Thursday, 14 May 2015


I write this in lieu of the post I would like to write on the same question, simply because I am time constrained and have other priorities. But it is an important question and to my knowledge nobody is asking it, at least not in English. The question is what have been the consequences so far of the ECFA agreement, which came into effect nearly five years ago? A related question is what consequences may unfold in the next five years due to that agreement?

I simply cannot afford to do the research in a short span of time, but I would like to know the answers because I am quite sure nobody who comments on this kind of subject can be trusted to even attempt to find the truth, let alone tell it. There are too many political axes to grind on either side of the pro-ECFA and anti-ECFA divide.

The ECFA agreement straddles the central faultline of politics in Taiwan - the issue of Taiwan's political status vis-a-vis China, with the anti-ECFA people claiming that it was a precursor agreement to the eventual annexation of Taiwan by China. The reasoning for that claim was that China would benefit from the acquisition of Taiwanese technology and then use that technology to compete against the original Taiwanese producers, driving them out of the market. Let's ignore the question of whether that reasoning is valid (there are reasons to think it is not valid). There is something else. The anti-ECFA people were mostly all leftists and thus prone to the same protectionist sentiments as anywhere else in the world. There is thus an overlap; it is difficult to tell how much of the opposition to ECFA was and is generated by genuine concerns over the Chinese government's political motives and how much was and is generated by the usual economic protectionism. However that overlap may be formed, it's existence should be sufficient reason to treat the supposed factual statements of anti-ECFA commenters with deep suspicion, particularly when they are obvious hyperbole.

A recent example of this was given a few days ago by Chris Wang at "Thinking Taiwan" on an opinion piece about some pro-KMT "Taishang" (Taiwanese investors in China), in which he said this about the ruling KMT government:

"...after its China policy has proven to only benefit politicians and business tycoons rather than the ordinary people..."

That statement strikes me as obviously and demonstrably false. Even if we assume he is correct in his basic point, nevertheless that point could have been made with greater strength if he had merely said that the Ma administration's policies have benefited politicians and tycoons more, or even much more, than ordinary people. But he didn't say that. He used the words "proven" and "only" which more likely reflect his desire to express the point with great strength of feeling, than any commitment to accurate and honest evaluation. It is as if he believes that tycoons live in a separate economy from the rest of us and do not need to employ anyone or buy goods or services from anyone else, but simply collect mountains of cash from which they can sit and look down on the rest of us.

Aside from the obvious fact that tycoons, just like the rest of us, are embedded in multiple networks of exchange we call "an economy" there are also reasons (e.g. the law of comparative advantage) to think that the benefits of increased trade to ordinary people will tend to take time to accumulate. I have not the time to elaborate further on that here.

But I also want to mention a very specific refutation of Wang's claim which occurred to me, which is my purchase, through last year and this year, of a number of goods manufactured in China. On finding and buying these goods instead of the Taiwanese or other foreign country alternatives, I was able to save a small but significant chunk of cash. The goods in question were all apparel - sweaters, shirts, shorts, jackets, electrical pumps and various other bits and bobs all of which were manufactured in China and several of which I believe were included on the ECFA "early harvest list" of Chinese imports into Taiwan. As and when I get time and opportunity, I will do some digging on this and see if in fact this particular case of mine does indeed count as a true refutation.

I hope to write more on this subject and the question of ECFA's consequences as and when I get more time and opportunity for the necessary research.

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