Taiwan In Cycles: Jan 15, 2012

Sunday, January 15, 2012

Ma's Victory: The Election Cycles

Although the elections may be over, there is still plenty to think about in the wake of Ma Ying-jou's victory on Saturday.

Ma has found a well of support from big business, which hopes to take advantage of Ma's desire to lock Taiwan's economic fortunes to those of China, despite divergent interests and needs. It is like the meaning of the oft misinterpretation of "What is good for General Motors...." Part of Ma's desire to make Taiwan an economic dependency of China is pragmatic in serving the business community, the other part is his ideological belief in Sun Yat-sen's Chinese nationalism.

Of course we see this each election cycle, where the business community rallies around the president who supports Taiwan's economic and political annexation by China... and then that same community realizes what the more cautious observers are seeing. This is precisely because of the ideological component of the KMT's program.

The American Chamber of Commerce had such a realization in June:

“Taiwan should pursue greater balance by consolidating its economic connections with such other major markets as Europe, Japan, Southeast Asia and especially the United States, the world’s biggest economy,” AmCham chairman Bill Wiseman told a media briefing on the release of the organization’s annual white paper.
Wiseman’s warning came a few hours before the release of Taiwan’s latest trade data, which showed China accounting for 40.2 percent of exports last month, while the US took only 12.3 percent.
“Over-reliance on one market is always risky,” Wiseman said. “Taiwan should not turn away growth when it can get it, but it needs to lock in the future. It needs to go and start broadening its economic relationships beyond focusing so much on China.”

Just prior to Saturday's election Nicola Formosa from Bicycle Retailer released this piece detailing what is essentially a list of KMT talking points thinly veiled as a news article promulgated by the big movers of the bike industry.

TAIPEI, Taiwan (BRAIN)—Taiwan voters go to the polls this weekend to decide a close presidential race that bears implications for cross-strait relations between the island and mainland China.

Incumbent Ma Ying-jeou of the Chinese National Party, or the Kuomintang, is being challenged by the Democratic Progressive Party’s Tsai Ing-wen. A third candidate, James Soong Chu-yu of the People First Party, represents that party’s first-ever presidential bid. In the past four years, President Ma’s administration has eased relations between Taiwan and China, opening doors to Chinese tourists with direct flights from the mainland—previously Chinese had to fly through Hong Kong or Macau before arriving in Taipei—and signing the Economic Cooperation Framework Agreement (ECFA).

The ECFA, a trade pact that ended a 12 percent duty on bikes and most bike parts shipped from Taiwan to China, has already benefitted the cycling industry. Taiwan’s top two frame manufacturers, Giant and Merida, both realized significant increases in revenue from the Chinese market last year. Merida’s revenue from China was up 124 percent through October 2011 and Giant’s rose 40 percent through August. Rim maker Alex Global pointed to the ECFA when announcing that its turnover in China tripled last year. Taiwan exports about 3.8 million bikes annually to the global industry with the U.S. importing about 21 percent of those units. It also exports $480 million in bike parts.

Another term under Ma’s leadership could lead to further cooperation between Taiwan and China, which stands to boost the bottom line for Taiwanese businesses. But, Ma’s opponents believe closer ties across the Taiwan Strait threaten Taiwan’s future independence as the Chinese Communist Party strives to reunite Taiwan and China. Tsai and her Democratic Progressive Party have pushed for formal independence from China, which considers Taiwan a renegade province.

Now that the results are in and we know Ma Ying-jiu will be continuing to shape Taiwan's economic policies with China at the center, we need to wonder what this means for Taiwan's bicycle industry.

The big bike companies will continue making money hand over fist using Chinese labor and selling to a Chinese market, creating Chinese jobs. This is very good for the few people who are associated with those big corporations... but this begs the question.... If all those jobs are being created by Taiwanese companies in China... what does Ma intend to replace them with in Taiwan?

The jury is still out. From what I have seen Ma intends to block the hemorrhaging with cycle paths and tourism-- A far cry from any real jobs.

Baby Kit Goes Bike Shopping

Uncle Rocky thinks about bullets dodged

This Lunar New Year our little baby Kit decided she needed to go bike shopping. I sent her to visit Rocky at T-Mosaic with the instructions that she could have anything in the store... as long as it was a size 52cm frame.