Taiwan should broach the issues of non-tariff barriers and unspoken business rules that undermine Taiwan businesspeople’s competitiveness in China during trade talks with Beijing, local academics said yesterday.
The academics made the comments at a forum organized by the Taipei-based Chinese National Federation of Industries on China’s economic situation and Taiwan’s investment strategy in China. The forum was held as follow-up talks on the Economic Cooperation Framework Agreement (ECFA) covering trade in goods and services and a dispute settlement mechanism are currently underway. Taiwan and China have agreed to prioritize services during the talks.
Chang Wu-ueh (張五岳), director of the Graduate Institute of Chinese Studies at Tamkang University in New Taipei City (新北市), said there are more than 87,000 Taiwanese firms operating in China, most of which are struggling with the rising prices of raw materials, surging cost of labor, shortage and rapid turnover of workers, and experiencing difficulties securing loans.
Chang added that the majority of Taiwanese businesses in China are producing goods for foreign markets and as such, they are facing greater problems than their Chinese counterparts, because China is changing its economy from an export-driven one to one powered by domestic consumption.
“While talking with their Chinese counterparts about cross-strait trade in services, Taiwan’s negotiators should address the issue of non-tariff barriers and see to it that China carries out its agreements with Taiwan thoroughly,” Chang said.
As far as good trade is concerned, Chang said Taiwan should think whether it is worthwhile to protect its agricultural sector at the cost of chances to sell more expensive industrial products to China.
In order to avoid the two sides investing in the same industrial fields and competing against each other, Chang said the countries should buy stakes in each other’s companies and Taipei should consider allowing Chinese investors to stay on the island for the mutual benefit of both sides.
Lin Jan-yan (林震岩), a professor at the Chung Yuang Christian University in Chungli, Taoyuan County, said Taiwanese businesspeople’s operations would run much more smoothly if China would tackle the prevailing corruption among its officials.
He said that most Chinese firms do business through their connections with officials and Taiwanese businessmen therefore cannot compete with them on equal footing, not to mention in getting bank loans or government grants to expand their operation.
What is worse, Lin said, China’s local governments are skewed in favor of Chinese firms when judging their trade disputes with Taiwanese firms.