23 Nov 2017

A tale of two brothers: China and Taiwan

Danny writes*

Ever since 1927, Chinese people have been divided by political ideals, which resulted in two political parties: the KMT (Nationalist) and the CPC (Communist). Their disagreement broke into civil war after World War II. Although both sides suffered great losses, the KMT eventually lost to the CPC, which gained support from poor peasants promised their own land. The KMT fled to Taiwan and set up Republic of China while mainland China, to this day, remains known as the People’s Republic of China.

Many daily aspects of life in China have changed. Under Mao’s regime, China diverged from Taiwan as the campaign of “Destroying the Old Fours” (old thinking, old culture, old convention, and old habits) led to the destruction of Chinese heritage, art, and literature. One of the biggest cultural changes was the introduction of Simplified Chinese in 1956.

While other Chinese-speaking regions such as Taiwan, Hong Kong, and Macau still utilize the old Traditional Chinese, in whole, minimum changes were made when it comes to Simplified Chinese. One of the “Old Fours” includes old culture; of which when it comes to Chinese characters, every block of letter has a story or a physical origin. Mao’s idea of destroying the Old Four in this case meant to destroy the Chinese origin of the Chinese characters.

Letters were merged with one another, trimmed off to make it easier to write, simplified from complicated words, or even removed and reinvented in a clean slate. Of the 8,000 common used Chinese characters, 2,200, or 30% of the total, were simplified (pdf) during Mao’s regime.

Take “love” (愛) for example. Love is usually from the heart, hence the Heart letter (心) is also embedded in Love. The simplified version (爱) lacks love, and to other Chinese people outside of China, it’s funny to see how Mainland Chinese people could love without love. Another letter is the verb “to lead” (導). The letter is composed of ethics (道) and inch (寸), meaning to follow a system with principles. The simplified version (导) only contains the original “inch” part. It’s interesting to see what happened to the morals required in leading in mainland China.

Compared to the 1.4 billion populations in Mainland China, the total population of Taiwan, Hong Kong, Macau, and other Chinese-speaking countries is less than half of that, but for them, they continue to use Traditional Chinese. To those people, the act of using Traditional Chinese could be seen as a silent protest against the idea of communism and the cruelty they had imposed onto their people during the 50s and 60s. Instead of being the creator of Simplified Chinese, the Communist party in China is seen as the destroyer of Traditional Chinese. Within all the conflict, especially between Taiwan and China however, there is always this “what if” in economist’s head: what if there wasn’t this separation between Simplified and Traditional, or the whole Chinese culture was never separated due to political ideas?

Nowadays, Taiwan depends heavily on China when it comes to manufacturing. More than $10 billion has been invested into China from Taiwan, and around 2 million of Taiwanese entrepreneur or business owners are now permanently living in China, employing millions of Chinese workers. With heavy dependence on China when it comes to export and tourism, there are talks throughout history to either smooth out the status quo politically and economically but with no clear outcome. Political speaking, the KMT and CPC are still at war, and a truce or peace agreement has yet to be made. There are transaction costs not only when it comes to import and export, but also the cost of creating facilities and institutions to create another “inter-China” passport for travel.

Of course to most non-Chinese speakers’ eyes, Chinese is just Chinese. China came to an economic renaissance in the 1980s, and ever since remain a dominant power politically and also economically. To outsiders, you see the growth of Chinese products: from labels from inferior goods slowly to even the most flagship products such as Apple iPhones. However as people of Taiwan, Hong Kong, and Macau, they still see Simplified Chinese as the “inferior” when it comes to quality or lack of culture. I have known Taiwanese friends that refuse to buy Chinese products in Simplified Chinese, in fear of food safety or just simply because it’s “from China”.

It is evidential that there are opportunity costs by the segregation of a language so close but yet so far. To switch from one Chinese to another would not be easy. $565 billion is spent on education in China yearly, and compared to $22 million budget in Taiwan (pdf), it is fairly clear who would be the one to move if unification was ever o the table; however, the digits on the accountant’s book could not even quantify the backlash and resistance that could happen due to the switch. Simplified Chinese and Traditional Chinese are brothers, but brothers with different ideologies. They share the same blood, the same culture, but it was politics and ultimately the language that separated the two brothers apart.

Bottom Line: While only seemingly difference in the ways of writing words, the separation of China and Taiwan, or Simplified and Traditional Chinese is deeply rooted in its cultural, political, and economic difference, resulting in transaction costs related to commerce, tourism, and political tension between the two countries.

* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice :)