From: joy@quip.eecs.umich.edu (Chien-Chung Chen)
Subject: Re: more than 50% support TI
Organization: University of Michigan EECS Dept., Ann Arbor
Date: Thu, 31 Dec 1992 08:39:21 GMT

In article <1992Dec31.000403.16725@cbnews.cb.att.com> liaohen@cbnews.cb.att.com (Heng-Hsin Liao) writes:
>From article <1992Dec30.211918.3032@nntpd.lkg.dec.com>, by li@sicvax.enet.dec.com (Tom Li):
>> Not only China but also Thailand etc other countries will catch up us if we 
>> dont move to upmarkets. It is just principle of economics and why this has 
>> anything to do with independence? Do you really think independence can 
>> avoid China's dominance? then how about Japan, just look at our trade 
>> deficit with Japan? How about S. Korea, our current competitor?
>> 
>
>Yes, as long as we export different levels of product, how do China
>dominate us? Is it possible that China dominate Japan in 50 years?
>My answer is no.

I'm pessimistic about Taiwan's ability to upgrade her industry. Although
there is some R&D in Taiwan, overall it's far from adequate. Most Taiwan's
businessmen have no interest in high-tech industry. When the labor in
Taiwan gets expensive, they simply move to other countries where labor is
still cheap. A great part of Taiwan's investment is for low-tech industry
in other countries now.

Korea might come close to Japan in technology someday. But Taiwan is not
on the right track so far.

>My point is the current "status quo" situation significantly slows down
>the pace of our economic reform. Independence is a way to break through
>to me.

Taiwan's economic reform relies on the establishment of high-tech industry.
This includes setting up the technological foundation and healthy research
environment. I don't know how this can be related to TI.

>>>If we were catched up by China someday, it
>>>would become an "unfair competition." Taiwan would be in danger at
>>>that time.
>> 
>> "unfair competition"? Why? 
>> 
>
>Okay, assuming Taiwan and China export the same product at the same price.
>What is going to happen if China decide to "punish" Taiwan by declaring
>to the world: "If you import something from Taiwan instead of China, China
>will take back your market share of whatever in China." "Unfair" may be
>too strong since China has a much bigger market is a fact. Think about
>a population ratio of 50:1 and a consumption capability ratio of 10:1 now
>and 20:1 ten years later. (10:1 and 20:1 are my guesses.) By the same
>token, other developing Asian countries would not be serious threats if
>they caught up with Taiwan because they don't have much bigger markets
>compared to ours and we are no enemy to them.

Should Taiwan declare her independence, will China give up the idea
of "punishing Taiwan"? Probably not. There will still be an unfair
competition.

On the other hand, if China's economy catches up with Taiwan's, then
the barrier to peaceful unification will be much smaller. When the day
of unification comes, Chinese and Taiwanese are no longer enemy to each
other, and Taiwan can have a much bigger domestic market to sustain her
economy. There will be no worry about the "unfair competition" then.

>There is a problem though. What if China do the same thing to us even
>if we export high value-added products? Anybody want to comment on this?

After unification, this problem will disappear. :)

When the protectionism prevails someday, which is likely to happen in
the future, Taiwan will need a big domestic market to sustain her economy.
In my opinion, we Chinese need to stand together for our better future.

-- Chien-Chung Chen