Taiwan would feel more at ease in relaxing restrictions on China-bound investment if Beijing is willing to make a public promise not to adopt unfair trade barriers against Taiwan companies, a senior official said yesterday.
Chen Po-chih (陳博志), chairman of the Cabinet-level Council for Economic Planning and Development, made the remarks while attending a seminar on Taiwan-US-China economic and financial relations in the era of the new economy.
Chen said whenever Taiwan exports a large amount of certain products to China, Beijing authorities tend to ask Taiwan-financed firms in China to switch their orders for those items to mainland manufacturers, or impose unfair administrative barriers to force Taiwan entrepreneurs to set up production lines in China.
In Chen's view this unfair trading phenomenon is not expected to stop after both sides of the Taiwan Strait are admitted to the WTO in the near future.
Chen explained that Taiwan will join the WTO as a developed economy, while China will enter the world trade regulatory body as a developing economy.
Logically, Chen said, developed economies should assist developing countries in economic development by offering them preferential treatment.
"But this practice usually would give developing countries opportunities to impose unfair trade barriers. And Taiwan still cannot afford to do so because its per capita national income is the lowest among all developed countries," Chen said.
The nation's top economic planner said he hopes all developing countries would refrain from abusing their power to create unfair market competition.
At present, Chen said, Taiwan's overall investment in mainland China accounts for 1 percent of Taiwan's gross domestic product.
"As Taiwan still has a 2 percent excess savings rate, its mainland investment would not have a serious impact on the nation's domestic capital supply. When the outbound investment ratio exceeds 2 percent of its GDP, Taiwan's domestic investment and economic development would be affected," he said.
Chen further said Taiwan-US-China trade interdependence has grown and deepened steadily. "As China has gradually become an important part of the global supply network, any political conflict in the region would certainly result in adverse economic impact," he explained.
According to Chen, the relocation of Taiwan's personal computer production lines to China would not only hinder Taiwan's own economic development and high-tech industries but would also affect the US computer industry which relies heavily on Taiwan's OEM (original equipment manufacturing) services.
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