Last Thoughts on Taiwan

I’ve had this sitting in an unfinished draft on my computer for several weeks now. I figure I should get it up and out before I get any farther in Asia. I don’t want to get more than one country behind or I start to forget to much.

As I noted when I arrived in Taiwan, it is the first country I’ve visited on my trip which I have previously visited. As such, my thoughts on Taiwan aren’t just what I think of the place, but also what I think of the changes in the eight years since I was last there.

Changes

The biggest change I noticed in Taipei was the traffic. When I was last in Taipei, the metro hadn’t yet opened and the thing I remember most of Taipei was the streets jammed with scooters and taxis. There were very few private cars. I remember taking a photo at the time of an intersection which must have had about 100 scooters.

Scooters are still the most popular mode of transportation in Taipei, but there doesn’t seem to be as many as before. Likewise, there are more private cars, pretty much all of which are new and nice. Overall, the traffic in Taipei seems much lighter and the city seems cleaner. Not only is that a function of less traffic, but I think the scooters have gotten cleaner. The newer scooters have four-stroke engines instead of older, dirty two-stroke engines.

I really liked the Taipei metro. Along with Singapore, it one of the best I’ve seen in the world so far. It was very easy to navigate even if you don’t know Mandarin.

When I last spent a week in Taipei, I still felt as if I didn’t know the layout of the city. Now I feel as if I have a good idea of how it works.

The other big change I noticed is the use of English in the population.

In 1999, other than the people in the office I was visiting, I met no one who knew English. This time, about half the people I met in stores and restaurants were able to carry on a reasonable conversation in English. All of those people were probably under the age of 20. Almost everyone at the hostel I was staying at was there to teach English overseas. English has been a high priority for Taiwanese education. In addition to teaching it at school, there are also conversation schools which teach English to students, English schools for little kids, and English schools geared towards business professionals. I even read that there was discussion to make English one of the official languages of Taiwan (along with Mandarin and Taiwanese). I don’t know if they ever did it, but it gives an indication of how high of a priority they have given English instruction.

The Future

I had the pleasure of having dinner with Aaron Mowrey while I was in Taipei. Aaron was a debate coach in Minnesota when I was involved with debate, and he was the first person I’ve seen since I’ve started my trip that I knew before the trip started. He is studying in Taipei on a fellowship from Yale.

We discussed the future of Taiwan, the economy, and how it is doing compared to the rest of east Asia.

One of the things we discussed was the thing which is sort of always hanging over any discussion of Taiwan: relations with China.

Just in case you are not familiar with the history of Taiwan, let me give you the brief, 20 second history. At the beginning of the 20th Century, China is technically still an empire with an Emperor, with European countries heavily influencing the country. A revolutionary leader by the name of Sun Yat-Sen overthrows the Imperial government and establishes the Republic of China. Sun Yat-Sen dies in the 1920s and his replacement is a young Chang Kai-Shek.

During the 20s and 30s, rebel communist groups are active in the hinterlands. Later in the 30s, the Japanese invade Manchuria. The Republican forces are overwhelming compared to the communists, but the communists, under Mao Zedong, use the war, a large amount of Soviet assistance and some very clever tactics to eventually route the Republicans and send them fleeing to the island of Formosa. The government on Formosa continued to keep the Republic of China (RoC). The leadership was the same, the flag was the same, and they continued to be recognized at the legitimate government of China by most of the world after WWII.

The obvious problem was that they did not control a land mass the size of the United States and billion people. Eventually, reality gave in and in the early 1970s, the Peoples Republic of China (PRC) was recognized by the US and was given the seat that the RoC had on the UN Security Council.

The end result of all of this is that today, Taiwan is sort of in a diplomatic no-man’s land. Very few countries formally recognize Taiwan as China. Those that do are usually tiny nations like the Marshall Islands. The US has to go through some diplomatic contortions to work with Taiwan. They don’t have an embassy in Taiwan, but there is a “non-governmental organization” made up totally of “former” State Department officials who work on visa and passport issues. Officials that resign from the State Department to work there do not have that time count against them for seniority or retirement. Got that?

Everywhere I went in Taipei you would see signs advocating Taiwanese membership in the UN. Taiwan has backed away from claims of being the government of all of China and have been moving to just claiming to be the government of Taiwan. However, they have not declared themselves independent. The PRC still considers Taiwan to be part of China. If Taiwan declares themselves independent, China has said they would invade. The US has said they would defend Taiwan.

It has been a potential mess in the making for decades.

Personally, I think the odds of a war happening over Taiwan are small. There are several reasons for this:

• if it was going to happen, it would have happened under Mao. Much more is at stake now and the Chinese and Taiwanese leaders seem more rational.
• China has more to lose now that it is more tightly integrated into the world economy. While Taiwan is important, the implications of an embargo or sanctions could crush the Chinese economy. It is much easier for western nations to find low cost supplies of products than it is for China to find new buyers.
• Relations have been improving between Taiwan and China. While I was in Taiwan, the communist party had their congress in Beijing. Hu Jintao announced he would be open to talk with Taiwan. China has proven they can think long term with Hong Kong, I don’t see why they can’t wait out Taiwan, especially since they can do business with them in the mean time.
• An invasion would destroy Taiwan which would defeat the purpose of invasion.
• A move towards independence would risk Taiwanese assets in China. Even if China didn’t invade, they could seize Taiwanese assets and stop trade and investment. Taiwan has an enormous amount at stake in China economically and it would cripple them if they announced independence.
• A personally think that a Puerto Rico solution might be the end result. Puerto Rico is part of the United States, yet they pretty much run their own show, have their own olympic teams, etc. I could easily see a compromise where Taiwan is part of “China” (whatever that means) yet they have their own government, own currency (like Hong Kong), own olympic team and military. They would send advisors to Beijing (like Puerto Rico has representatives in Congress who don’t vote), perhaps have some officials at the UN in a non-voting status, have joint military exercises, etc.

If this issue can be resolved peacefully (and it is in the interest of all parties to do so), there is really no reason for armed conflict between the US and China, who are a world apart. While I don’t think the probability of a conflict it high, I do think it is one of the most important areas for future diplomatic efforts.

Economy

Aaron pointed out how the Taiwanese feel like they are slipping economically, especially compared to other Asian countries, specifically South Korea. I certainly don’t see any signs of slippage from the changes I’ve seen over the last eight years. While other nations have caught up to Taiwan, I don’t think it means that Taiwan has gotten any worse.

The most important industry in Taiwan seems to the computer electronics industry. Unlike Japan or Korea, much of the industry in Taiwan seems centered around personal computers, in particular processors, memory and laptops. If you have a laptop, there is a good change it was manufactured in Taiwan, regardless of the brand.

The problem is, the industry has pretty much become a commodity business. There is only one Taiwanese brand I can think of and that’s Acer. Acer isn’t really what you’d call a high end brand. Certainly not thought of in the same way as a Samsung, Sony, or Apple. Taiwan needs to start moving up the food chain. The business they had being the location of preference for manufacturing is quickly being taken over by China. They need to focus more on creating strong brands, design, and engineering. Basically, get out of the commodity business or find a way to de-commodify what they do.

Taiwan also needs to figure out how it fits into the rest of China. China already has two strong finance centers in Hong Kong and Shanghai. I think Taiwan’s best bet would be to become the Silicon Valley of China. China has the finance and manufacturing in place. What they need is place for entrepreneurs to flourish. While many businesses are starting right and left in China, being on an island away from the mainland and outside of the control of the PRC makes it an ideal candidate for being the Chinese launching pad for new ideas and entrepreneurs.

I really enjoyed Taipei. I was there a week longer than I had originally planned because I found it such and comfortable place to be. It will be interesting to see how it compares to Hong Kong and mainland China.