Sat, May 14, 2011 - Page 8 News List

Judging the ECFA’s effects a year on

By Tung Chen-yuan 童振源

Fifth, following the implementation of the ECFA, Taiwanese investment in China continued to grow rapidly. In 2008, Taiwanese businesspeople invested US$10.69 billion in China, an increase of 128 percent. In 2009, the figure was US$7.14 billion, 33 percent less than the year before because of the impact of the international financial crisis.

Last year, investment increased by US$12.23 billion, an 102 percent increase. In the first quarter this year, Taiwanese investment in China continued its rapid increase, growing by 65.4 percent, or US$3.71 billion, although Taiwanese foreign investment has declined by 4.8 percent.

Sixth, following the implementation of the ECFA, Taiwanese capital has continued to flow out of the country. During the three years of Ma’s presidency, a net average of US$20 billion of international capital has flowed out of Taiwan annually, much more than the US$13.2 billion that flowed out of Taiwan every year under the DPP administration.

In particular, a net US$12.4 billion of international capital left Taiwan in 2009, a number that more than doubled, to US$29.3 billion, last year, the year the ECFA was signed.

During Ma’s three years in power, industry has generally felt that cross-strait relations have stabilized and that the economy has opened up. In addition, industry already had high expectations of the ECFA effect and had ample time to prepare investments.

This means that it is not too early to discuss the ECFA effect. Perhaps parts of the ECFA will need more time to develop, but the data described here should be sufficient warning to the government of the need to review the situation in order to strengthen and improve Taiwan’s investment environment and implement appropriate adjustments to Taiwan’s global trade strategy.

Tung Chen-yuan is a professor at National Chengchi University’s Graduate Institute of Development Studies.


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