Before these two agreements are signed, the council must first closely examine the results of the talks between the two sides. It must prioritize the needs of the zones, and it must do so to ensure their success even if it makes large concessions.
Secondly, the council must focus on the details of the zones’ operation. For example, the “front shop, back factory” model is often used to describe the industrial relations between Hong Kong and the Pearl River Delta economic hinterland.
If this concept is applied to Taiwan’s pilot zones, the people who were involved in economic development in the past should be consulted to help answer the question of how to strike the optimal balance between efficiency and controls so that these zones do not deteriorate into “drug smuggling pilot zones.”
Lastly, the ability to follow through on policy is a must. Also, focusing on attracting companies with products that have just gone on sale in the US, Europe and Japan, but not other Asian markets, would probably produce the best results. Overseas offices of the Ministry of Economic Affairs must do everything in their power to show that investing in Taiwan is worthwhile as this would set off a virtuous cycle. Economic pilot zones are an important way to revitalize the stagnant, depressed Taiwanese economy, and we can only hope that they will be successful.
Tu Jenn-hwa is director of the Commerce Development Research Institute’s business development and policy research department.
Translated by Drew Cameron