This column presents selected topics and trends viewed from the perspective of members of the Sumitomo Corporation Group working on the front lines of its global business network.
A little over three months have passed since the inauguration of Taiwan's President Ma Ying-jeou on May 20. Domestically, consumer prices have continued to rise, and both stock prices and the rate of support for the president, which peaked on inauguration day, have been on a downward course since then. But the new Nationalist (Kuomintang) administration is still enjoying a honeymoon in relations with China. The United States, which hopes for stability in relations across the Taiwan Strait, is generally pleased with the situation, and the start of direct flights between Taiwan and the mainland has buoyed the popular mood.
The authorities in Beijing have for the moment set aside talk of "one China," and their counterparts in Taipei have also been focusing on normalization in the economic sphere, which is easier to discuss. In this way, the new administration has gotten off to a smooth start with tentative moves toward rebuilding the bilateral ties that had been on ice for eight years under the previous Democratic Progressive administration. Attention is now focused on the question of whether Beijing will shift to a more accommodative stance toward Taiwan's quest for admission to the World Health Organization and its efforts to negotiate free trade agreements and broader economic partnership agreements with other countries.
On June 10, less than a month after Ma's inauguration, there was an incident in the waters near the Senkaku Islands (controlled by Japan but also claimed by Taiwan) in which a fishing vessel from Taiwan sank after colliding with a Japanese Coast Guard patrol boat. Rightists within the ruling Nationalist Party tried to fan popular anger over this incident, and the Taiwanese media carried sensationalistic coverage, but the affair was settled just 10 days later. And in August Ma selected John Feng, a member of his inner circle who advises him on foreign affairs, to be Taiwan's representative in Japan, a post that had been vacant since the time of the incident. Japan-Taiwan relations now seem to be headed in a positive direction.
During the election campaign Ma pledged to implement 12 "i-Taiwan" public construction projects to reinvigorate the Taiwanese economy. These involve a total of NT$3.99 trillion (about $130 billion) in government and private-sector outlays over a period of eight years. He also promised to achieve three numerical targets: 6% economic growth, $30,000 in per capita income, and 3% unemployment. The administration now faces the task of improving the economy in order to realize these pledges. In relations with China, key issues include relaxation or removal of the mutual restraints on investment and other controls on bilateral interaction. On the domestic front, meanwhile, the administration is working to boost the economy with tax reform, a four-year, NT$4 trillion investment package, and measures to promote new industries. But both the stock market and the president's approval ratings as yet show no signs of improving. It will be interesting to see how the administration fares in the months to come.
(Koichiro Kusano, Taipei)
