focus of analysis is in terms of how Taiwan interacts with China, and how it performs recently. Due to strong impact from global financial tsunami and trade recession,Taiwan has since suffered severely. Its economic forecast for 2009 is a minus growth (-3to -5%, according to various source; though recently most agencies have up-graded their forecasts), and unemployment and woes related with it are nearly across every industrial sector. In such a situation, money from China (either in the form of expenses spent by increasing influx of Chinese tourists traveling here or in the form of capital inflow pushing up the Taipei Stock index over 6000 points), is of course more than welcome by government as well as business here.Besides the monetary benefits of engaging with China, there is also harvest in political terms. Both sides recently signed a comprehensive agreement covering cooperative issues ranging from jurisdiction, shipping, investment and an initial agreement upon financial MOU. (cf. the third Chiang-Chen Talks, Mainland Affairs Council website; though these measures needed to be approved by legislative body). Also WHA has recently granted invitation to Taiwan this year, through either formal or implicit consent from China. Minister of Health Dr. Yeh had also just returned from his short yet pioneering trip to Geneva, where headquarter of WHO locates. In spite of all these positive sides of Cross-Strait relation, there are some points still needed to be reminded, For example, in the latest edition of a local leading business magazine, the message shown in its annual Top1000 Survey of Taiwan, Hong Kong, and China (Business Weekly, No.1120, May 11, 2009) has brought attention to our mind that Taiwan has suffered most in this global economic downturn. Average recession in both top-line (sales, minus10.2%) and bottom-line (profit, minus 72.2%) of Taiwanese Business in the 1000 List (255 companies altogether) are worst compared with the other two counterparts. Meanwhile, in 2009 Global Competitiveness Index Ranking (IMD,2009), Taiwan also performs worst. It ranks 23rd, lagging far behind Hong Kong (2nd) and even behind China (20th).The seemingly over-dependence on China and waning competitiveness of Taiwanese Business at the same time can¡t be overlooked. Leaders of Taiwan, both in politics and business, need to think strategically about this situation. Proper actions, with long-term strategic implication, should be taken immediately.