Sat, Jul 06, 2013 - Page 3 News List

SERVICES PACT: INTERVIEW: Government should halt implementation of pact: expert

National Taiwan University economics department chairwoman Jang Show-ling called on the government to suspend the newly signed cross-strait service trade agreement in an interview with ‘Taipei Times’ staff reporter Helen Ku. Jang said the feasibility of opening Taiwan’s market comprehensively to Chinese investors should be re-evaluated because it could bring more harm than benefits to local companies

Again, the government needs to safeguard not only Taiwan’s financial and economic interests, but also the values that generations of Taiwanese have fought for. No one want to see their homeland damaged with increasing Chinese investors. The majority of Taiwanese are proud of the nation’s freedom of speech and democracy.

TT: Is there a direct link between the service trade agreement and opening Taiwan’s labor market to Chinese job seekers?

Jang: The service trade agreement specifies that Chinese investors may apply for work permits.

Those who invest more than US$200,000 are entitled to apply for work permits for two Chinese workers serving as “persons in charge of private business,” “superior officers” or “experts.” These Chinese investors may apply for work permit for one more Chinese worker if they increase their investment by another US$500,000. In total, Chinese investors can apply for work permits for up to seven people.

Technically, the pact’s specific rules remain ambiguous because a noodle shop owner can be the person in charge of his business, while his wife could act as the shop’s superior officer and his children can be noodle experts.

If the pact does not clearly defines “persons in charge of private business,” “superior officers” and “experts,” how is the government going to assess each work permit application? Given that China is notorious for producing fake certificates and that buying forged certificates is easy, the government may not be able to safeguard the quality of Chinese investment, nor can it guarantee that Taiwanese workers will not face unfair treatment while working for Chinese employers.

The Ma Ying-jeou (馬英九) administration must not take for granted that Chinese government’s “generosity” or preferential treatment will only yield positive outcomes, but not prompt cases that Chinese investors immigrate to Taiwan under protection of the pact. Using the same language, Chinese may find it easier to break Taiwan’s law than doing so in their home country, if the government chooses to adopt an easy-going attitude.

TT: With an increasing number of Chinese tourists visiting Taiwan every year, can the pact create a “monopsony” market in Taiwan?

Jang: A monopsony market situation is likely to occur when an increasing number of Chinese tourists not only act as buyers, but also as investors and sellers in Taiwan.

Take Taiwan’s tourism sector as an example. Many Taiwanese travel agencies have faced difficult times as a result of the government’s policy of attracting more Chinese tourists. The Chinese tourists were led by Chinese travel agencies who took them to visit Taiwan’s attractions and provided them shuttle bus services on their trips. As a result, Taiwan-based travel agencies could barely make a profit from Chinese tourists. Severe competition due to disrupted market mechanism caused many travel agencies to close their businesses, and it is foreseeable that the pact could lead to similar situations in other sectors.

TT: What are the motives for signing the pact?

Jang: The service trade agreement is part of Chinese government’s ongoing “12th Five-Year Plan,” which is aimed at pursuing economic prosperity and is composed of a number of policies that also emphasize the ECFA.

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