An Analysis of Globalization, Regional Development in Taiwan, China, and the Moral Economy

The first three lectures in the Green Economy series were positioned around understanding Taiwan. Professor Lai Jian-cheng first opened the curtain for us, taking everyone back four hundred years, when Taiwan, because of its abundant natural resources, was forced onto the economic stage dominated by the Western world. Immediately afterward, Professor Liu Rui-hua unfolded a three-dimensional, rotating picture for everyone, using both the progression of historical time and the unfolding of geographical longitude and latitude to vividly mark the important milestones of the global economy since the fifteenth century. And today, Professor Hsu Chin-yu once again turns the camera toward Taiwan, unraveling strand by strand the economic development and changes of Taiwan over the past thirty years and laying them before the audience, from the traditional industries of the central region, to the petrochemical industry of the south, and then to the semiconductor industry of the north. Different regions create differences in local industries; worldly affairs are ever-changing and prosperity is hard to sustain. Today, after nearly half a century of economic prosperity, the audience cannot help but ask heavily: "If external costs are factored in, do these profitable industries still have competitiveness?"

In the late 1980s, Professor Hsu, then still a graduate student at the Graduate Institute of Building and Planning at National Taiwan University, went to central Taiwan for a research project. The Taichung-Changhua area in his eyes was very different from the agricultural countryside in his impressions. At the time, policy advocated rural industrialization; small processing factories stood everywhere, indistinguishable from farmland, the wastewater from processing factories was discharged directly into farmland, discarded umbrella fabric piled up like mountains was a very natural thing, and Mercedes-Benz sedans parked in front of every household's small factory were also a common sight. At the time Taiwan had many world number ones; the umbrellas of Hemei, Changhua and the hardware of Lukang were products that dominated the world at the time, and one out of every two umbrellas in the world was made in Hemei. The result of rural urbanization was that Taiwan presented a scene of widespread wealth among ordinary people, and the tiny income gap between urban and rural areas was also difficult for other countries to match.

In the 80s and 90s of economic takeoff, Taiwan did not yet have environmental protection awareness, and small factories standing amid the fields freely discharging wastewater was not strange. With the rise of environmental awareness and the attention given to labor welfare, Taiwan's production conditions were no longer as unrestricted as in earlier times, so factories one after another shifted low-end production to countries and regions with relatively looser production conditions. At the same time, some manufacturers also gradually adjusted their production chains and transformed into producers more in line with international standards. This way of thinking also drove Taiwan as a whole to transform from a labor economy to a knowledge economy. Professor Hsu believes that every era has its own historical and temporal background, and using present standards to condemn the necessary evils of that time is not very meaningful; moreover, every problem has multiple and complex dimensions, and without the arduous pioneering of that time, it would have been impossible to create Taiwan's prosperity today.

During the lecture, Professor Hsu took the production chain and distribution of costs and profits of Nike shoes as analyzed by the International Labour Organization as an example to explain that Taiwan has already transformed from an era of purely earning meager wages to one of management and partial design and manufacturing processes. Taiwanese manufacturers have also invested large sums of money trying to establish their own brands internationally, but so far there have been no successful cases. Any transformation of the production structure is not easy. Professor Hsu mentioned that in the process of transformation, the urging of consumers and the practice of consumer behavior are often more effective than government regulations. This is why he believes that moral economy, or moral consumption, has a force that cannot be ignored. He also reminded everyone that the current economic rules have not escaped the framework of capitalism, and that to change manufacturers, one still has to enter the existing rules of the game, that is, to use the power of consumption to demand that manufacturers change. As for which direction to change toward, Professor Hsu believes that standards are usually proposed by civil society groups or international organizations, and then certification is carried out by the government or organizations with public credibility.

In addition to his in-depth observations of the traditional industries of central Taiwan, Professor Hsu Chin-yu has also successively studied the large-scale petrochemical industry of the south and the high-tech semiconductor industry from Taipei to the Hsinchu area. He believes that Taiwan's petrochemical industry is internationally competitive, and the related employment opportunities it provides play a decisive role in Taiwan's economic stability. If it were easily abolished simply on the grounds that the petrochemical industry pollutes the environment, the problems caused might be even more complex than imagined. As for the audience's question: "If external costs are factored in, do these profitable industries still have competitiveness?" Professor Hsu answered affirmatively, believing that Taiwan's petrochemical industry is internationally competitive. The Taiwan government did once protect Taiwan's petrochemical industry with a 200% tariff, but at present tariffs on petrochemical products are no longer an obstacle to imports, and Taiwan's petrochemical industry still holds a place internationally, which shows that through management and operation, Taiwan's petrochemical industry truly does have international competitiveness.

As the lecture neared its end, Professor Hsu Chin-yu once again said with earnest feeling that Taiwan's manufacturers and consumers are in fact always progressing. It is just that part of the government's management and regulations have not yet kept up with the pace of the times; outdated subsidy mechanisms and tax systems create real unfairness that has not been improved; the government's administrative measures overly favor large enterprises, and the backward land tax system can no longer respond to the public's demands for fairness. These improvements are all directions Taiwan can work toward, and also opportunities for Taiwan to rise again.

The first three lectures in the Green Economy series outlined the economic history of the world and Taiwan. The next four lectures will begin to explore future economic options.

11/1 (Sat) 7:00 p.m. | Dunnan Eslite B2 Audiovisual Room
Green Economy Series Lecture Four "Cooperative Economy"
Free registration http://www.wutong.org.tw/tw/event/391-ddiii-4.html

*This lecture issues teacher study hours, civil servant lifelong learning hours, or environmental education learning hours