Taiwan's discontent runs deeper than cross-strait trade pact

Youth protests were spurred by more than just trade pact with the mainland, and had substantial support from across island

PUBLISHED : Saturday, 26 April, 2014, 5:30am
UPDATED : Saturday, 26 April, 2014, 5:30am

This semester, Reggie Wang, a senior at Soochow University in Taipei, has been studying Taiwan's fast-thawing relations with the island's old foe, the mainland.

Outside of class, the 23-year-old was watching for any backroom deals between Taipei and Beijing. He was one of several thousand students drawn to a nearly month-long protest this spring at Taiwan's parliament.

"I'm here to oppose economic regulations with political intent, and affairs taking place in a black box," he said. Above his tent flew a banner calling President Ma Ying-jeou a "bumbler".

Wang joined a wide range of Taiwanese youth furious that their government had prepared to ratify a service-trade pact with China that they feared would eliminate jobs and imperil small businesses. Officials said that more jobs would be created than lost.

"If the service trade deal passes, a portion of people will face a lot of investment coming in here from mainland China, and that's a big hit to small or medium-sized enterprises," Wang said.

The trade pact - billed as a way to stimulate the economy - sparked huge protests. But many people also joined in because of a wider dissatisfaction with Ma's administration.

Last year, Taiwanese protested after an army conscript died taking part in strenuous drills in the searing heat.

Meanwhile, tens of thousands of anti-nuclear activists realised after a year of mass demonstrations that the government intended to pursue a fourth power plant.

Entry-level workers have griped since 2000 that wages are rising too slowly, despite a 7.48 per cent rise in Taipei housing prices in 2012.

Some protesters think Ma's 21 deals with Beijing have paved the way for unification with the mainland, sacrificing Taiwan's self-rule. The agreements cover trade, transit, investment and economic co-operation. Ma rejects any link between the agreements and unification.

"The demonstrators obviously have little regard for the Ma administration, and this was as much a manifestation of that as anything related to the service-trade agreement," said Alan Romberg of the Stimson Centre, a Washington think tank.

Beijing has claimed sovereignty over Taiwan since the Chinese civil war of the 1940s, and not renounced the use of force, if needed, to bring reunification. Since Ma took office in 2008, the two sides have laid aside political differences to build trust through economic co-operation.

In March, Taiwan's ruling KMT approved the pact. Ma's government has said that the service-trade pact would stimulate Taiwan's service sector - 69 per cent of the economy - by giving banks, tour operators and health-care firms broader access to the mainland market. It would also invite new mainland investment in Taiwan.

Ma says Taiwan needs more trade deals with the mainland to compete with Asian peers such as South Korea and members of the Association of Southeast Asian Nations.

"We do not agree that the Executive Yuan should withdraw the agreement," Ma said in March, referring to Taiwan's cabinet. "Otherwise, the harm caused to Taiwan would be too great."

Investment bank analysts have said the pact would allow major firms to expand, in turn creating employment. Opponents, though, said negotiations weren't transparent.

The recent protests, the worst unrest since Ma took office in 2008, began on March 18 when street demonstrators broke into parliament to occupy its main assembly hall for 24 days, stopping legislators from approving bills. The occupation spawned the March 30 demonstration, as well as a mass break-in of the premier's compound that ended in bloody clashes with police.

The occupation ended after the legislature said the trade pact's review would be delayed until an oversight mechanism for cross-strait deals was enacted.

"The students don't see a future," said Leonard Chu, a Chinese media studies professor retired from National Chengchi University in Taipei. "They don't think they will benefit from trade with China. Deep underneath is the poor economy."

Ma will now try doing a better job of selling the trade pact to a very sceptical public
Consultant Sean King

Taiwan's government forecasts 2.82 per cent economic growth this year. But the economy, the world's 26th largest, lags its export-reliant Asian peers including members of Asean, in trade deals with the mainland, the island government says. Taiwan wants a bigger share of that giant economy, while Beijing officials hope their vast markets might induce Taiwan to reunify.

Protesters said the government didn't share enough details about the service trade pact, though the economic affairs ministry published its full text and mainstream media had covered its highlights. Officials said liberalisation in 144 service categories would create jobs for Taiwanese, as laws limited the number of mainland workers.

"I don't think it's going to be anything that bad," said Wai Ho Leong, a senior regional economist with Barclays based in Singapore. "You can come up with policies to redistribute the benefits more evenly. For example, you can start a fund to finance or subsidise small or medium-sized enterprises who may have been marginalised."

But the trade deal is hardly the sole cause of the protests. Many citizens criticised the government's investigation after army conscript Hung Chung-chiu, 24, died days before his discharge. After bringing a smartphone with a camera onto a base without permission, Hung was placed in solitary confinement and then forced to perform drills in the summer heat. More than 100,000 protesters, some furious about Taiwan's compulsory military service, gathered outside the Presidential Palace in August.

The government's plan to proceed with a fourth nuclear plant has also enraged many.

The US$9.3 billion facility on Taiwan's north coast would reduce reliance on fossil fuel imports. But opponents say it poses a public danger. Hundreds of thousands of Taiwanese have demonstrated against the plant over the past three years, since the earthquake and tsunami in Japan caused a nuclear disaster there.

Officials have said they would be open to a voter referendum on nuclear power, but anti-nuclear activists say there are difficult legal barriers to getting it on the ballot.

The government has also rejected a legislator's 2012 proposal to meet opponents halfway by converting the nuclear plant to a thermal power facility.

Also festering is frustration with employment, particularly well-paid career jobs. The Council of Labour Affairs raised minimum wages 5.2 per cent from this year, but a study by investment bank DBS found that nominal wages rose an average of just 0.9 per cent per year from 2000 to 2010. The stagnation has prompted workers in their 20s and early 30s to put off marriage and save money by living with parents.

Anxiety about these issues fuelled the occupy parliament movement, swelling it into the tens of thousands on weekends, participants said.

"I'm most afraid of the future, Taiwan's future, whether it's the economy or work, because since Ma took office, too many strange policies have emerged," said protester Mai Po-chun, 28, a night-school student. "Today's issue is the service trade pact, but in the future I see a lot of cases like that. We have no sense of security with this government."

Ma may be the most frustrated of all.

His deals with the mainland pushed two-way trade to a record US$124 billion last year, increasing mainland visits from 290,000 to 2.8 million per year since 2008 and allowing 118 daily direct flights from none before he took office.

Mainland-Taiwan talks on lowering import tariffs on many goods are forthcoming. An agreement could reshape Taiwan's economy, as it relies largely on consumer electronics, machinery and petrochemical products.

Ma will not change course on his ambition to reconcile with the mainland, analysts predict, but will improve communications to help Taiwanese understand his intentions.

Cabinet spokesman Sun Lih-chyun said this month that the government was not reaching out in ways that younger people recognised, such as through mobile devices or social media.

Referring to the youth protests, Sun said: "This absolutely won't be the last time, we're going to see this sort of situation again, so we need to do an in-depth review. In terms of the internet, our young friends use a lot of new means of communications. When we got to those, it was too late."

The cabinet's pledge to review its public relations follows a survey by the National Development Council, which found that 46 per cent of Taiwanese supported the occupation of parliament, while 44 per cent said the service trade agreement would help the island's economy.

With Ma's relations with many voters in tatters, his Kuomintang party risks losing the 2016 presidential election to the opposition Democratic Progressive Party.

That shift in power could disrupt trade and economic momentum with Beijing because the opposition is more wary about ties with the mainland. Ma cannot run again because of term limits.

The KMT must also defend its majority in parliament that year.

"I think President Ma will now try doing a better job of selling the trade pact to a very sceptical public and a wary Legislative Yuan, but I don't think he'll back off it," said Sean King, senior vice-president with consulting firm Park Strategies in New York.

"Cross-strait integration is his legacy, and he'll want to sign as much as possible into law while he's still in office."

Student-led protesters say they're ready to hold public forums around Taiwan to keep pressure on Ma over the trade pact.

Legislators are looking for a date to hold a committee hearing on the trade oversight bill promised to protesters by the speaker. If the bill looks weaker than protest leaders want, or the deal is ratified without it, activists say another blow-up will follow.

Hsu An, 21, was camped in a lean-to outside a parliament gate in early April, having just completed his military service. He says he is ready to mobilise if protest leaders call for another mass action.