Tue, Aug 01, 2000 - Page 1 News List

Industrial group urges officials to think direct links

TWO-WAY TRADE Having demonstrated its resolve to compete in the Chinese market -- with or without government approval -- Taiwan's high-tech sector says it now wants direct trade

By Dan Nystedt and Patrick Kearns  /  STAFF REPORTERS

Taiwan's top industrial group yesterday urged economics officials to open direct links with China and thereby eliminate the need for trade to go through Hong Kong.

Speaking to pundits from government, research and commercial sectors, chairman of the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA, 台灣區電機電子工業同業公會) Richard Wu (吳思鍾), said members of his association need a clear cross-strait policy under which to plan strategies for investment and trade in China.

The association currently represents over 4,600 companies in fields ranging from semiconductors to telecommunications equipment and information technology.

Wu urged the government to speed up the lifting of the "three links" with China -- the government's ban on trade, transport and communications -- pointing out that the nation's businesses could save a great deal of money each year.

According to Wu, 20 million Taiwanese visitors travel to China via Hong Kong each year, pumping an estimated NT$50 billion into Hong Kong's economy, since travelers are forced to reroute through the former British colony instead of flying direct.

Wu also pointed out another service sector earning money unnecessarily -- Hong Kong and Chinese banks. Without Taiwanese banks being able to set up branches in China, local companies are forced to make transactions and take out loans with Chinese-owned banks. According to Wu, paying interest and transaction costs to Chinese banks helps them "get richer while we get poorer."

According to officials from the MOEA's Investment Commission(投資會), electronics investment in China skyrocketed from 14 percent of all China-bound capital in 1999, to 64 percent this year.

TEEMA, which claims to account for more than 50 percent of the total value of Taiwan's industrial production, has insisted for months that the ban on direct air links with China could harm the competitiveness of Taiwan's high-tech industry.

Alarm bells have been sounding across commercial boardrooms nationwide ever since the new administration came into office, as many feel the government has put too much emphasis on welfare, leaving economic development a low priority.

According to one electronics firm, many local players have a lot of catching up to do if they are to compete in China.

"Companies like Motorola and Matsushita started doing business in China years ago ... and a number of Hong Kong firms also had a head start on us," said Lin Mao-chuan (林茂泉), president of the Hotai Corp (和泰電機公司), a power switching supply company that entered the China market in 1988. "They can invest in China without applying to their own government, but if we want to invest in China, we have to sneak in, " Lin said.

"The lack of clear policies really hurts companies. When the government makes a policy then suddenly changes it, that really affects businesses. How can companies plan their strategy under these circumstances?"

Meanwhile, speaking on the cross-strait trade issue yesterday, President Chen Shui-bian (陳水扁) said, "We are still planning for the opening of the `three links' by year-end, but that does not mean we can implement the plan by then."

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