The big issues facing Taiwan today

So another election is near, but are the big issues facing Taiwan today and how rival politicians/parties aim to address such issues really being debated? Of course, there’s always posturing over how to deal with China but that’s a bit of a red herring as the so-called status quo will likely survive for another several decades regardless of which party is in charge. De-jure independence which is the holy grail for many of you just ain’t happening anytime soon. And we can argue that all we want which of course we have on this forum.

Meanwhile, Taiwan’s competitiveness in the global economy just keeps on slipping. Companies unable to climb the value chain in the face of global competition, stagnant wages which is related to the first point, an ageing society with low birth rate, eroding regional competitiveness against places such as China, Korea, Japan, etc. And of course how to deal with China.

Ma thought the answer was closer ties with China but the citizens have mostly rejected that. But, now what? Taiwan is fortunate in that in has a high base of wealth built from the 1970s to 1990s so a slow decline is not obvious to see. But if Taiwan can’t up its game and other countries are advancing more, what will become of it in 20-30 years?

[quote=“fanglangzhe”]So another election is near, but are the big issues facing Taiwan today and how rival politicians/parties aim to address such issues really being debated? Of course, there’s always posturing over how to deal with China but that’s a bit of a red herring as the so-called status quo will likely survive for another several decades regardless of which party is in charge. De-jure independence which is the holy grail for many of you just ain’t happening anytime soon. And we can argue that all we want which of course we have on this forum.

Meanwhile, Taiwan’s competitiveness in the global economy just keeps on slipping. Companies unable to climb the value chain in the face of global competition, stagnant wages which is related to the first point, an ageing society with low birth rate, eroding regional competitiveness against places such as China, Korea, Japan, etc. And of course how to deal with China.

Ma thought the answer was closer ties with China but the citizens have mostly rejected that. But, now what? Taiwan is fortunate in that in has a high base of wealth built from the 1970s to 1990s so a slow decline is not obvious to see. But if Taiwan can’t up its game and other countries are advancing more, what will become of it in 20-30 years?[/quote]

Most Taiwanese are very concerned with KangXi Lai Le finishing. Its Taiwan’s number one cultural export and the cornerstone of Taiwan’s soft power in the Chinese speaking world. It also brings in a lot of tourist money. Taiwanese are also very worried about not having anything to watch on television anymore.

Not joking about the above at all. Think as many Taiwanese are as concerned with that, as the coming election

Taiwan isn’t that wealthy it’s just got low taxes and relatively
Low housing costs and medical costs which are often shared between families.
Most people are getting by with a little bit of savings that’s about it I guess. The average earnings are something like 1000 used a month across the country.

m.youtube.com/watch?v=TLGxclwAKDo&feature=share

This thread had more details.

Average pay 37k/mth so median must be a bit lower. Taiwan is a tough place to raise and afford kids, most families have to pay 17k a month for each kid in kindergarten for example. You don’t get much help so that’s why the the number of kids is plummeting.

theres massive income gaps in Taiwan now, civil servants can retire on 70k a month and regular workers retire on next to nothing. That’s why you see all those hiking shops
Looking for the silver dollar but then you still see old people out scrounging for recycling material.

There’s loads of people in Taipei who are asset rich and income poor, you see them living in apartments worth 700,000
Usd and eating 100 ntd bian dangs for dinner.
Taipei also has a lot of wealthy folk.
But outside of Taipei and Hsinchu it can get poor pretty quick
.

Basically you can’t say there are big issues facing Taiwan as a single entity because it’s full of disparate interest groups. There’s a group that is happy to have pollution because they can make money from
Industry. There’s a group happy to have high pensions for themselves. There’s a group that is happy to have high house prices.
The oldies down want to pay more tax to contribute to better education. The stock holders done want to pay capital gains tax. Taipei city gets more government revenue than New Taipei City. The poorest cities and counties get the least
Government revenue allocated to them. Then there are groups that are not happy. The people in Taipei are happy together to get cheap electricity from down south. Half the people in Taichung want to expand the industrial zone, and the other half hate it. Hotel
Owners and tour operators make money of the Chinese tourists, and other people resent the Chinese influence.
They don’t have anything in common. They don’t give a shit about each other!

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Taiwan is going to continue skating by being one of the most lucky places to live in the world. People make enough to get by in life as good or better than most places in the world. It’s still a Tiger, maybe smaller and partially hidden and out of the limelight, but still a tiger.

The big issues facing Taiwan are only one issue, and that is China, which really won’t be an issue for years to come. Economics won’t be an issue for Taiwan for a LONG time. It’s just too strong and unique in some critical areas that count to the big powers in the world.

The big issues facing Taiwanese people are 1) obtaining an adequate income and 2) having an opportunity to excel to a superior income, which the federal and local level still don’t excel at by providing that opportunity even though they throw billions of NT$ at all types of businesses.

And perhaps the biggest issues, which isn’t tangible, is the sense of personal and international identity, which too many times I have witnessed Taiwanese people weep about having a lack of.

Taiwan is no tiger. Singapore and Korea, they are tigers. Just visit them you can smell the money.
Taiwan is an industrial backwater, a few brights spots in the blighted countryside of the west coast with a bit of money socked away every year. It’s just kind of moseying along.
I agree it lacks direction and there’s not enough reasons to get together and party nationally or in the cities, a bit more buzz wouldn’t go amiss.

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Housing and medical are 2 of the biggest costs in any household. To have them so affordable is a great feat.

[quote=“headhonchoII”]Taiwan is no tiger. Singapore and Korea, they are tigers. Just visit them you can smell the money.
Taiwan is an industrial backwater, a few brights spots in the blighted countryside of the west coast with a bit of money socked away every year. It’s just kind of moseying along.
I agree it lacks direction and there’s not enough reasons to get together and party nationally or in the cities, a bit more buzz wouldn’t go amiss.[/quote]

Ok, Taiwan is the backbone of the Tiger. If Taiwan disappeared tomorrow, the whole freagin world would gasp, including the big powers like USA and Europe, whose defenses rely upon the simple little computer chips only produced in… Taiwan.

You hear a lot about that and other civil service benefits, i.e. the high interest savings accounts on the news. But who actually gets these relatively high pensions and other benefits? Civil servants who were hired before 1995 and did not get the high salaries you can still hear people talk about when referring to Taiwan’s boom years. Also, actual workers and farmers do have sufficient pensions and social security in their respective social security systems.

Who is missing out right now and has to get by on low pensions or no pensions are greedy white collar staff who cashed in during the boom years but did not make arrangements for old age. While Taiwan had no comprehensive pension scheme for non-civil servants at that time, nobody would have stopped these white collar staff from getting a private pension fund and use part of their high salary to pay for it. But people simply thought the economic high times would continue. Well too bad they didn’t.

Nuclear power should be one of the biggest issues. Taiwan is energy poor - no offshore oil, coal, natural gas or other reserves to tap, so fossil fuels are 100% imported. That makes Taiwan very vulnerable to any interruption in supply caused by wars in the Middle East and so on. Hydropower is the one indigenous source of electricity, and has the added benefit of being (more or less) “green,” but there is only sufficient capacity to supply about 5% of total demand.

Which brings us to nuclear, which supplies around 20% of Taiwan’s electricity demand. But it is aging infrastructure, built in the 1970s, and nearing the end of its 40-year operating license. In a sane world, Taiwan would be building new nuclear power plants as the old ones are shut down, and moving to 4th generation designs to solve its waste problem. Instead, the greenies have taken over the argument and plan to shut down the whole industry, replacing it with intermittent toy solar and wind power, which means we can look forward to brownouts, blackouts, and a declining economy. Or else we can go back to coal, which in turn means putting up with a lot of pollution, plus the fact that much of that coal will come from China, which opens up another avenue for Chinese pressure for reunification.

In my opinion, Taiwan’s green movement (which includes many foreigners here on Forumosa) is totally clueless about technology, but very convinced of its own righteousness. It’s basically a religion. Well, at least they can burn their “No More Fukushimas” signs for cooking - that’s one major source of energy right there.

You hear a lot about that and other civil service benefits, i.e. the high interest savings accounts on the news. But who actually gets these relatively high pensions and other benefits? Civil servants who were hired before 1995 and did not get the high salaries you can still hear people talk about when referring to Taiwan’s boom years. Also, actual workers and farmers do have sufficient pensions and social security in their respective social security systems.

Who is missing out right now and has to get by on low pensions or no pensions are greedy white collar staff who cashed in during the boom years but did not make arrangements for old age. While Taiwan had no comprehensive pension scheme for non-civil servants at that time, nobody would have stopped these white collar staff from getting a private pension fund and use part of their high salary to pay for it. But people simply thought the economic high times would continue. Well too bad they didn’t.[/quote]

The pensions schemes you say are good are something like 6,000 to 20,000 a month. I wouldn’t call that good. As for ‘greedy white collar workers’…not sure where all that stuff comes from.
Theres a massive wave of retirees with juicy pensions coming now, watch them suck more money out of the system. This is one fundamental economic problem.
Another fundamental problem shared by all is pollution, caused by energy choices and proximity to China.

[quote=“headhonchoII”] As for ‘greedy white collar workers’…not sure where all that stuff comes from.
Theres a massive wave of retirees with juicy pensions coming now, watch them suck more money out of the system. [/quote]

I remember companies paying 5, 10 or even 12 month bonuses during the 1990s and early 2000s. College graduates in the 1970s, 80s and 90s did not want to work for the government as the salary was considered low. It’s only now in less prosperous times that society takes an interest in the pension benefits of civil servants. I can even see that happening among relatives: the uncle who used to get nice pay checks as a manager for a tech company and never bothered to get into a private pension scheme is now envious of his civil servant sister. Really funny, considering that the sister’s relatively lower pay used to be a frequent topic on dining table whenever that show off visited.

In general, middle aged and senior Taiwanese park their money in real estate, and we all know that’s not really generating anything useful. Middle aged people do that because they’re content with what they have and do not wish to pay for other people’s children’s employment.

If you can extract the wealth parked in real estate and put it into meaningful R&D in all sectors, you can get out of stagnation.

But first of all you’d need to stop investing in China, because you loose your wealth by wiring money into China. Overall, you don’t get anything back, and don’t forget the opportunity cost.

[quote=“tango42”][quote=“headhonchoII”]Taiwan is no tiger. Singapore and Korea, they are tigers. Just visit them you can smell the money.
Taiwan is an industrial backwater, a few brights spots in the blighted countryside of the west coast with a bit of money socked away every year. It’s just kind of moseying along.
I agree it lacks direction and there’s not enough reasons to get together and party nationally or in the cities, a bit more buzz wouldn’t go amiss.[/quote]

Ok, Taiwan is the backbone of the Tiger. If Taiwan disappeared tomorrow, the whole freagin world would gasp, including the big powers like USA and Europe, whose defenses rely upon the simple little computer chips only produced in… Taiwan.[/quote]

You do realize those chip fabs are full of production equipment engineered in the US and Europe?

And that they are staffed by Filipino technicians to keep costs down?

And that Taiwanese chipmakers ship off entire production lines to Mainland China as soon as Taiwanese law allows them to?

There’s nothing in Taiwan that couldn’t be recreated in Mainland China, or pretty much any country with a stable power and water supplies …

[quote=“monkey”][quote=“tango42”][quote=“headhonchoII”]Taiwan is no tiger. Singapore and Korea, they are tigers. Just visit them you can smell the money.
Taiwan is an industrial backwater, a few brights spots in the blighted countryside of the west coast with a bit of money socked away every year. It’s just kind of moseying along.
I agree it lacks direction and there’s not enough reasons to get together and party nationally or in the cities, a bit more buzz wouldn’t go amiss.[/quote]

Ok, Taiwan is the backbone of the Tiger. If Taiwan disappeared tomorrow, the whole freagin world would gasp, including the big powers like USA and Europe, whose defenses rely upon the simple little computer chips only produced in… Taiwan.[/quote]

You do realize those chip fabs are full of production equipment engineered in the US and Europe?

And that they are staffed by Filipino technicians to keep costs down?

And that Taiwanese chipmakers ship off entire production lines to Mainland China as soon as Taiwanese law allows them to?

There’s nothing in Taiwan that couldn’t be recreated in Mainland China, or pretty much any country with a stable power and water supplies …[/quote]

You’re missing the part where production engineering comes in to play. Machinery and equipment does not give you the yield that’s meaningful. Without the yield, your customer will get a lot of DOAs, and you won’t get another order ever again. (Unless you’re Samsung, which is vertically integrated all the way to Bestbuy and Costco.

Actually without the yield, you don’t have a product. You have a prototype that sometimes works.

You could have all the power tools you can find in HomeDepot, but what does that make you?

Those companies throw off some cash but there’s only a few REALLY profitable electronics biz in Taiwan; TSMC is a behemoth, mediatek is doing well, and some of the component makers like largan. Most of the other players just scratch by on to tiny margins and yes can be easily replicated or moved to China. They don’t actually
Have to move to China anyway because costs are already quite low in Taiwan. The concern now is that mainland Chinese companies have created their own supply chains elbowing out some Taiwanese companies. In the end I’m not sure if that is a problem for the average Taiwanese.

I foresee a loud sucking sound from Taipei and tumbleweeds blowing around Taoyuan Aerotropolis.

That would be a fairly big issue.

Ironically this was the basis of Sun Yat-Sen’s original tax policy for the Republic of China; all taxation would be taxation of land ownership.

Ironically this was the basis of Sun Yat-Sen’s original tax policy for the Republic of China; all taxation would be taxation of land ownership.[/quote]

Under the current system, taxing land ownership would hurt the wrong people, i.e. families who 40 year ago purchased a concrete slab gongyu in downtown Taipei. At time of construction that was considered middle class. Yet due to the current speculation and bubble, that gongyu is worth 30+ million NTD.

Land ownership in Taiwan should not be taxed but outlawed as it does not serve the interest of the public and in many cases not even the interest of the land owners, but makes them a pawn in land speculation of developers. Having a square mile of land divided in tiny lots does not make re-development easy and leads to situations where a minority can terrorise the majority of people who do wish for renewal of their neighbourhood. Land ownership is also what makes real estate so expensive. If developers were paid for developing / construction plus a profit margin and land was owned by the government, real estate valuations would look quite different. Given the scarcity of usable land, government should ensure that it serves the interest of the public. That would also include doing something about anyone illegally privatising already public land, such as simply building an addition to their home or using the sidewalk as a shop extension. Sadly however, the average Taiwanese will not understand that he has nothing to gain from private land ownership. Maybe the average Taiwanese should also stop complaining about unaffordable housing.

Ironically this was the basis of Sun Yat-Sen’s original tax policy for the Republic of China; all taxation would be taxation of land ownership.[/quote]
It has nothing to do with Sun Yat-Sen and I personally don’t care about ROC. What the DPP will implement is a Property Gain Tax and Property Tax based On Fair Market Valuation. But the latter could be implemented even at the municipal level. I’ll not tax senior at FMV if that property is his/her only property, but anything else is FMV taxed.

But wait, I’m not even talking about taxation.

I’m talking about better lending and borrowing by financial institutions. Say, I pass a special law or regulation that curtails lending to Commercial Housing Construction, that will result in buyers/speculators/investors using their own money to fund the construction. Which is parking, yes. But here’s the catch, I will not restrict lending money for “repair and renovation.” which will massively increase GDP and urban renewal, resulting in better quality of life and more efficient economy due to more efficient use of real property. You know, for rental etc.

Here’s the gold. I will concurrently pass a special law or regulation to facilitate Equity Take Out Mortgage to be invested in startups and commerce.

You park, I extract.

If you know taiwane legislators the above is just fantasy talk. These guys are just trying to pass the usual crony bills before they get thrown out, they are cancelling the capital gains tax again.