'I began my political career as founder of the Welfare State Alliance [a faction of the Democratic Progressive Party]. This has been my stance and the logic which I've consistently pursued for several decades. Therefore, I am proposing a 'Taiwanese Restoration' through new thinking in politics, economics and society, in a bid to create a Taiwan that values coexistence,' says Hsieh, his voice hoarse from election stumping, as he earnestly reminisces about his original political intentions and describes the ideal Taiwan he imagines.

In the parliamentary elections two months ago, the Democratic Progressive Party (DPP) suffered an unprecedented defeat. As DPP supporters licked their wounds and lamented tearfully, Hsieh took over as DPP chairman and emphasized with deep remorse, 'We must squat down even lower and listen to the voice of the people and the land,' voicing hope that the DPP will return to its founding spirit and regain the Taiwanese people's support.

In comparison with his rival, Kuomintang (KMT) presidential candidate Ma Ying-jeou, who has enjoyed a smooth academic and political career, Hsieh has faced many setbacks and obstacles in his life. But he prides himself on being able to 'withstand adverse circumstances and to bounce back after going under,' turning a life of comebacks into an art form.

Will Hsieh have an opportunity to use his 30 years of political experience again at the national level? Will he be able to convincingly persuade the electorate with his vision for Taiwan ?V Taiwan first, culture first, the disadvantaged first, the environment first?

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Q: In this election you have been proposing the concept of a 'happy economy.' What kind of Taiwan do you envisage ten years from now?

A: I think it would be a Taiwan that centers on a knowledge economy and is mainly a soft economy. As the ultimate goal I hope that Taiwan becomes the country with the highest living standard within the Chinese-speaking world. Living standard does, of course, include political democracy, social development, cultural diversity and a superior environment. On the economic front we want to develop a less-polluting, more esthetic economy.

Q: Do you think that the pursuit of high economic growth clashes with the goal of high employment? If these two goals clash, which one would you give priority?

A: Without a doubt, each economic stage is different. At the current stage I think that plentiful employment is most important.

Q: Is this the case because you see social confrontation and the emergence of an M-shaped society in Taiwan?

A: Yes, being unemployed is emotionally more painful for people in Taiwan, because we do not take care of the jobless as well as Europe and North America. We should use a more sympathetic approach, such as micro-enterprise start-ups or low-interest loans to help those at the grassroots of society, to revive employment at the grassroots level. I think that's more important.

Q: Right now, the matter topmost on people's minds is cross-strait issues. Assuming Kaohsiung City had become a free-trade port while you were Kaohsiung mayor, would the city be better off today?

A: If back then Kaohsiung had become the 'Hong Kong of Taiwan' that I talked about, a free port, many manufacturers would have been able to remain in Taiwan and would have enjoyed preferential treatment. But many people misunderstood the term 'Hong Kong of Taiwan' so my proposal met with resistance.

Today, I am still advocating the same thing. Eventually, the Executive Yuan sent the Act for the Establishment and Management of Free Ports to the Legislative Yuan for review, but it was already seven or eight years late. On top of that came political infighting and a lack of cooperation from the Legislative Yuan. They even added a lot of regulations, such as that wages had to follow the Labor Standard Law's minimum wage and that Taiwan's indigenous people had to make up 5 percent of the port workforce. It made things inconvenient, so that foreign companies didn't come. And that's very unfortunate.

Q: The crucial point is still political stability. How do you want to resolve political infighting if you are elected president?

A: Politics mean sharing power. For instance, if now the KMT holds three quarters of the seats in the legislature, we will basically respect their majority in the Legislative Yuan and conduct negotiations on issues including the selection of the premier ?V for example, the previously rumored candidates Chiang Pin-kung and Wang Jin-pyng.

I think in the future we will have to march toward negotiative politics, or else everyone will stage a boycott.

Q: Let's return to cross-strait issues. Where does your cross-strait policy differ from Ma Ying-jeou's?

A: In a nutshell, I would describe my cross-strait policy as pursuing the greatest possibilities for the economy and for corporate competitiveness while maintaining Taiwan's autonomy.

This means we maintain the autonomy of Taiwan, but also openness. It does not mean that we will always remain a closed country for the sake of our own autonomy. But it also does not mean that we won't talk about Taiwanese autonomy at all for the sake of the economy.

Mr. Ma's cross-strait policy is based on the idea of a 'cross-strait common market' ?V that's dangerous. The two sides of the Taiwan Strait resemble two teacups [that are filled to different levels]. If they are linked with a pipe, money will flow away from the richer side to the poorer side, and people will migrate from the more populous side to the less populated one. In other words, Taiwan's wages and incomes are high. In China incomes are low, so eventually wages on both sides would definitely move toward the cross-strait average. That would be bad for Taiwan.

Mr. Ma says he would lift all restrictions on corporate investment in China. That would be very dangerous. Some companies leave their debt behind in Taiwan, while moving their money to China. How could we let them go there without vetting their China-bound investments? This would not live up to Taiwan's standards of social justice.

Therefore, we still emphasize the flexible review of individual cases, but we will somewhat relax regulations and no longer say investments are not possible at all if the invested sum exceeds the maximum allowed 40 percent [of a company's net worth]. But if we discover in the course of a review that there are problems, we still need to block such investments. This is the purpose for the existence of government.

Q: How do you view the fact that Taiwanese investors account for 70 percent of foreign investment in China? Would you want to revise that?

A: I have been emphasizing that we should not invariably open up China-bound investment. We should define China as a market and support our manufacturers to go there and explore it, to fight for this market.

But we do not approve if entire factories are moved to China in order to replicate Taiwan's cheap labor experience. It is wrong to treat China as a factory. They won't function only as a factory forever, and not engage in R&D. When enterprises fold and Taiwanese factories move to China and their exports from China are calculated as Taiwanese exports, it looks as if our economy is growing. But in fact our domestic demand is shrinking, because the jobless population is increasing.

I believe that Taiwan must maintain a certain share of its economy in manufacturing. And there should be a great amnesty for China-invested Taiwanese enterprises, to attract them to return to Taiwan.

China is now also emphasizing R&D. It has become Taiwan's strongest rival. Taiwanese businesses are investing in Vietnam, and I am convinced that China will do the same. So I feel that Taiwan needs to define its own ultimate position.

Q: If elected president how would you try to ease tension in the Taiwan Strait?

A: Are cross-strait relations strained? I'm not sure. China only knows that right now discord exists in Taiwan, and that it works to their advantage if they wait until this discord increases. We here in Taiwan should seek solidarity.

Q: Would you go visit China?

A: As I see it, [the Taiwanese offshore island of] Kinmen would be the best location. We could invite Hu Jintao there for talks, to achieve a more relaxed atmosphere. We should not necessarily press for immediate answers or conclusions.

Q: Would you open negotiations on direct flights with China if you won the presidency?

A: I think the soundest approach would be to start with direct charter flights, which could be achieved within three months after taking office, not only because we would be in control, but also because such flights would substantively solve the time and cost problems that China-invested Taiwanese businesses face. Normalized direct flights will only become feasible if China won't make a big issue over whether these flights are called domestic flights or international flights.

Q: Let's talk about 'boosting the economy.' Ma Ying-jeou wants to stimulate economic growth through complete openness in cross-strait relations and implementing public infrastructure projects. What's your take on this?

A: We will use measures such as the 'Six-Star Plan' to boost the economy at the grassroots level. Based on Keynesian economics Mr. Ma is stressing public investment to revitalize the economy. But such an approach is more suitable in times of unused resources.

But Taiwan presently does not have any unused resources at all. Moreover, given today's globalization, many public projects are open to international bidding. If we invest NT$300 billion, this will not necessarily benefit our people, as Keynesian theory asserts, but some of these investments will be snatched away by foreign companies. For instance, in the case of the High Speed Railway, foreign countries took the money. There is a lot of room for adjustments to Keynesian theory.

Q: No matter who is elected president, won't fiscal affairs inevitably be a problem?

A: When I talk about a 'happy economy,' that's the problem I'm addressing. We should start out at the grassroots level to enable the jobless and those with low incomes to find employment. If everyone has work, has some money and purchasing power, the economy will regain steam.

Just look at Japan, which poured trillions into public projects in the past. As a result, they created an economic bubble from which they didn't recover for a decade.

Q: Are you open-minded regarding foreign investment in Taiwan?

A: Yes, I think we should revamp our tax system to enable Taiwanese capital to flow back to Taiwan, to enable foreign capital to come in, and to partly open Taiwan to Chinese investment. With these three kinds of capital coming in, Taiwan's overall assets will increase and the value of labor will also go up.

Q: The government plays an important role. What do you regard as an ideal government?

A: I believe what the market economy can solve should be left to the forces of the market. The government should intervene when market economics cannot solve a problem. Transportation in remote areas, for instance, cannot be solved through market economics, because if private transportation companies run such routes, they can be sure to lose money. But people living in mountainous areas also have the right to be mobile, so in such cases the government must get involved.

Q: You are emphasizing the 'golden triangle' of sustainable development, which aims at a balanced development of economic, social, and environmental concerns. Do any of these areas take priority?

A: Basically we think that all need to develop, but in the event of clashing interests, the disadvantaged should come first. If you don't give priority to disadvantaged groups, society will grow more and more polarized. The gap in society can only be narrowed with the help of government involvement.

That's why we've come up with a three-part policy, to look after small- and medium-sized enterprises, the middle and lower classes, and central and southern Taiwan. The basic concept of our golden triangle is the hope to maintain an equilateral balance. If any of the triangle's sides becomes too short, it must be given priority.

Q: What is the biggest lesson that you have learned from this presidential campaign?

A: Victory comes at a price.

Translated from the Chinese by Susanne Ganz

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Chinese Version: 謝長廷：「一中市場」將走入險境