Sat, Dec 14, 2002 - Page 10 News List

Report says links would cut costs but create competition

CROSS-STRAIT The Chung-Hua Institute for Economic Research says high-tech competition with China would become fiercer with the opening of direct links

CNA , TAIPEI

The establishment of direct links across the Taiwan Strait may strengthen China's magnetic effects on Taiwan technology and capital while bilateral high-tech competition would sharpen, according to a recent report.

The report, conducted by the Chung-Hua Institute for Economic Research (中經院), found that direct trade, transport and postal links would increase China's absorption of Taiwan's expertise and investment, while competition between high technologies on the two sides would become sharper because the focal direction of their industrial development is similar.

Following the entry of Taiwan and China into the WTO, both sides are facing a crossroads in terms of business relocation and industrial transformation, the report said.

However, it pointed out that high-tech competition between the two sides is inevitable and would become fiercer with the opening of the links, especially in the electronics and information sectors.

The report noted that electronics product makers surveyed said that if the links are established, they will save about 15.8 percent on product and material transport costs and 25.5 percent on business travel costs.

It further found that opening shipping links with Shenzhen or Huangpu ports in Guangdong Province may cut shipping costs by 20 percent, while up to 61 percent would be saved if links were forged with Fujian Province's Xiamen and Fuzhou ports.

Setting up shipping ties with Shanghai or Qingdao will also slash costs by 52 percent and 60 percent, respectively, according to the report.

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