After President Chen Shui-bian (陳水扁) announced that he would pursue an "active management, effective opening" stance toward cross-Taiwan Strait trade policy in his New Year speech, analysts appeared unimpressed with the changes, saying that the announcement would not make much of an impact on the local bourse.
"This could hint at a slowdown in the pace of cross-strait opening," said Yu Huei-ling (于蕙玲), president of Jih Sun Securities Investment Trust Co (日盛證券投信).
"Since the market anticipated a slow-down in cross-strait relaxations after the [Dec. 3] local government elections, the policy change may not have such a negative effect on local stocks," she added.
The market had earlier predicted that Chen would announce a more relaxed policy toward China. Therefore analysts said the stock market may experience some selling pressure early in the session today, but the market may return to focus on fundamentals as investors still favor electronics shares during the holiday season.
The benchmark TAIEX, which closed at 6,548.34 on Friday, is expected to fluctuate within a narrow band between 6,300 points and 6,500 points before the Lunar New Year holiday, Yu said.
During the speech, Chen said, "The complexity of cross-strait economic and trade policy-making should not be simplified into either `opening up' or `tightening up'; nor should `active opening' be given too much emphasis while neglecting the more important `effective management'."
Business leaders are concerned Chen's remarks may spark further speculation on the possibility of increased tightening up of regulations, but an economist said the president's announcement would not necessarily lead to any more restrictions.
"It is necessary to review cross-strait policy, because the current system only seems to constrain law-abiding companies, but does nothing about those who dodge the legal restrictions," said Kung Ming-hsin (龔明鑫), a department director at the Taiwan Institute of Economic Research.
"Policy cannot be to every group's benefit ? but it is necessary for the government to achieve a balance of interests that is beneficial for all concerned parties," Kung said.
Kung hoped the government could come up with explicit and consensus-based management principles via constructive discussions with the business community, academia and the opposition parties, so that people and enterprises have clear rules to follow.
Business leaders said they still want the government to lift cross-strait barriers for the sake of competitiveness. They called on the government to adhere to the path of opening-up, and to implement its `effective opening' plan as it had promised.
Luo Huai-jia (羅懷家), executive director of the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA, 電電公會), said the government should allow Taiwanese companies to leverage their advantages to help sharpen their competitive edge, in a bid to catch up with the region rising stars, LG Electronics and Samsung Electronics Co, as China has become the second-most significant market worldwide.
According to the organization, TEEMA represents over 4,000 companies.
The government should at least carry out what it has promised, like granting the applications by Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technology Inc (茂德科技) to relocate their old, eight-inch wafer