beyondbrics

It may not be as serious as Japan’s, but Taiwan’s demographic problem is worsening. Simply put, its 23m citizens are not having enough babies.

Taiwan’s birth rate of 8.9 per 1,000 population puts is among the lowest in the world, just ahead of its neighbours Hong Kong, Singapore, South Korea and Japan. Add a penchant among wealthy Taiwanese parents for sending their children to school in the US, Canada or Australia, plus a growing diaspora of Taiwanese workers and businessmen moving across the Strait, and it is little wonder that Taiwan’s brain drain is fast becoming an issue.

A survey released by the opposition Democratic Progressive Party on May 8 found that 87.3 per cent of women aged 20 to 49 did not want to have children, mostly for economic reasons, with 54.9 per cent of mothers saying they were not happy.

This is a particularly vexing problem for Taiwanese companies, many of whom wish to move up the value chain from being contract manufacturers by hiring talent in research and development or in branding and marketing.

It hasn’t helped, either, that wages are on the rise faster in China than they are in Taiwan. Taiwan’s education system produces high quality engineers but, as cross-Strait links grow, many may find better prospects in China than in Taiwan.

The government has tried to raise the birth rate by offering subsidies to families with several children. Public service announcements encourage people to have more babies.

A look at Hong Kong, which has an even lower birth rate at 7.5 per 1,000 population, suggests other potential solutions – importing workers, students, or now even babies, from mainland China.

Taiwan has started allowing a small number of mainland Chinese students to enroll in the island’s universities – a small concession that followed vicious battles fought in the legislature.

Politically, further opening on this issue would be very difficult in Taiwan, where fear of a Chinese takeover still runs high despite the recent warming of relations. Even in Hong Kong, the growing number of mainland Chinese women giving birth in the territory is becoming an incendiary issue.

Yet there are longer-term benefits for Taiwan in greater liberalisation. Erdong Chen, a mainland-born student who came to Taiwan to study for a semester last year, by way of the American University in Washington DC, summarised the beniefits in a book about the experience:

In this process [of academic exchange with Taiwanese students] mainland Chinese exchange students could, for the first time in their lives, experience Taiwan up-close and have an in-depth understanding of its politics, economy, culture and society. Naturally it is an extremely rewarding experience, particularly when one finds that one’s prejudices and preconceptions are completely and utterly defeated by the truth of what is right in front of you.

With exchanges, particularly among students, promoting greater mutual understanding, perhaps it is China that needs to be worried about being influenced by Taiwan, rather than the other way round.

Related reading:
Young hear ticking of demographic timebomb loudest, FT
Taiwan talent: running short, beyondbrics
China’s wealth drain, beyondbrics