Trade group eyes role in direct links

The Chinese National Federation of Industries (工總) plans to set up offices in Beijing, Shanghai and Guangzhou, officials from the group said yesterday.

The federation said the move was a part of efforts to facilitate negotiations on direct links between Taiwan and China.

The government in recent weeks has indicated it may tap business leaders to help negotiate the links, which include transportation, trade and communication and postal links across the Strait.

"It's the federation's obligation to help [the government] break the cross-strait deadlock," the group said in a proposal authorizing the establishment of the offices yesterday. "The federation should take up the job as top cross-strait negotiators on the three links issue."

But Taiwan has yet to approve the federation -- or any group, for that matter -- to represent it in negotiations.

Downplaying the political sensitivity of the federation's plan, Chairman Lin Kun-chung (林坤鐘) told reporters yesterday that "the initial purpose is to provide better service to the association's 50,000 members in China."

But he added that the business group would like to take an active role in facilitating cross-strait talks -- regardless of whether the expansion plan into China is approved. Lin also reiterated his appeal for action on direct links to President Chen Shui-bian (陳水扁), who earlier this month said his administration would open negotiations to the private sector. Lin said each business sector should have its own representative to participate in talks.

Next month, the federation -- the nation's largest industrial group -- plans to send a delegation to China's Dalian and Shengyang cities to explore the investment environment there.

If possible, Lin said the delegation would exchange views with Chinese authorities regarding the association's plan to set up offices and the direct links issue.

In addition yesterday, the group held a luncheon to discuss taxation issues with high-ranking officials from the Ministry of Finance, including Minister of Finance Lee Yung-san (李庸三).

Members of the group presented a long wish-list of tax cuts and favors sought by industry. They include broadening the scope of tax exemptions by canceling the commodity tax on cement, plate glass and imported mechanical equipment; increasing preferential loans to small and medium-sized information technology firms; and loosening bank credit requirements when granting loans to the private sector.

But finance officials were cool to the idea of tax cuts.

"Given the government's current financial situation and lack of tax income, the ministry would be hard pressed to adopt [new] tax cut proposals," Lee said yesterday.

Yu Sao-wu (俞紹武), head of the department of customs under the finance ministry, said business leaders could take advantage of existing tax breaks.

Yu encouraged qualified businesses to set up so-called "bonded" factories (保稅工廠), so that their commodities would not be taxed. Bonded factories have rules similar to those for off-shore transshipment zones.