As the months roll by, the public is still waiting to hear the details of a planned economic cooperation framework agreement (ECFA) with China.
The benchmark TAIEX has jumped 49.2 percent this year on ample liquidity, but a sudden pullback of more than 3 percent last Monday 〞 on speculation that the government could delay signing an ECFA until next year 〞 suggested that investors were looking for an excuse to take a breather, especially considering that economic fundamentals have not motivated the high stock valuations of late.
It could also indicate that investors are watching the ECFA discussion with baited breath, even though the pact＊s details remain a mystery.
The TAIEX fell 239.04 points, or 3.53 percent, to 6,530.82 on Monday, then climbed 108.59 points, or 1.66 percent, the next day following comments by Premier Liu Chao-shiuan (?欳哱) and other government figures at a meeting with business leaders. The government said preparations for inking the pact were proceeding as planned.
The fuss surrounding the ECFA has been amplified by the fact that the government has not completed a study on the potential impact or made public the content of the proposal.
It has, however, said that an ECFA would secure tax cuts from China for Taiwanese businesses, in addition to other benefits, including investment guarantees, deregulation of the service sector and protection of intellectual property rights.
Whether talks on the ECFA should be included on the agenda for the fourth round of cross-strait negotiations this year is for the government to decide. What should concern investors is not how soon the pact will be inked, but what it consists of and whether it will be implemented effectively.
Investors have overlooked the fact that the ECFA has political implications as well. In terms of discussing the ECFA with the public, the government does little more than emphasize its urgency. Investors should not be satisfied. Until the government reveals its vision for the pact, it will remain impossible to speculate on the potential positive and negative effects.
Unfortunately, Liu, Minister of Economic Affairs Yiin Chii-ming (窇??), Minister of Finance Lee Sush-der (燠扴肅), Council for Economic Planning and Development Chairman Chen Tain-jy (?氝皉) and Financial Supervisory Commission Chairman Sean Chen (?喳), who attended Tuesday＊s breakfast meeting with representatives of the Chinese National Association of Industry and Commerce, seem uninterested in anything but the benefits for large corporations.
Despite the government＊s cheer, it remains unclear what effect an ECFA would have on domestic unemployment, small and medium-sized enterprises and local industries.
With bullish sentiment gaining momentum on the stock market following better-than-expected second-quarter reports by many US and local companies, investors should feel comfortable increasing their holdings.
They should not, however, let a vague understanding of the government＊s plans for an ECFA lead them to misjudge investment priorities. The ECFA is not only a bone of contention between the two major political camps; industrial and business groups are equally divided.
A recent report concerning a student who is suing his teacher posed the question in its headline: Does failing a student in two subjects constitute bullying? The college student in Chiayi County apparently sought NT$2 million (US$63,603) in state compensation, but a court dismissed the case. The first reaction of many might have been to ask: What has happened to students nowadays? Some say that teachers have lost their authority, while others say students are overindulged. Some even start reminiscing over the days when “whatever the teacher says goes.” However, the real issue might be overlooked if emotional reactions like that are the
When I visited Taiwan last summer, I called on the nation to use its status as a technology superpower to build superweapons. It is obvious to me as I return a year later that Taiwan is now answering that call. By 2030, Taiwan envisions a domestic drone hub, capable of producing large quantities of drones per year. The nation continues to tighten cooperation across the private sector, scientific researchers and the elected government, on creating new and innovative production avenues for defense, while efforts to become central to the “democratic supply chain” are only increasing. Anduril is seeing all of these positive
Singaporean former Prime Minister and current senior minister Lee Hsien- Loong(李顯龍) last month stood on Chinese soil and told Beijing that Singapore cooperates because of “shared interests”, not because of common “ethnic descent,” a significant statement that has upended China’s cognitive warfare tactics of “ethnic nationalism.” Along with using its military buildup and economic growth to expand its international dominance, China has long deployed ethnic politics to promote the idea that all ethnic Chinese around the world, regardless of citizenship, share a tight bond with the Chinese motherland, by which it means the regime of the People’s Republic of China (PRC)
President William Lai Ching-te’s (賴清德) May 20 second-anniversary address was not just a routine policy review; it was damage control. US President Donald Trump’s remarks — that he did not want to see anyone move toward independence and that the delivery of a major Taiwan arms package could depend on the progress of US-China relations — unsettled Taiwan’s public and created an opening for opposition parties to question whether Taiwan was being treated as a bargaining chip in Washington’s dealings with Beijing. Lai’s speech was designed to close that opening. The address covered the expected ground: sovereignty, cross-strait relations, defense spending,
RSS