OPINION: China's '31 Incentives' Should Be a Wake-Up Call for Taiwan

OPINION: China's '31 Incentives' Should Be a Wake-Up Call for Taiwan
Photo Credit: Shutterstock / 達志影像
What you need to know

China's lures fuel a sense of insecurity in Taiwan, but many resolvable economic and societal problems lie closer to home.

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China’s "31 incentives" – a policy aimed at attracting Taiwan's professionals through access to mainland cultural industries and university research funding – have provoked heated debate and accusations of attempts to accelerate the ongoing brain drain, but Taiwan itself may be equally complicit in its own loss of professional and academic talent.

Some media organizations have painted those who head to China as greedy, turncoat opportunists. The government itself has wagged its finger at Taiwanese professors, warning them that it is illegal to take up teaching positions at Chinese universities or to apply for government research grants, but thousands are already there, and more are certain to follow. If nothing is done, professionals will leave to find greener pastures in China or elsewhere.

These accusations might have held water when aimed at entrepreneurs who precipitated the gutting of domestic manufacturing decades ago. They are more problematic when leveled at homegrown doctorates, thousands of whom are unable to find work due to shrinking enrollment and campus closures. Those lucky enough to be given a rare teaching position are overburdened and underpaid.

If Taiwan continues to view China as the sole culprit of its economic stagnation, it not only limits discussion of solutions needed to confront Taiwan’s societal malaise, but also puts Taiwan firmly in the backseat of its own economic and political destiny.

Existential crisis masks failure to address fundamentals

China’s incentive packages represent an existential crisis in Taiwan: China, a once-backwards hinterland economy of low wage, low skill jobs is now seeking to attract high level professionals with better wages and prospects for career development.

In the dog-eat-dog world of economic globalization, competition happens uninvited. States are increasingly becoming uneven platforms that cater to investors rather than the welfare of citizens.

Politicians and thought leaders need to address Taiwan's brain drain as a broader symptom of state failure to address the extremely disruptive effects of economic globalization. It needs to move on from asking why thousands of young professionals are swayed by China’s carrots to formulating a plan to retain them on the basis of responsive public infrastructure and economic security.

Such a project will require reinvention the likes of which Taiwan has not seen since its rapid post-war industrialization. In contrast to the 1960s and '70s, the state will no longer play a central role in directing that change. It will require greater input from civil society, which provides the greatest advantage Taiwan has over its much larger neighbor.

Tug of war over talent: is it a zero sum game?

It would be a mistake to paint Taiwan as outside the global trade system despite repeated attempts by China to suppress its visibility on the world stage.

Call it greed or call it ingenuity, millions of Taiwanese participate in a political economy dictated by capitalists who have gutted the island’s manufacturing and transplanted it to China, in the process precipitating China’s rise as the world's factory.

電子代工廠_深圳
Photo Credit:Steve Jurvetson@Wikipedia CC BY 2.0
Many of Taiwan's factory jobs have moved overseas.

The brain drain and hollowing out of industry has been endemic for decades. Past policies such as “No Haste, Be Patient” and both the old and new "Southbound" redirection of capital cannot block or redirect these flows overnight.

As the country enjoying the second-largest trade surplus with China (40 percent of exports still head across the Strait), Taiwan needs to pinpoint and leverage its strengths in light of the 31 preferential policies.

Erecting barriers to trap or shame local talent will only increase Taiwan’s economic woes.

China’s competitive edge in scale should not dampen confidence in Taiwan’s unique political and social system that prides itself on diversity, openness and adaptability. Those distinctive qualities are Taiwan’s comparative advantages, and give it a head start in creativity and ingenuity based on open informational flows. But erecting barriers to trap or shame local talent will only increase Taiwan’s economic woes. Rather than penalize professionals who seek to stake their chances across the Strait, we should be finding both short and medium solutions to bring them back.

Taiwan exacerbates the brain drain to China with restrictions on Taiwanese who obtained academic credentials there, many of whom desire to return but are prevented from doing so because of archaic regulations. It should join the rest of the world in recognizing accredited Chinese institutions to mitigate the effects of professional brain drain.

Longer-term solutions need to start with drastic changes to the lingering aftermath of sustaining Taiwan’s export-oriented economy, including strengthening the bargaining position of labor and creating a more friendly environment for raising children.

From corporate welfare to social welfare

Taiwan’s ruling elite know that the dropping birthrate is a national security problem but they seem oblivious to the fact that people need more than a few meager stipends to spur the creation of new families.

Leaders of all political persuasions have played mere lip service to the plight of Taiwan’s working class.

Unfortunately, leaders of all political persuasions have played mere lip service to the plight of Taiwan’s working class, at times chastising them for complaining too much. Failure to improve overwork and stagnant wages will mean greater attrition to other economies, not just China, which can offer better prospects. They scuttle and smother innovation more effectively than Xi Jinping Thought.

To increase birthrates, the Taiwanese workforce needs better wages, guaranteed family leave and less grueling work hours (i.e. learn from France).

With the trend of stagnant wages continuing unabated, the traditional one parent breadwinner model has long given way to dual income households. Female work participation in Taiwan is rising, but existing barriers must continue to be removed if people are to have the financial security needed to start families. The government therefore needs to better support dual income families, and it needs to pave the way for legislation that expands the definition of families to broaden the amount of support parents can receive.

For these policies to work across sectors, the government has to work with businesses by rewarding good parental leave policy with tax credits and investment opportunities. Companies that sustain Taiwan’s societal structure should be rewarded and given more opportunities – they must work for access to public resources.

Don’t wait for a party

The recent past has shown us that government is only part of the solution and is at times the source of intransigence.

The current administration has waffled on labor policies, arguing that it had to pursue pragmatism in its workweek reforms. They continue to be led by cost-down mantras that not only make the population and economy more vulnerable to cutthroat competition, but also lead us down a path of long hours and low innovation.

If government is in bed with business interests, citizens themselves must take action. Traditional party politics have atrophied and smothered previous citizen-led movements. There is a solution, however: Taiwan has a vibrant internet culture and burgeoning labor consciousness: the two can foster digital activism to confront the lack of institutional support in the face of an increasingly precarious working environment.

Also instructive are social movements in the United States and Europe that have provided the institutional grounding needed for the gig economy and labor unfriendly workplaces. They have produced tangible results that show how grassroots movements can precipitate national change to balance the playing field and hold corporate interests accountable to those who toil.

Taiwan’s Sputnik moment

Existential threats can be useful with a healthy dose of self-reflection. When the USSR launched Sputnik in 1957, the United States found its scientific infrastructure woefully ill-positioned to mount a competitive response. The soul searching became a catalyst for wide ranging reforms in revamping education that paved the way to huge strides in science that would allow the U.S. to compete and later win the space race.

If we can begin to entertain the possibility that the economic woes of today are partially Taiwan's own creation, we are more likely to generate the direct and wide-ranging policies needed to address them.

They require rectifying Taiwan’s structural problems, creating the conditions that will allow the country to adapt and harness homegrown innovation while attracting talent from abroad with its openness for change and democratic governance.

Read next: Yes, 'Death by Overwork' Is a Real Thing in Taiwan

TNL Editor: Morley J Weston