Taiwan shouldn’t hurry to sign an economic cooperation framework agreement (ECFA) with China unless Beijing promises not to block the country’s chances of also inking bilateral agreements with ASEAN countries, said Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院).
“We should wait and keep negotiating with China,” Liang told the Taipei Times last week. “We’ve got to try to get China’s understanding or promise that it will let Taiwan sign other kinds of [economic] framework [agreements] with ASEAN countries.”
Liang said both Singapore and Vietnam — albeit they are exceptional cases — should have an interest in signing bilateral agreements with Taiwan after the ECFA with China is signed.
He said Taiwan should be at ease if its economic relationship with China was similar to the relationship between an elder brother and a younger brother.
“However, our relationship with China should never turn into that of a father and his son,” Lai warned.
Citing an Asian Development Bank report in 2007, Liang said Taiwan would be negatively impacted by the implementation of ASEAN Plus One, followed by ASEAN Plus Two and Three.
It will therefore be important for the economy that Taiwan finds ways to penetrate the Asian trade bloc because ASEAN Plus Three accounts for more than 40 percent of the world’s population, he said.
An ECFA with China won’t be powerful enough for the nation to enhance ties with ASEAN countries if Taiwan is blocked from inking pacts with individual ASEAN countries or the bloc as a whole, he said.
Despite the fact an ECFA is expected to trigger capital inflows to Taiwan, Liang said he expects the central bank will keep the New Taiwan dollar’s exchange rate as stable as possible, within a range of NT$31.5 and NT$32.3 against the US dollar.
“NT$31.5 may be the highest threshold the central bank could tolerate,” Liang said.
He reiterated his view that the central bank will not raise interest rates before June given that the economic recovery is still nascent.
“The economy has improved, but don’t get too excited about it,” he said.
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