Farmers and Chen, the battle of wills or dollars and sense?

Politics Taiwan Politics
1

As many of you may have been reading in the papers China has gone directly to the southern Taiwan farmers association in an attempt to destroy Chen’s support base and to get Taiwanese surplus fruit sold in the Chinese marketplace.

An agreement was struck between Hu and Lien during his visit to the P.R.C. regarding the removal of taxes imposed on Taiwanese fruits.
What looked like win win situation for cash strapped Taiwanese farmers, has now been turned into a “national security issue”, Chen’s words not mine.

Chen, as usual, made an ill thought out speech on “the pennies earned in China as opposed to dollars in Japan”.
While this is true, fruit sells for more in Japan, fruit that rots in cold storage in southern Taiwan for lack of markets earns nothing.

Chen , a lawyer, with seemingly little or no actual understanding of the law again made a flawed public address which I am sure he will recant or deny later (see his US freedom of the press speech last week).

Here is a dumbed down basic tutorial on Economic Geography that any first year arts student, let alone the leader and protector of Democracy in Taiwan should be able to understand:

1.) location of production or manufacture in relation to point of purchase influences price; the closer the source the cheaper the price.

2.) Point of purchase price in relation to local market prices and currency; if you can’t sell your product at a price reasonable to the local market you don’t sell.

3.) The active pursuit of as many markets as possible is what drives agrarian based economies i.e “economies of scale” ; the more of something you produce will lower the average cost per unit. The ability to produce a surplus at the lowest price per unit is the mechanism needed to become a profitable agricultural producer and exporter.

I think surplus produce rotting in cold storage proves the farmers in Taiwan have achieved this.

To ignore a huge market because the leader of that nation hurt your feelings by refusing to talk with you is not serving the needs of the people it is serving the needs of your ego.
I am pretty sure the job of a democratically elected president is to serve the people, or at least be smart enough to look like you are.

If farmers want to/ need to sell their products in China and the influx of cash will help the lagging Taiwanese economy why not?

what say you?

2

SHIFTY has provided a very good analysis … however, after talking with my Taiwanese friends, I believe the situation is much more complex than SHIFTY has described it here.

To say that the price of Taiwanese fruit (when purchased in Taiwan and shipped to mainland China for sale) is FIFTY TIMES more expensive than the local mainland Chinese grown fruit is an understatement.

So … when the novelty of “Taiwan fruit” wears off, of course there will be no market for Taiwan fruit in mainland China … however, the China government will probably support purchases of this fruit for some months or years to continue this marketing effort.

Then, at some point in the future, the Chinese can say: “Well, you are selling your fruit here, so we want to sell our fruit in Taiwan. That is only fair.”

At that point, all the fruit farmers in Taiwan will lose their livelihoods.

3

Taiwanese fruit is already on sale in HK, and at very high prices. Doing quite well too.
Those people in China who have money know how dirty and unsafe food is over there. Luckily they can afford imports.

4

Hartzell,

That is assuming that ROC operates under a “free market economy” and will allow fruits to be imported without tarrif.

Japanese and Korean farmers are able to do trade with PRC without wiping out their native farmers.

Even if the Taiwan farmers are wiped out, it is a good thing under the theory of modern markets. These will be the new labor force for more advance jobs on Taiwan’s evolving economy. Those that go out of business will be least efficent and adding the least value into the market. Those that survive will ensure lowest price points are offered to satisfied the market.

CSB analysis is incorrect in “pennies in China, Dollar in Japan” because if the Japanese market knows if value of the product is significantly less, they would refuse to pay. Thus the mark up CSB refer to is not seen by the farmers on Taiwan, but instead the middle men in Japan.

5

As far as I know, this is patently false. At the time when Lian got this “deal” from the mainlanders, a long, loud snicker could be heard in the HK media. The reason? Taiwan fruit does not sell even in HK. It is far too expensive and product of the same quality can be sourced from farms on the mainland that go to the trouble of passing Hong Kong hygiene standards. I rarely see Taiwanese fruit in HK markets.

I agree with you that affluent mainlanders understand how iffy locally sourced foods are, but it seems that it will take a while for a market to develop to meet their demands, regardless of where the food is sourced from. Mainlanders just aren’t buying the Taiwanese stuff that’s on the shelves right now.

6

JT: I stand corrected, thanks. I wonder who’s concocting this tale then?

7

[quote=“Jive Turkey”]Taiwan fruit does not sell even in HK. It is far too expensive and product of the same quality can be sourced from farms on the mainland that go to the trouble of passing Hong Kong hygiene standards. I rarely see Taiwanese fruit in HK markets.
[/quote]
I should actually change that. A couple of Taiwanese fruits sell well in HK, but they are things that are sort of considered exotic. Guava seems to be one of them. The only guava I’ve seen in HK is from Taiwan, but it still doesn’t seem to sell too well as it’s not even in all the big supermarkets. I imagine this is due to both price and local taste. Mainlanders no doubt feel the same way. Almost all the high turnover fruits seem to be from the mainland. Fuji apples, my daily eat, are still from Japan. If Taiwan’s “exotic” fruits don’t even do well in HK, then I don’t see how they’ll do better in the relatively poor mainland.

8

I think you guys miss the point. By the time the Taiwan fruit is show cased in HK, for instance the Guava fruit, the Taiwan farmer already got paid.

Whether or not their sales volume is as high as instant noodles is a whole other matter and doesn’t really concern the Taiwan farmer as much.

In the short term there is almost no downside to selling Taiwan fruits to the mainland. Even in the worst case scenario where the mainland market totally rejects Taiwan fruits, there is still a window of opportunity to make some profits for the Taiwan farmers.

The rest of the political speculation of how these fruits will aid unification is just that, speculation.

9

[quote=“Hartzell”]SHIFTY has provided a very good analysis … however, after talking with my Taiwanese friends, I believe the situation is much more complex than SHIFTY has described it here.

To say that the price of Taiwanese fruit (when purchased in Taiwan and shipped to mainland China for sale) is FIFTY TIMES more expensive than the local mainland Chinese grown fruit is an understatement.

So … when the novelty of “Taiwan fruit” wears off, of course there will be no market for Taiwan fruit in mainland China … however, the China government will probably support purchases of this fruit for some months or years to continue this marketing effort.

Then, at some point in the future, the Chinese can say: “Well, you are selling your fruit here, so we want to sell our fruit in Taiwan. That is only fair.”

At that point, all the fruit farmers in Taiwan will lose their livelihoods.[/quote]

In theory this may be true I think two factors will determine how this plays out:

  1. type of PRC fruit sold here would have to be either very unique or very cheap. i.e. something not locally produced or high quality low price a phrase not normally asociated with PRC products in general.

2.The actual level of Taiwanese consumer loyality to domestic produce vs their hunger for the cheapest price possible.

This is basically exactly what happened with China and Clinton when they reached the trade agreement. China was given massive market acess in the US, in return for US access to the PRC market.
The result was China flooding the US market and Walmart with cheap products while little or no US products were imported in return. The trade deficit is in the billions.

So yes it did not work out for the US at all.

Why should taiwan expect any difference?

However, a fundamenatal issue that becomes obvious is the weakness in the Chen administration in their inability to deal with global leaders.
How long can and will the Taiwanese people accept a leader who is shut out of world affairs?

His pendantic attitude and desperate flailings sp? reek of a administration who is in the last throes of life.

If China wanted to kill his southern support base with this action they started the ball rolling, but Chen in his flip-flopping daddy knows best, cuz I said so attitude kicked the ball into the net.
:wink:

10

You’re just exposing your own ignorance here. Plenty of high quality, low price mainland produce is sold in HK. Having lived in both HK and Taiwan, I can tell you that it’s at least as good as what’s available in Taiwan.

[quote]However, a fundamenatal issue that becomes obvious is the weakness in the Chen administration in their inability to deal with global leaders.
How long can and will the Taiwanese people accept a leader who is shut out of world affairs?[/quote]
WTF are you on about? CSB and Annette Lu have made more visits/transits through the US than any previous ROC President. Global leaders? In case you haven’t noticed, “global leaders” have no shorter attention span for CSB than they had for LTH or Jiang Jingguo. No “global leader” has directly dealt with an ROC administration for 25 years. Your vituperative little rant has no basis in reality.

I guess you’ve now got no argument to make and can only resort to blowing hot air.

11

I did not say they were not high quality I said P.R.C. products were not normally perceived as high quality in the market; here or abroad.

yes they have made many transit visits my point is how many official state visits?
None, they travel in transit to S. America as private citizens. They do not get head of state treatment they do not visit D.C. they just bypass the visa process.

Rather than just attack me why not offer some evidence to dispute my assertions. State your case, make a point, something.

We disagree, that’s great! However, I feel no need to call you or your contrary ideas pejorative names.

I wonder why you feel the need to?
:s

12

Relevance? No ROC leader has made an official state visit to the US for more than 25 years. Perhaps you’ve been asleep for the past 25 to 30 years, so I’ll clue you in: the ROC hasn’t had official relations with any “world leaders” since December 31, 1978.

[quote]Rather than just attack me why not offer some evidence to dispute my assertions. State your case, make a point, something.
[/quote]
Again, what are you on about? You come on here asserting that “the funadamental problem” is that CSB’s administration can’t deal with “global leaders,” yet you offer no evidence to support such a sweeping assertion. Call me slow on the uptake, but I don’t see a clear relationship between how CSB’s administration “deals with global leaders” and selling fruit to mainland China. You’ve made no point whatsoever. Please tell us, just how is it that CSB’s administration is any different in “dealing with global leaders” compared to previous administrations? How, if at all, is this relevant to selling guavas on the mainland?

[quote]We disagree, that’s great! However, I feel no need to call you or your contrary ideas pejorative names.

I wonder why you feel the need to?
:s[/quote]
Where have I called you or any ideas you’ve expressed a “pejorative name”? Is this your usual approach? Make exaggerated assertions with no evidence to support them, and then when someone calls you on it, ignore that they have done so and play victim?

13

Relevance? No ROC leader has made an official state visit to the US for more than 25 years. Perhaps you’ve been asleep for the past 25 to 30 years, so I’ll clue you in: the ROC hasn’t had official relations with any “world leaders” since December 31, 1978.

[quote]Rather than just attack me why not offer some evidence to dispute my assertions. State your case, make a point, something.
[/quote]
Again, what are you on about? You come on here asserting that “the funadamental problem” is that CSB’s administration can’t deal with “global leaders,” yet you offer no evidence to support such a sweeping assertion. Call me slow on the uptake, but I don’t see a clear relationship between how CSB’s administration “deals with global leaders” and selling fruit to mainland China. You’ve made no point whatsoever. Please tell us, just how is it that CSB’s administration is any different in “dealing with global leaders” compared to previous administrations? How, if at all, is this relevant to selling guavas on the mainland?

[quote]We disagree, that’s great! However, I feel no need to call you or your contrary ideas pejorative names.

I wonder why you feel the need to?
:s[/quote]
Where have I called you or any ideas you’ve expressed a “pejorative name”? Is this your usual approach? Make exaggerated assertions with no evidence to support them, and then when someone calls you on it, ignore that they have done so and play victim?[/quote]

You are so obviously looking for a fight and I am just not going to give it to you.

Try somebody else cuz I am just not taking the bait.

14

[quote]http://www.taipeitimes.com/News/archives/2005/07/31/2003265779

The apparent enthusiasm of some Chinese Nationalist Party (KMT) politicians for opening up a fruit brokerage in China has drawn criticism from the pan-green camp, which claims that the KMT politicians involved have only their own interests in mind, and not those of local farmers.

A local Chinese-language newspaper reported yesterday that members of the KMT are planning to establish a wholesale fruit business in China – a claim that the party denied.[/quote]
The Green attack machine is at it again. The KMT is interesting the fruit sale because they plan to line their own pockets. My words…does the Green attack machine ever do any fact checking before hurling allegations.

15

Regardless of which sde of the political fence one sits, how can Lien negotiate anything like tariffs/taxes with the mainland?

16

I’m having serious trouble understanding the issues here - I really can’t see what the argument is about.

As I understand it, Taiwanese fruit farmers have always been able to export their produce to HK & China. China has recently announced that they are removing (reducing?) tax/tariffs on fruit imported from Taiwan. Good news for Taiwanese farmers and Chinese fruit eaters.

That the Taiwanese and Chinese governments haven’t signed any document to formalise this seems wholly irrelevant. It would be nice to have something on paper, but in the absence of this the farmers can still trade. So, what’s the problem? Am I missing something?

17

I too do not see the problem. You can sell a Taiwanese scooter in China, but not Taiwanese fruit. Discuss.

18

Southern farmers are one of the primary voting bases for the pan-Green. If the farmers start having direct contact or have a positive view of the PRC it weakens and invalidates some of the pan-Green arguments used during campaigns to garner votes.

So the typical argument of PRC is bad, thus WSR on Taiwan are bad, and on the side note the pan-Blue are bad, might not make sense, if farmers start viewing PRC as good.

Given how easily the CCP on the mainland has been manipulating the politics on Taiwan this year, I sometimes wonder do people know what they are talking about on Taiwan when they say stuff like “Only when PRC becomes a democracy…”

19

If the Greens ask their supporters not to sell fruit to China but to starve for their ideals, they will look bad. If they support the Blues in this, they will look like they have caved in. Whatever they do they’re fucked. Best thing to do is shut up and move on to the next issue. I don’t think it’s going to work if they say everyone except fruit farmers can benefit from trade between China and Taiwan.

The Greens need to have a plan for how Taiwan is going to be a successful economy without merging econmically (if not politically) with China. If they have articulated this plan, where can I read about it? I would imagine tourism plays a big part, presumably a large number of PRC tourists are envisaged in this new individual visit scheme a la Hong Kong?

20

But that’s the thing - you can sell fruit … so what are they arguing about?

Well, yeah I understand that it is a politically sensitive issue - I’m just trying to find out if there is any substance behind the political bitching; what are the KMT claiming that the DPP should be doing? What are the DPP bitching about? I know that most political arguments have little substance to them, but this one seems to be completely vacuous.

Anyway, China has dropped its tariffs without forcing any concessions from the DPP … which is a win for the Taiwanese government, no?