Sat, Jun 26, 2010 page11

• ECFA may face resistance from Chinese businesses

  ZERO-SUM GAME Japanese newspapers yesterday reported that the ECFA could benefit Taiwanese firms at the cost of Japanese and South Korean competitors

  • STAFF WRITER, WITH CNA
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  Taiwan’s service sector might face a boycott or resistance from Chinese counterparts even though certain service businesses have been put on an “early harvest” list under a soon-to-be-signed economic cooperation framework agreement (ECFA) with China, a China-based business advisor said yesterday.

  Taiwan and China on Thursday exchanged their “early harvest” lists of items that will be subject to tariff waivers or easier market access under the trade pact.

  After the ECFA is signed Taiwanese investors would be allowed to set up wholly owned hospitals in major areas such as Shanghai, Jiangsu Province and Fujian Province, while Taiwanese banks would be granted preferential status relative to foreign counterparts when opening branches or subsidiaries in China.

  However, Lee Jen-hsiang (李仁祥), general manager of Kunshan-based Hamber Consultant Services Co (漢邦企業管理顧問), said things are unlikely to proceed as smoothly as many Taiwanese investors are anticipating.

  “The Chinese service sector will resist the opening out of concern that foreign investors will compete with them and take away their business,” Lee said. “The signing of the ECFA is just a beginning. Taiwanese investors are still expected to face a great deal of difficulty getting into the Chinese market ... It will take time.”

  Lee said Taiwanese investors will need to take on bureaucratic red tape as they seek regulatory approval to open hospitals in China, adding that resistance or boycotts from Chinese hospitals could further complicate the application process.

  He said he did not expect state-owned Chinese hospitals, which provide poor service but chalk up a large number of patient visits, to welcome competition from Taiwan.

  While many Taiwanese banks are eager to establish footholds in China, it will not be easy for them to find good locations, as most of the existing premier office space in major cities is occupied, he said.

  Lee said it was likely that Taiwanese banks would have to wait for two to three years until construction of new commercial buildings has been completed before they can find suitable office locations.

  Separately, major Japanese newspapers yesterday reported that the preferential tariffs Taiwanese goods could enjoy under an ECFA would be beneficial to Taiwan’s companies, but might affect Japanese or South Korean industries.

  Nihon Keizai Shimbun said that Taiwan’s LED-panel and automobile sectors, which could compete directly with those from Japan and South Korea, are not included in the trade pact’s “early harvest” list.

  But if more items are granted tariff reductions or exemptions in the future, the agreement could possibly provide a boost to Taiwanese businesses, the paper said.

  To Japanese businesses, the inking of the ECFA would mean that Japan could more flexibly divide its production bases on the two sides of the Taiwan Strait, the paper added.

  Sankei Shimbun, another Japanese daily, concluded that based on the information made public on Thursday, the “early harvest” list was more favorable to Taiwan than to China.

  It speculated that China is accepting a pact that favors Taiwan with an eye on gaining leverage to move from economic integration to political integration.

  Asahi Shimbun said that, overall, China has made greater concessions, while Yomiuri Shimbun said the concessions could be seen as a gesture by China to woo Taiwan back into its fold.
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