The European Chamber of Commerce Taipei (ECCT) called for urgent government action to boost the nation’s competitiveness as Taiwan has lagged behind its main trade rivals in GDP growth for the past 12 years.
Releasing its annual position papers yesterday, the foreign trade group said Taiwan’s business environment was deteriorating, except for the financial sector, and branded tighter indoors wiring regulations implemented in January a “worrying instance of protectionism.”
“Taiwan has many advantages but more could be done to boost competitiveness, trade and investment,” ECCT chairman Chris James told a media briefing.
Taiwan’s economy is the weakest among the “Four Asian Tigers,” with GDP growth averaging 4.1 percent in the past 12 years — lower than Hong Kong and South Korea’s 4.5 percent and Singapore’s 5.9 percent, the papers said.
The downward trend has worsened this year, with Taiwan posting GDP growth of 0.1 percent in the first half, making it the worst performer in Asia, the papers said.
While Taiwan has a good transport and communications infrastructure, a relatively consistent legal system, a highly skilled and stable work force and a functioning universal healthcare system, it risks falling further behind unless action is taken, James said.
Specifically, the ECCT pressed for adoption of international standards, fewer restrictions on imports from China, a trade enhancement measure agreement with the EU and rapid development of Taiwan as an offshore yuan market.
The guidelines for directive 401 on the indoors wiring standard deviate from standard international regulations and practices by requiring factories to be certified according to ISO/IEC 17025 standards rather than ISO 9001, James said.
“The Taiwan-only requirements put the nation at a disadvantage and tarnish its international image and reputation as a good place for foreign investment,” James said.
Yitsai Qiao (喬軼才), country president of Schneider Electric Taiwan Co (施耐德), said foreign firms might adjust their setup in Taiwan if policymakers refuse to soften, because the local market is not big enough for Taiwan-only accommodations.
International electrical equipment vendors supply more than 80 percent of Taiwan’s market needs, including bullet train and Metro Kaohsiung services, Qiao said, adding that advanced technology could be at risks if foreign companies were to pull out.
Godwin Chang (張建西), chief country officer of Societe Generale’s Taipei branch, urged the government to ensure full connectivity and free movement of the yuan between Hong Kong and Taipei through designated clearing banks and allow the opportunity to create another platform for international issuers to consider raising debt in Taiwan as an alternative to Hong Kong.
“It is not enough for Taiwan to catch up with Hong Kong, but it should seek to overtake it” as the region’s offshore yuan trading hub, Chang said.