Tue, Jan 11, 2000 - Page 18 News List

MOEA to deliver plan to improve transport

EFFICIENCY The government program to speed product delivery from factory to consumer may allow a higher degree of processing for Chinese goods, make it easier for transport companies to operate, and provide shippers with further tax incentives

By Shirley Sun and Cybil Chou  /  STAFF REPORTERS

The Ministry of Economic Affairs (經濟部) yesterday said that it is developing a national logistics flow plan (國家物流發展策略) to further facilitate international goods transportation from factories to consumers through Taiwan. Details of the plan are expected to be announced by the end of February before the presidential election.

"We are currently studying whether to set up a logistics flow zone (物流園區)," said Chen Mi-shuan (陳秘順), a ministry official. "It is possible that the logistics flow zone design will be similar to that at the Hsinchu Sceience-based Industrial Park, which means there will be one stop service to the transportation industry."

According to the report, the plan is designed to lure foreign firms to use Taiwan as an operations center for product supply and marketing.

The plan echoes the Cabinet-level Council for Economic Planning and Development's (CEPD, 經建會) proposal to establish Taiwan as a "global logistics center" (全國運籌中心).

According to the recent CEPD report, Taiwan has several advantages for becoming a global logistics center. Geographically, flight time to cities on the western side of the Pacific Ocean is on average only two hours and fifty-five minutes; Seventeen international companies including Motorola, Phillips, and Dell all have operation centers in Taiwan; and UPS also has facilities here to help shorten the time needed for air-freight delivery.

As for whether to further provide the transportation industry (物流業) with tax incentives, ministry officials say that the new version of the Statute for Upgrading Industries (促進產業升級條例) regulates that only "new important strategic industries" can enjoy tax credits, and since it is still controversial whether this aspect of the freight and transportation industry is new, they will need to further evaluate the proposal.

The plan will allow semi-finished Chinese goods to be completed in the zones and then shipped out. While some legal problems still need to be overcome, a higher degree of processing of Chinese goods would be possible if the plan is realized.

Currently, Chinese goods arriving in the offshore processing center can only undergo a small degree of value-added processing.

The CEPD, as well as Mainland Affairs Council, have also reached a consensus to include export-processing zones into Taiwan's offshore shipping center, part of the government aim to develop Taiwan as a global shipping center.

In April 1997, Taiwan implemented an offshore shipping plan, under which cross-strait marine carriers are allowed to ply direct routes between Taiwan's Kaohsiung and China's Xiamen and Fuzhou ports. However, cross-strait shipping operators plying such routes can only carry cargoes heading for a third destination other than Taiwan or China.

The CEPD's report pointed to Dell's computer production and sales model as an example of how the system is designed to work. US companies place orders, and Taiwanese companies manufacture and ship the orders to Singapore.

"The plan to develop Taiwan as a global logistics center is in step with not only international goods manufacturing and transportation but also cross-boarder e-commerce," said Schive Chi (薛琦), vice chairman of the CEPD.

The council is expected to have a ministry-level meeting Jan 13 to have further discussions on the global logistics center plan. Topics range from e-commerce and transportation and freight industry taxation to whether to designate export zones as part of the out-of-boarder transportation center.

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