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Cross-strait Competitiveness ≠ Global Competitiveness


Cross-strait Competitiveness ≠ Global Competitiveness


Can competitiveness cultivated in China really compete? Apart from a select minority that has managed to expand operations globally, most Taiwanese companies have found their success limited to China alone.



Cross-strait Competitiveness ≠ Global Competitiveness

By Joyce Yen
From CommonWealth Magazine (vol. 547 )

I am sure many readers did not see eye to eye with my previous column, where I asserted, "There is no such thing as cross-strait competitiveness, only global competitiveness."

It is quite likely that more factories shut down in Guangdong Province in one month alone than in all of Taiwan over a period of five years. Taiwanese managers working in China often work seven days a week, fearing to take a break because five locals are waiting to take their place. Such a pressure cooker of an atmosphere naturally brings out a certain competitiveness, so why is there no such thing as cross-strait competitiveness?

The question should be, rather: when placed in the context of the global stage, is this sort of competitiveness really competitive?

Naturally, with her large population and rapidly growing GDP, China has grown in stature to rank among the world's most important nations in recent years. Her fickle market tests businesses' capacity for taking on challenges, and several domestic Chinese enterprises have managed to successfully move from China to the global stage, including Haier, Lenovo, and Huawei.

Given the limited space available, I will discuss the specifics of these cases in another essay, and in the meantime wish to emphasize here that: when these special cases are removed from consideration, success is nearly always limited to China and extremely difficult to translate further afield.

The first reason is excessive industry protectionism, which not only makes adapting to conditions outside China difficult for domestic winners, but also essentially encourages copycats. For instance, Baidu is a Google clone that is given free rein, whilst Google itself comes up against myriad roadblocks. Taobao's magnificent success can also similarly be credited to China's blocking eBay from her borders.

The second reason is cheap labor. People tend to presume this is China's big advantage, yet over the long term it impedes competitiveness, as it will reduce incentives to upgrade the production process and stand in the way of technical improvement.

The third reason is that China leverages the weight of her large market to demand technology transfers from foreign enterprises. While this lets China rapidly upgrade industry at minimal cost, it also feeds laziness. When no one is around to transfer technology, China will be at a loss for ways to continue upgrading.

The most important reason of all is excessive government meddling, further colored by subjective individual rule (as opposed to the rule of law). The impact of this is very broad. I will look at the television industry as an example, as it is the industry that has attracted the most talent away from Taiwan.

First, content censorship removes any notion in the creative person's mind of taking on reality, thereby eliminating the possibility of such shows as House of Cards or Oshin. Think about it for a moment: could a Chinese version of House of Cards be produced without making any references to power struggles within the party? And how could a Chinese take on Oshin avoid showing the plight of China's farmers?

Second, competitiveness in an atmosphere where everyone is trying to figure out how to please the boss does not allow new ideas to win out, so that everyone follows what is popular. Imperial court dramas are always set in the late Qing dynasty and early Republican period, and war dramas are always about fighting the Japanese. If creativity has no outlet, how can there be any global competitiveness?

A Truly Globalized Nation

The rush of Taiwan's talent across the strait is reflected in its television programming, with the dumbing-down and poorer production quality of Taiwanese-produced content. This applies not only to Taiwan, but also to Hong Kong, which will no longer be the cradle of superstars once its talent heads north to China. The problem is that after these talents have gone to China and triumphed over stiff competition there, they do not go on to prominence at the global level.

Only Korea has truly taken on the world on a global scale. Due to the language barrier, Korea's talent has been forced to apply itself at home. This is why, starting with Jewel in the Palace, it has come out with a whole string of productions that have taken Asia by storm, commanding top ratings. And Korean megastar Kim Soo Hyun is more popular than Scarlet Heart star Nicky Wu, not just in Korea and Japan, but even in China.

Global competitiveness certainly encompasses cross-strait competitiveness, but this is clear proof that cross-strait competitiveness cannot be transformed into global competitiveness.

(Author Joyce Yen is director of Ars Longa Press)

Translated from the Chinese by David Toman