Economic academics and former government officials urged the government yesterday to take notice of the risks involved in cross-strait economic and financial cooperation and map out precautionary measures to deal with adverse circumstances.
Taiwan Stock Exchange former chairman Wu Rong-i (吳榮義) made the remarks at a symposium held in Taipei.
Titled “Honey or Knife? The Effects and Consequences of Cross-Taiwan Strait Economic and Financial Cooperation,” the symposium was the first of four sessions of the Taiwan Thinktank Forum hosted by the pro-independence Taiwan Thinktank NGO.
Taiwan Thinktank chairman Chen Po-chih (陳博志) said that as all policies have their pros and cons, risk assessment and precautions or countermeasures were necessary to minimize the harm they might cause. However, he said, the government has only focused on the benefits of economic and financial cooperation with China, while neglecting the potential risks and possible long-term consequences.
“If someone wants to eat honey with a knife, at least you have to let him know that he might get hurt,” he said.
Noting that 40 percent of Taiwan’s total exports go to China and that shipments to China suffered a dramatic 38 percent drop last month, Chen said this has significantly impacted the country’s economy.
“It is like putting all your eggs in one basket,” he said.
Saying that a financial memorandum of understanding (MOU) covering the banking and securities sectors might be signed during the next round of cross-strait talks, Shih said Taiwanese banks would not be equal to their Chinese counterparts in terms of market opportunities because the scale of the Chinese banking market was much larger than in Taiwan.
He said that signing such an MOU would be in China’s favor because.
According to Chinese regulations, he said, only about 10 Taiwanese banks would be able to meet the thresholds for setting up branches and would not be allowed to accept Chinese currency deposits until three years after their establishment, placing severe restrictions on their ability to turn a profit.