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May 30, 2017

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Gov't harps on perks of trade pact but fails to ease concerns

The government has been consistently defending the controversial cross-strait service trade pact by claiming that it is a crucial step for Taiwan to join the world of free trade.

Most of its rhetoric of defense has been focused on convincing the public that the agreement will do little harm to the local market and that Taiwan will gain much more than mainland China out of the pact.

It has repeatedly dispelled rumors about opening the doors to Chinese labor, and has stressed that a lot of rules and regulations will be in place to control Chinese investors and prevent them from monopolizing the Taiwan market.

But the government has hardly explained how Taiwan's economy will benefit from China opening its doors to investors, such as banks, from Taiwan's service sectors.

It may be assuming that the benefits to the economy are so obvious that it needs no explanation. But is the government actually diverting the attention from some more important issues involved?

Harm may not be really done to the service sectors to be opened to Chinese investors. How many Chinese hairdressers will open salons in Taiwan? How many publishing houses will be interested in investing in a counterpart in Taiwan? And it is true that no Chinese labor will be imported under the agreement.

But what are the implications of letting more Taiwanese investors go to China?

Over the past 15 years or so, Taiwan's economy has been growing almost every year — sometimes less, sometimes more — except for 2009 amid the global financial crisis. But the growth, in some ways, has failed to translate into tangible benefits for the people. The present salary level is even lower than that of 16 years ago.

Over the past 15 years or so, most of the traditional manufacturing businesses have left Taiwan for China and other places that offer cheap labor. Laborers have been finding it hard to land a job in the traditional manufacturing sector, if not impossible.

Over the past 15 years or so, Taiwan's reliance on China has been growing. In 2010, 81 percent of Taiwan's outgoing investments went to China, according to a recent report in Taiwan's Business Weekly magazine. And China is now one of the most important markets for Taiwan's exports.

So while the government claims the cross-strait trade pact will boost Taiwan's economy, many believe that it will only benefit businesses, rather than ordinary people.

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