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United Daily News: Coopetition between big, little dragons
Central News Agency
2014-08-14 11:20 AM
Official statistics indicate that Taiwan's economic growth reached 3.84 percent in the second quarter, 1.05 percentage points higher than previously predicted. At the same time, however, Singapore, Hong Kong and South Korea -- known along with Taiwan as Asia's four little dragons -- have all lowered their growth forecasts recently. Although the government has repeatedly stressed that Taiwan's economic growth over the past five years has been the second-highest among the four little dragons, Taiwan's overall performance is clearly far inferior to the other three. This is due to Taiwan's over-dependence on an export-oriented growth model, especially regarding exports from the contract manufacturing sector. In recent years, the emergence of China as the world's second-largest economy has created a coopetitive relationship between the big dragon and the four little ones. Coopetition is a neologism coined to describe cooperative competition. It is a portmanteau of cooperation and competition. While China is an important trade partner that is driving growth among the four little dragons, its competition with the little dragons is also escalating as it works toward economic transformation and industrial upgrading. The recent improvement in Taiwan's economy and a decline in that of South Korea are linked to two major changes in the coopetitive situation. The first one involves a decision by Apple Inc. to shift its chip orders for iPhone 6 from South Korea to Taiwan. The second is related to the rapid emergence of Chinese smartphone and tablet brands, which rely on Taiwanese parts and components. On the surface, Taiwan seems to have made a turnaround in the competition with South Korea. Looking further ahead, however, Taiwan's information and electronics industries are facing a worsening crisis because China is quickly developing its own supply chain, which is likely to erode Taiwan's manufacturing orders in the future. Taiwan must strengthen the independence of its economy by promoting industrial innovation. Only if Taiwan maintains an irreplaceable advantage can it revive its economy and prevent itself from being consumed by China. (Editorial abstract -- Aug. 14, 2014) (By Y.F. Low)
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