Pact can create an uneven playing field: sporting goods sector

By Yang Ya-ming and Stacy Hsu  /  Staff reporter, with staff writer

Thu, Aug 29, 2013 - Page 3

The sporting goods industry has joined other service sub-sectors in raising concerns over the cross-strait service trade pact, saying that the agreement, which its critics have labeled a back-room deal between China and the Chinese Nationalist Party (KMT), could lead to unfair competition in the domestic market.

“The market order can only be maintained if the agreement provides a level playing field for both Chinese-invested sporting goods stores and local shops. If the former are allowed to import sneakers from international sports brands via their Chinese sales agents at lower prices, the latter could be forced out of business,” the owner of a Greater Taichung-based sporting goods shop surnamed Chen (陳) said.

Chen said the operating expenses for her shop, including rent, utilities and personnel costs, had surged over the past few years, greatly squeezing profits.

“Because of increasing price transparency, customers now know where to go to compare prices and how to use the information to ask for a discount, leaving store owners with no choice but to surrender part of their profits,” Chen said.

She said most of the products sold at her store are international sports brands, which operate through different sales agents in China and Taiwan.

Since Chinese sales agents are able to import products from the athletic gear manufacturers at lower prices, the government must ensure fair competition in the market by barring Chinese-invested shops from ordering goods through the brands’ Chinese sales representatives, she said.

Echoing Chen’s views, the proprietor of a sporting goods store in New Taipei City (新北市), surnamed Ma (馬), said local shops had already lost substantial business over the past few years because of the exodus of Taiwanese businesspeople to China.

“To make matters worse, the government has inked an agreement that allows Chinese investors to open sporting goods shops in the country, which would not only greatly reduce local stores’ market share, but could also drive us out of business,” Ma said.

Under the agreement, China would open 80 service sub-sectors to Taiwan, while Taiwan would open 64 sub-sectors to China. They include those related to commerce, telecommunications, construction, health, transportation and finance.