China gains as Taiwan fails to mimic Singapore

“I lost my job after the company moved production lines to China,” said Wu, 47, as he sold copies of “Big Issue” magazine by a Taipei subway stop. Homeless for much of the past year, he’s been unemployed since losing his Foxconn job 10 years ago. “I don’t have the skills needed for the big change.”

Wu belongs to a generation of Taiwanese who relied on the island’s success as a manufacturing center, from clothing and Mattel’s Barbie dolls in the 1960s to computers and HTC mobile phones in the past three decades. Policy makers’ slowness in easing investment rules and boosting finance, transport and tourism has hampered the creation of new jobs and restrained income growth.

As warmer ties with former civil-war foe China encourage an exodus of factories to the lower-cost mainland, Taiwan’s failure to develop new growth industries has caused it to fall behind Singapore and Hong Kong. That has bolstered opposition claims that the economic embrace with China championed by President Ma Ying-jeou has hurt workers. He is running neck-and-neck with opposition leader Tsai Ing-wen ahead of the January election.

“Taiwan has done too little, too late,” said Chu Wan-wen, a research fellow in Taipei at government-funded institute Academia Sinica and author of Globalisation and the Taiwan Economy. “Taiwan’s competence in the service sector is quite

... contd.