Thu, Feb 05, 2009 - Page 3 News List

SEF chief defends trade policy with PRC

NOT A BAD THING Reliance on other countries is not permanent, Chiang Pin-kung said, adding that at one point, the US accounted for 50 percent of Taiwan’s exports

By Ko Shu-ling  /  STAFF REPORTER

Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤) yesterday dismissed criticism of Taiwan’s economic relations with China as unfounded, saying that Taiwanese investment in China meant China needs Taiwan and that Taiwan should be worried if China no longer needed it.

“Reliance is not a bad thing, but over-reliance is a problem,” he said. “We’d have to worry if China said it didn’t need us anymore.”

Reliance on other countries isn’t permanent and Taiwan must strengthen its economic power and minimize the impact of over-reliance on China, he said.

Chiang made the remarks after a workshop on international trade for university students organized by the China Youth Corps.

Chiang said Taiwan used to rely on the US economically. At the peak of Taiwan-US trade, the US accounted for about 50 percent of the country’s total exports. It now accounts for 12 percent, he said.

China, which accounts for 40 percent of Taiwan’s total exports, has replaced the US as the country’s first overseas market, Chiang said. Chiang said that ASEAN’s beginning to offer zero tariffs on Chinese products next year would put Taiwan in an unfavorable position.

Seeking similar treatment, the administration has mulled the possibility of signing a comprehensive economic cooperation agreement with China, he said.

Another way to minimize the risk of over-reliance on China was to allow more Chinese investments to enter the local market, he said, because it would make China depend more on Taiwan.

“In international trade, whoever has the competitive edge has the advantage,” he said. “What really matters is whether we can augment our technical abilities and remain competitive.”

Chiang said cross-strait negotiations would proceed gradually, starting with the easier and more urgent issues and moving toward more difficult and less pressing ones. Economic matters have priority over political ones, he said.

Political issues would mainly focus on President Ma Ying-jeou’s (馬英九) election platform, he said. They would include establishing a military confidence-building mechanism, signing a peace agreement and expanding the country’s international space.

The SEF would not begin negotiations on those issues until government agencies have completed comprehensive studies and analysis on the issues and the Mainland Affairs Council authorized the foundation to negotiate, he said.

Rather than sending its own negotiators, Chiang said the foundation’s role was to “build a platform” where government officials can talk.

“Even if there were political issues involved in the bilateral negotiations scheduled for this year, they are not what the foundation can discuss at the table,” he said.

Asked about China’s human rights records, Chiang said the foundation was concerned about human rights violations in China, but that it was not a priority at the moment.

Amid concerns that many Taiwanese products are made in China, Chiang said brand and the quality of products were more important than where they are made.

On accusations that the government has borrowed money to revive the economy, Chiang said many countries placed more importance on resuscitating the economy than balancing their budgets.

The global economic downturn could be an opportunity for businesses, he said, because of falling prices. The Chinese market holds many opportunities, but also many traps. But the investment situation in China is no worse than in Southeast Asian countries because both sides speak the same language and an authoritarian regime is more efficient, he said.

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