Taiwan-based companies is likely to face increased competition next year as a result of of the Closer Economic Partnership Arrangement (CEPA) signed between (mainland) China, Hong Kong and Macau, an analyst said yesterday.
According to Wu Fu-cheng (
Beijing and Hong Kong are scheduled to complete negotiations on the CEPA by the end of next month. The deal will allow the entry of an additional 710 Hong Kong products to the mainland market without tariff duties, Wu said.
Some 1,087 items will then enjoy preferential treatment in China, Wu said.
CEPA talks are focusing on a further market opening for Hong Kong-based shipping and surface transportation services, as well as liberalization in the financial and insurance sectors, allowing Hong Kong companies to do business in the vast mainland market, Wu said.
The CEPA will help push Hong Kong's gross domestic product (GDP) up by 2.64 percent, he said.
The CEPA may lower Taiwan's GDP by 0.07 percent, with the textile industry suffering a 1.24 percent drop in its production value, Wu said.
Under the CEPA framework, Hong Kong and Macau may join forces with the mainland in pressing ahead on free trade agreements (FTAs), Wu said.
China is planning to establish an FTA zone composed of Russia, Japan, South Korea and countries in Southeast Asia by 2010, while at the same time keeping Taiwan on the sidelines of such agreements, Wu said.
As a result, Taiwanese business groups will need to formulate strategies to remain competitive in the region, he said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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