Hello, welcome to visit Shanghai Forum
It is impossible to create a common currency ifcountries are in conflict over territorial disputes, military issues, anddiplomatic standoffs. Therefore, there is still a very long way to go to establishan “Asian Currency Zone”.
Reporter: Geng Lu
Geng Lu:You mentioned in your essay that the western “one vote one person” electionsystem would produce negative effects for economic development and fairdistribution, and therefore believe it to be inappropriate for Taiwan. Do youthink it inappropriate for mainland China as well?
LinJinyuan: First of all, I must correct your saying, because what I mean is notthat “democracy is inappropriate for Taiwan”, but that we should not regardwestern democratic values as universal. Most of the younger generation considerswestern democracy to be a universal value, yet in fact, democracy is only oneway to solve problems, especially public issues. Ostensibly, in western democraticsystems everyone has an equal right to vote and each vote bears equal value,which makes it appear fair. However, financial groups and rich people will tryto affect politics in many ways. Though each person has one vote, theirinfluence on public politics is definitely not proportional to their vote.
Secondly,to deal with public issues requires consideration of benefits on every level.The key issue of democracy is how the government takes these differentinterests into account. However, many people misunderstand the key task ofdemocracy as “one vote one person,” as electoral participation. Such aninterpretation misses the point. For example, American democracy electspresident through “one vote one person”. Starting with Jiang Zemin, the rise ofChinese leaders has a certain mechanism, yet the mechanism is unqualified inthe western view because it is not an open election. Actually, for the public,as long as Chinese government operates well in that it is able to solveproblems and will not cause political unrest, such a mechanism merits beingcarried on.
What Icare about more is whether or not the fruits of economic development are sharedby the public. The disadvantaged have no channels to express themselves, andvery often, those who influence government are financial groups and elites.Therefore, what we should consider when we design a political system is how toguarantee that the voice of the disadvantaged will not be ignored.
Reporter:You just talked about the gap between the rich and the poor, saying the government’sdecision is to some extent influenced by financial groups and other interestgroups. In the 1980s and 1990s, Taiwan underwent privatization of state-ownedenterprises, but such action somehow caused a larger gap between the rich andthe poor in Taiwan society. What experiences do you think the mainland canlearn from to better prepare itself for the reform of state-owned enterprises?
LinJinyuan: In economics, what is the meaning of state-owned enterprises? Thosemonopolistic industries possessing economies of scale or those that providepublic goods are appropriate to be state-owned enterprises. Such enterprises canbe good for consumers, such as water and electricity supply. There are manystate-owned enterprises in mainland China, and most of them are remains ofplanned economy in the history.
Before the1980s, government controlled state-owned enterprises in Taiwan, achieving both fairdistribution of earnings and supporting development of private enterprises. Fora long time, Taiwan enjoyed a growing economy, fair distribution, and mutualsharing of benefits.
The policyof “invigorate large enterprises while relaxing control over small ones” iscorrect, which is further proven by Taiwan’s experience. Earlier, many state-ownedenterprises in Taiwan were Japanese-invested enterprises. If state-owned enterprisesoperate correctly, it is good for the growth of private enterprises except for waterand electricity as mentioned before. Certainly, state-owned enterprises shouldnot compete for profits with people. Therefore, such adjustment is correct.
However, during the privatization of government run enterprises, youshould pay close attention in order to guarantee that enterprises will not becontrolled by financial groups. Taiwan had such experience before. Moreover, youshould avoid launching privatization for privatization’s sake which leads tocheap selling of many state-owned enterprises which enjoy high profits.Therefore, mainland China should endeavor to avoid launching privatization forprivatization’s sake. We should not assume that state-owned enterprises arepoor in efficiency. Singapore Airlines is a state-owned enterprise, but itoperates very well and enjoys high profits. After Japan’s surrender ended WWII,South Korea quickly privatized Japanese-invested enterprises and soldstate-owned enterprises at low cost, which leads South Korea to giantenterprises and financial groups.
Reporter:Someone has mentioned that China’s rise today is only economic, not incivilization. What is your opinion?
LinJinyuan: This is also what I worry most about, and the direction I always callfor mainland China to work hard for. As long as mainland China adopts the correctsystem and avoids big mistakes, it is easier to achieve economic growth, butthe rise of civilization is a long and difficult process.
How can welaunch a civilization transition? It is very important not to let economicdevelopment corrupt peoples’ soul. First of all, we should guarantee fairdistribution, because some people tend to show off if they become so rich. Ifwe want to achieve civilization development, we can develop more publicfacilities, gain happiness from knowledge, achieve promotion of personalitiesthrough education, and avoid competing for materials. China is a state ofetiquettes, should not learn western consumerism. Western consumerism isactually promoted on purpose by producers who create a consumer culture throughadvertisement telling the public that there is a new product which is differentfrom previous ones, but such differences are exaggerated. For example, everytime I come to mainland China for a meeting, I will get bottled water, yetrecently, an environmental group proposes not to drink bottled water any morebecause there is a big lie underlying bottled water. American enterprises firsttell the public to drink bottled water instead of tap-water, while in fact, thesource of bottled water is still tap-water, and plastic bottles will be thrownto underdeveloped countries and cause pollution. Therefore, if everyone bringsa bottle with him that can be used for a long time, he can change his view ofconsumption immediately.
In fact, the United States already has consumerism, which is similar inTaiwan, but mainland China still has time to avoid such a result, forconsumerism has not been a confirmed habit in mainland China.
Reporter:Mr. Robert Mundell “father of Euro” predicted in 2001 that “there will be threebig currency zones in the future ten years”, among which Asian Currency is oneof them. What are the reasons do you think that Asian Currency Zone has notbeen established yet?
LinJinyuan: A typical model nowadays is the Euro, because those European countriesenjoy higher isomorphism, for example, in their development level,industrialization and historical and cultural background. However, thesituation is much more complex in Asia, because countries differ in developmentlevels and have many conflicts in history, the conflict over Diaoyu Islandbetween China and Japan, and the conflict between China and the Philippinesover southern sea. It is impossible to create a common currency if countrieshave conflict in sovereignties, military issues and foreign affairs. Therefore,there is still a very long way to establish an “Asian Currency Zone”.
Why shouldwe create a common currency? For Euro Zone, the countries in EU want to competewith the United States, which can add chips for negotiation. It is widely predictedthat there will be a situation of tripartite confrontation in the future.However, it is difficult to establish an Asian Currency in a short time.Therefore, we had better first solve conflicts between East Asian countries,thus achieving cooperation in resource development, which promotes the wholeAsian economy and is helpful for the situation of tripartite confrontation.
One thing I want to put emphasis on is that the world view of Europeancountries and the United States always regards the international relationshipas a zero sum game that if you use more resources then I have to use fewer.However, China is long nurtured by Confucianism and has moral value of coexistand mutual prosperity and the spirit of regarding the whole world as onecommunity. Therefore, China can act as a model of moral value to achieve awin-win situation instead of playing a zero sum game where people strugglefiercely with each other.
Introduction of Lin Jinyusn:
LinJinyuan is Associate Professor of Economics at Tamkang University, and receivedhis Ph.D in economics from USC. A long-time supporter of cross-straitunification, his research focuses on applying insight from Taiwan’s economy tomainland China. He advocates diligence and thrift, placing emphasis on the people’slivelihood.
