Taiwan-China trade rises 25.8 per cent in 2000

Mark Munsterhjelm gustav88 at SPAMms13.hinet.net
Sat Mar 3 01:17:40 MST 2001




Ulhas Joglekar wrote:

> Mark Munsterhjelm:
>
> > This is part of the accelerating integration of these two entities.
> Taiwanese
> > and foreign capitalists are busy pushing for direct links and already
> shifting
> > their operations out of Taiwan to the PRC. The predictable effects on
> Taiwan are
> > already starting to be felt with rising unemployment, rising suicides,
> increased
> > worries about the future etc. This combined with WTO accession will likely
> cause
> > a general decline in the standard of living for most Taiwanese as they are
> > forced to compete with PRC's far cheaper labour. This begun to occur in
> the past
> > few years among Taiwan's working class as labour intensive industries
> began
> > shifting elsewhere. This is now starting to move up the social ladder as
> high
> > tech companies begin their exodus. However the Taiwanese elements of the
> > transnational business class and their attendants will of course emerge
> > wealthier as shown in Taiwan rapidly increasing income inequality.
>
> Taiwan's trade surplus with China would normally produce growth and
> employment in Taiwan. Is this not large enough to compensate for the loss of
> labour intensive industries to China?
>
> Ulhas

Hello,

Taiwan's high technology industries such as it's chip foundaries produce high
value added products such as computer chips which are capital intensive not
labour intensive. Therefore these require fewer workers per unit of value. I
don't have figures but I wonder how much of this trade surplus is actually
intrafirm part transfers of Taiwanese made high technology components bound for
PRC assembly plants?

Growth in Taiwan doesn't necessarily mean additional jobs for Taiwan since the
benefits will likely to go disproportionately to the upper income earners. This
is a likely outcome since income inequality is growing rapidly meaning that the
benefits of growth are also increasingly uneveningly distributed. While a
certain amount of this growth may "trickle down" creating jobs in the service
industries that serve the wealthy, a larger proportion of this is likely to be
spent on foreign luxury goods such as Mercedes, expensive vacations abroad,
foreign university educations, etc then working class spending patterns.

Mark






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