The Ministry of Economic Affairs yesterday threw its support behind the Kuokuang Petrochemical project (國光石化), saying that failure to go ahead with the project could risk jeopardizing Taiwan’s competitiveness in the regional petrochemical industry and prompt local companies to move offshore.
“If the project doesn’t proceed, the downstream companies would move offshore, causing petrochemical players from the private sector to withdraw at least NT$200 billion [US$6.2 billion] of planned investment from Taiwan,” the ministry said in a statement.
Kuokuang Petrochemical is a joint investment by state-owned CPC Corp, Taiwan (中油) and the private sector. The project is set to churn out resources, including rubber, plastics and special chemicals, to be applied in the production of a variety of products, including electronics, computers, solar cells and biotechnologies , the ministry said.
If the project is vetoed, Taiwan would lose its competitiveness in the industry to Singapore, whose population and territory are much smaller. Singapore has only 18 percent of Taiwan’s population and a land mass of 2 percent of Taiwan.
The ministry said that this year Singapore began to enjoy tariff-free imports of petrochemicals from China, thanks to the signing of a free-trade agreement.
The Southeast Asian city-state has seen a number of foreign investors setting up petrochemical projects on Jurong island, which is set to boost Singapore’s economy with petrochemical output expected to match that of Taiwan next year, the statement said.
The ministry’s response came after opposition raised by Academia Sinica research fellows and a number of renowned academics, including Lee Yuan-tseh (李遠哲), who are against the petrochemical complex that Kuokuang Petrochemical Technology Co (國光石化科技) plans to build on coastal wetlands in Changhua County.
An opposition proposal states that in order to protect public health and the local eco-system, as well as to promote a national policy of energy conservation and carbon reduction, the government should suspend plans for further petrochemical plants because they produce huge amounts of carbon dioxide.
However, the government defended the project, saying more investment would be attracted to Taiwan if the plant is built, especially after signing the Economic Cooperation Framework Agreement (ECFA) with China last month.
More firms would set up production facilities in Taiwan to make use of close access to abundant petrochemical resources, if the Kuokuang plant goes ahead, the ministry said.
The Kuokuang investment would provide NT$56.6 billion in tax revenues, as well as create as many as 18,000 jobs, thus benefiting Taiwan’s economy the ministry said.
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