Academics advocate looser cross-strait trade policies

The nation's policy of shifting low value-added manufacturing and uncompetitive industries to China should be adjusted to allow for freer flows of capital and labor, academics urged yesterday.

The policy shift would allow Taiwan's industries to remain competitive after Taiwan and China join the WTO later this year, the academics said.

Chiu Chen Lee-in (陳麗瑛), research fellow at the Taiwan Institute of Economic Affairs (TIER, 台灣經濟研究院), said that the nation's present trade policies encourage Taiwanese industries to take advantage of China's cheap and abundant labor.

But Chiu noted that current policy doesn't reflect the fact that more and more of Taiwan's high-tech industry is shifting to China.

The fact is, China is upgrading its industrial base and will become increasingly competitive once it joins the WTO. With China's WTO membership card will come more skilled expertise and foreign capital, Chiu said.

"The government's manufacturing policy has restricted ... sometimes trapped Taiwanese businessmen as they do business in China," Chiu said.

According to Chen, the government has kept close tabs on manufacturing industries in China via trade and investment restrictions.

Meanwhile, these restrictions have also helped the government to control excessive capital and key expertise from flowing to China.

"Industries in both Taiwan and China are mutually beneficial, while competition between them is increasing at the same time," Chiu said. "The traditional fine line between them has been blurred."

Chen noted that the division of manufacturing labor is dynamic and should be constantly adjusted. The government should take this into consideration, others argue, especially when it comes to allowing Chinese high-tech workers to take jobs in Taiwan.

"The new government should address the fact that the domestic supply of high-tech talents has failed to meet the market demand, while China has a relatively opulent supply in this aspect," Robert Tsao (曹興誠), president of United Microelectronics Corp (UMC, 聯電集團), was quoted by local media as saying.

According to Tsao, Taiwan's shortage of high-tech manpower will be temporarily solved if the "three links" are implemented, which would allow labor to flow more freely from China to Taiwan.

But in the long run, the strength of China's abundant manpower supply in the high-tech industry will eventually become the largest draw for Taiwanese high-tech manufacturers, Tsao said.

Therefore, Taiwan should work more to cultivate high-tech talent.

"The traditional division of labor between Taiwan and China will blur and both sides will increasingly become mutually beneficial as well as keener competitors," said Wang Ya-kang (汪雅康), director general of Industrial Development Bureau (工業局) under Ministry of Economic Affairs (MOEA, 經濟部).