Taiwan needs immediate action to further liberalize and create a more foreign-investment-friendly environment in order to avoid losing its competitive edge against strong regional rivals, the European Chamber of Commerce in Taipei (ECCT) warned yesterday.
"Taiwan is on the verge of risking regional and global competitiveness unless the government reacts quickly by liberalizing the economy," ECCT chairman Dirk Sanger told a press conference yesterday.
The ECCT, which represents over 350 European firms and 600 individuals in Taiwan, yesterday released its 2005-2006 Position Papers.
This annual report, this year titled "Keep Taiwan Dynamic and Relevant," aims to voice overseas companies' concerns and recommendations on the investment environment.
The ECCT identified four key issues of concern in this year's report. They are overregulation in industries like the automotive, logistics, retail, telecommunications and banking; slow progress in cross-strait business normalization like import bans on 2,400 goods from China; incompliance of WTO agreements like Taiwan's pending accession to the Government Procurement Agreement; and the slow move in developing the service industry, like slow progress in carrying out the free-ports plan and the zoning limitations on the retail business.
The import bans have caused foreign companies estimated extra costs or a loss of US$100 million per year and the figure could be rising as more companies choose to manufacture goods and parts in China, the chamber's vice chairman Ralf Sheller said.
The import ban has also driven Tesco Stores (Taiwan) Co to quit the local market earlier this month as this measure had hampered the retailer's operations, according to Shane Neal, co-chair of the ECCT's retail committee.
He said that overregulation on acquiring land had also largely slowed down Tesco's expansion here as the retailer opened only six outlets here in seven years, far slower than its normal pace in other countries.
Also, excessive operational restrictions and a continued lack of direct cargo links between Taiwan and China have dulled the outlook for Taiwan's free trade zones which were established to attract international logistic companies, while some of the world's largest logistic operators had announced that they're setting up regional-operation centers in Hong Kong and China instead, Shellers said.
In China, where foreign investors also suffered because of overregulation, Chinese authorities have offered clearer deregulation roadmaps and acted more decisively to make changes, he said.
In response, Hu Sheng-cheng (
The government has removed 75 items from the import-ban list to meet foreign companies' needs and is currently engaged in negotiations with its Chinese counterparts on the opening-up of direct flights for both passengers and cargo, Hu said.
The Cabinet is now seriously considering allowing the exchange of Chinese yuan in Taiwan, which could materialize early next year, after successful trials on the offshore islands of Kinmen and Matsu, the official said.
A string of possible relaxations to simplify the process for Chinese professionals to come to Taiwan and to allow foreign internships is under way as well, Hu said.