The growth rate of Taiwanese exports to China has not increased as much as expected since the Economic Cooperation Framework Agreement’s (ECFA) early harvest program of tariff reductions began taking effect on Jan. 1, according to the results of a survey released yesterday by a local weekly.
Although Taiwan has the advantage of tariff incentives in its trade with China, which South Korea and Japan do not have, those two countries still posted higher export growth rates than Taiwan during the first seven months of the year, deputy editor-in-chief of Taipei-based Business Weekly, Vivien Liou (劉佩修), said at a press conference in which the survey results were announced.
Between January and July, exports to China of the 539 items covered under the early harvest program totaled US$11.8 billion, up 14.4 percent from the same period last year.
That was lower than the 17.5 percent compound annual growth rate of the same exports to China between 2006 and 2008, before the global economic downturn hit, Liou said, and also poorer than the exports to China of other countries in the region without ECFA benefits.
According to the weekly’s figures, Japan and South Korea saw exports of the same group of products to China grow at rates of 14.96 percent and 28.91 percent respectively.
However, exports of products covered by the ECFA did benefit to some extent, according to Central News Agency’s calculations, based on Chinese customs and Business Weekly figures. The 14.4 percent export growth was nearly double the 8.7 percent growth of Taiwanese exports to China that were not covered in the early harvest list.
Sophia Shih (史惠慈), a researcher at the Chung-Hua Institution for Economic Research, was quoted as saying that if South Korea, Taiwan’s principal trade rival, were to sign a free-trade agreement (FTA) with China, it would be “the most powerful rival” to the ECFA.
Shih also said that it would be very difficult for Taiwan to sign FTAs with the EU, ASEAN and the US in the short term, which means that the Chinese market is therefore “Taiwan’s only chance to beat [South Korea].”
Under the terms of the ECFA, China will remove tariffs on all Taiwanese goods and services on the early harvest list in three phases over two years, with the tariff-free goal scheduled to be achieved in January 2013.
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