People who possess large amounts of capital appeared to reap benefits from the Economic Cooperation Framework Agreement (ECFA), while those on the lower end of the economic scale absorbed the costs, a recently released report on the cross-strait trade pact signed in June last year suggested.
The report, conducted by National Sun Yat-sen University, was commissioned by the Executive Yuan’s Research, Development and Evaluation Commission in hopes of gaining a better understanding of attitudes in southern Taiwan toward the ECFA and making the government more aware of the causes of objection to the ECFA from people in the south.
Claiming that southern Taiwan, whether one considered it from the perspective of political development, industrial economics or social structure, was considered a disadvantaged area, the report said that following the implementation of the ECFA, the trade pact resulted in “more negative impacts than positive benefits” to industries in the south.
As such, it made southern Taiwan a region in need of a buffer period and related complementary measures, it added.
The report said that collective views gathered from leading figures in the industrial sectors in Greater Kaohsiung and Pingtung County suggested many were of the opinion that the south profits less, yet pays more of the costs of the ECFA than northern Taiwan.
The report also compared the ECFA to other instances of economic integration, citing the Closer Economic Partnership Arrangement (CEPA) between China and Hong Kong as an example, which it said had brought limited economic benefits to the Chinese territory.
The CEPA is a trade agreement that was signed in June 2007 to promote the joint development of both Hong Kong and China.
According to the report, the CEPA was not successful in bringing back Hong Kong businesspeople who had invested in China in hopes of stimulating Hong Kong’s manufacturing sector.
After the signing of the CEPA, Chinese investors flooded the Hong Kong real-estate and stock markets, causing housing prices to skyrocket, the report said, adding that Hong Kong now has one of the largest wealth gaps among the world’s developed economies.
The report also mentioned a further outflow of Hong Kong’s manufacturing and production services after the signing of the CEPA. Hong Kong’s service industry also moved north into China, causing a second exodus of the territory’s industry, it said.
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