Record Taiwan income gap blamed on China ties

Record Taiwan income gap blamed on China ties

TAIPEI, August 20, 2010 (AFP) - Taiwanese media said on Friday that closer economic ties with China had contributed to a record income gap between rich and poor on the island.

The most prosperous 20 percent on Taiwan reported average disposable incomes of 1.79 million Taiwan dollars (56,000 US) last year, or 6.34 times more than the income of the poorest 20 percent, according to government figures.

This was the highest level since 2001, said the Directorate General of Budget, Accounting and Statistics, which attributed it to a global trend of widening gaps between the rich and poor.

But the Apple Daily said in an editorial that the gap was the result of local businesses relocating production overseas, especially China -- which signed a landmark trade deal with Taiwan in June.

"Economic growth is rising, but ordinary people don't get to feel it," said the paper. "The exporters and their shareholders are laughing all the way to the bank, while the poor are ending up in a hopeless situation."

The paper said products made by Taiwanese companies at plants outside the island, particularly in China, were taking up an ever larger proportion of total trade, rising from 13 percent in 2000 to 50 percent in June this year.

Some economists have previously warned of the impact that closer ties with China will have on income distribution in Taiwan, which was once one of East Asia's most equal societies.

They say that the opening with China makes it possible for Taiwanese businesses to move their production to the mainland, cutting costs and increasing profits.

However, by doing so they also reduce job opportunities in Taiwan, hitting the incomes of the island's blue-collar population, the economists have warned.
China and Taiwan have seen a rapid improvement in ties since 2008, when Beijing-friendly Ma Ying-jeou became the island's president.
The culmination of this trend was the signing in June of the Economic Cooperation Framework Agreement, the most far-reaching deal yet between China and Taiwan.

Service: World News (ASI)

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