Having China open up more service categories to Taiwan, while Taiwan offers less is not necessarily better for Taiwan. Taiwan needs to combine the interests and strengths of its domestic services sector and use these talks to demand large-scale mutual liberalization with China if it wants to be able to attract investment and talent from overseas.
At the very least, it should demand that China remove trade barriers on items in which it offers free access to other countries or areas, those it has exclusively opened to Hong Kong, the main items on the service industry development part of China’s 12th Five-Year Plan, the many items that Taiwan has opened up to a greater degree than China has and those items on which Taiwan is relatively strong and China is relatively weak.
Looking over this agreement, Taiwan has done well for itself when it comes to e-commerce. Nevertheless, there is also a considerable amount of items that China has opened up to other countries that Taiwan has not demanded, including real estate, market research, management and consulting, environment, entertainment, science and technology consulting, printing and publishing, and personnel placement. China has also liberalized a total of 22 items exclusively to Hong Kong, but Taiwan has only asked for three. Moreover, of the 16 services targeted by the 12th Five-Year Plan, Taiwan has only asked for four to be opened up as part of this agreement.
Finally, of the seven items that Taiwan has opened up to a far greater degree than China has, Taiwan has only asked for one to be further deregulated.
If Taiwan wants to put an end to the decline of its international competitiveness and the ongoing capital and brain drain, it needs to have a consolidated services sector and a liberalization strategy. Whether it can get China to liberalize more items in the service trade between the two countries depends upon how much it is willing to open up. If Taiwan simply wants China to make more concessions to benefit certain sections of the industry, then of course China’s degree of openness to Taiwan is going to be limited.
Taiwan has missed an opportunity here to use cross-strait trade in services liberalization to expand the nation’s service sector.
Tung Chen-yuan is a professor in the Graduate Institute of Development Studies at National Chengchi University. Lin Yu-lung is a graduate at the institute.
Translated by Paul Cooper