Posts tagged Taiwan

Free Trade vs. Protectionism

Satirical View of Protectionism

There are strong arguments from both opinions. However, I do think that an industry needs a protectionism in order to build up its capability to compete with international industries. There are many real world examples that support this idea of protectionism. Of course, it could be unfair for some of the countries that are trying to get in to the market, however, the country with inefficient, lack of technology on specific area will never get better just by initiating free trade with other countries, completely making the weak industry vulnerable to international siege of cheap… products.

There are many industries in East Asia that have benefited from protectionism. One of the most famous example would be South Korea. The country had set a quota, tariff and all methods of protectionism possible to grow one of the important industries. For example, the electronics industries have heavily benefited from the protectionism. From 1970-1990’s, the electronic companies such as Samsung or LG have had significant growth due to the protectionism. Thus, expanding economic growth within the country and lifting the standards of living of the South Korean people. If Korea did not use any kind of protectionism to bolster its core industries, they might be still suffering from poverty and low standards of living. This also includes Japanese, Taiwanese and other nation’s industries. These countries became wealthy by overcoming the lack of resources by protecting the important, lucrative industries.

It would be completely immoral for developed countries to impose and bully undeveloped countries to sign up for WTO and initiate free trade. These undeveloped countries will never have the chance to grow and develop their own industry and technology. It would be forcing a poor country to stay poor and never giving them a chance to have develop their own industry and raise the standards of living.

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China threatens sanctions over U.S. arms deal

Chinese Vice Foreign Minister He Yafei says the U.S.-Taiwan arms deal “severely” endangers China’s national security.

CNN article: Click Here

According to CNN, China has threatened to slap sanctions on American companies that sell arms to its rival Taiwan as part of a range of punitive actions Beijing is taking to protest the deal.

I will look at this article in economical point of view, not political. United States has chosen to sell its arms to Taiwan obviously for money, but has cost them sanctions from China. However, I do not think this as a disadvantage as United States doesn’t sell that much of arms to China. So even if they lose a market in China, it would not affect them so much. They did not have the arms market at China to start with. Also, even if United States tried to sell their products to China, I am definitely sure that China have enough technology to build and manufacture their own arms.

Unlike China, Taiwan depends heavily on United States for security arms. It does not have a high technology in military arms like China does. Therefore, it has to import military arms from foreign countries. However, many countries are reluctant in selling arms to Taiwan in fear of China’s diplomatic pressure. So Taiwan has depended on United States for longer than 50 years since the start of Cold War.

In my opinion, even if China politically and economically pressure United States, United States will never give up on this large market for exporting its arms. Though, this would aggravate the deep distrust between China and United States.

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