05.14.08
Taiwan – Identity Clouds Growth Prospects
Taiwan made an important historical choice on March 22 when it elected Ma Ying-jeou, former Nationalist party mayor of Taipei, as its new president. The country is well along a path as a mature democracy, putting back in power the party that had been associated with the dictatorship of Chiang Kai-Shek. Ma won handily 58 to 41% as the electorate strongly supported his policy of closer ties to Beijing.
The Taiwan economy finds itself in a peculiar place. The self-imposed limits on doing business with the mainland, which date back to the Cold War, had limited economic opportunities. It is estimated that almost a million Taiwanese live again in the PRC, with the largest concentration in Shanghai. On paper, Taiwan is the number three foreign investor in the mainland but many independent observers believe that the amount is much larger since Taiwanese companies have had to resort to setting up shell companies in Hong Kong and other countries to get around the official limits on investment in the PRC. Taiwan’s growth this decade has been strong, but many look with envy toward the explosive growth on the mainland. With a higher level of English literacy, Taiwan should be a portal, not a detour, to doing business with China.
My visit to Taiwan occurred two weeks after the elections. The country seemed confident of moving ahead, but like its neighbors it has to deal with the problems of pollution and congestion. The freeways and major highways, many of which are now 40 or 50 years old, are clearly inadequate. But the living standards are clearly on a par with the other Asian democracies and this most recent election bore testament to the strength of democracy in Taiwan, something was in doubt up to only a decade ago.
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