Mon, Jun 21, 2004 - Page 10 News List

Financial reforms urged as aid to local businesses


Taiwan should speed up its financial liberalization and reforms and ease restrictions on China-bound investment to help promote Taiwanese business interests, a prominent academic urged yesterday.

Chang Jong-fong, vice president of the Taiwan Institute of Economic Research, made the suggestion in a seminar held by the Foundation on International and Cross-Strait Studies while presenting an overall analysis of the nation's economic, political, security and social challenges over the next four years.

Pointing out that Taiwan will experience structural changes in bilateral relations with its major trade partners, Chang warned that the Chinese market share enjoyed by Taiwanese companies will begin to decline and that China's emergence as a major economic power will increasingly marginalize this nation.

He said the appreciation of the yuan as well as China's expected entry into the ASEAN and its signing of "economic partnership agreements" with countries in the region will pose the largest threat to Taiwan's bid to join in regional economic integration.

Meanwhile, the lack of a mechanism for settling cross-strait trade disputes, Taiwan's growing financial difficulties, as well as the exodus of talent and capital to China are some of the things that will place major pressure on the economy, Chang said.

He called on the government to produce a white paper to outline its prime economic and trade policies that will take advantage of the nation's high-quality workforce and manufacturing skills in the face of Chinese competition.

Taiwan's complete globalization in terms of trade and economy would not only increase its competitiveness but also help protect its political independence, Chang said, urging the government to develop the nation into a "high-tech island" and a "world business operations hub."

Taiwan's value-added capabilities will help reduce pressure from companies' demanding direct cross-strait trade and transport links and will help curb Bei-jing's designs to use Taiwanese businesses to push the government to negotiate, he said.

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