The middle class would emerge as new losers if Taipei and Beijing sign an economic cooperation framework agreement (ECFA), the Taiwan Thinktank said yesterday.
Thinktank executive director Cheng Li-chiun (鄭麗君) said once an ECFA is signed, the jobs of Taiwan’s 5.9 million workers in service industries, traditional industries, electronics and petrochemicals would be threatened.
Cheng made the remarks during a panel discussion in Taipei yesterday. The event, titled “Who is the New Loser of ECFA — the Unemployment Crisis of the Middle Class,” was the second of a series of forums organized by the think tank to debunk what it called myths of the proposed cross-strait trade pact.
The Chinese Nationalist Party (KMT) government hopes to sign the proposed deal next month or in June. Taipei and Beijing concluded the second round of negotiations in Taoyuan last week.
Cheng said that while the government reiterated it would not allow more Chinese workers to enter the local market, it has amended certain laws and regulations to let them in under the categories of investment, business activities, international enterprises and professional technicians.
“We don’t have to wait until the ECFA is signed to see an influx of Chinese workers. They are already here,” she said. “What is more alarming is the unemployment of the middle class.”
Cheng accused Mainland Affairs Council (MAC) Chairwoman Lai Shin-yuan (賴幸媛) and Minister of the Interior Jiang Yi-huah (江宜樺) of lying about the negative impact of ECFA on white-collar workers.
Cheng said Lai claimed that only 13 white-collar Chinese are currently working in Taiwan and that each Chinese company investing US$33 million is allowed to send a maximum of seven managerial staff members here.
An MAC press release dated April 6 said that 15 white-collar Chinese have applied to work in Taiwan so far this year.
However, Cheng said, Lai failed to mention that Chinese-invested firms are allowed to send an unlimited number of professionals as long as they are considered to be “making a contribution” to the local economy, job market and society and obtain the approval of related government agencies.
While Lai emphasized the legislature must amend the Statute Governing the Relations Between the Peoples of the Taiwan Area and Mainland Area (台灣地區與大陸地區人民關係條例) before they could relax restrictions on Chinese labor, Cheng said Chinese nationals with a bachelor’s or master’s degree and two years of related experience can already work in Taiwan as a manager or professional technician.
The Ministry of the Interior also amended the Act Governing Approval for Mainland Area Professionals to Engage in Professional Activities in Taiwan (大陸地區專業人士來台從事專業活動許可辦法) last year and this year to allow Chinese nationals conducting business activities in Taiwan to stay longer, she said, adding that white-collar Chinese workers can also take advantage of cooperation between companies on both sides to work in Taiwan.
Liu Chin-hsin (劉進興), a chemical engineering professor at National Taiwan University of Science and Technology, said the ECFA would benefit certain industries such as petrochemicals, steel, textiles and machinery.
Taking the petrochemical industry as an example, Liu said the trade pact was bound to serve the interests of upper stream companies such as Formosa Petrochemical and CPC, Taiwan. The former is expected to benefit more because its products mainly target the Chinese market.
Liu said the ECFA would have a more far-reaching impact on Taiwan than the WTO. The administration must not only spend more time negotiating an ECFA, but also mapping out a contingency plan, he said.
Taiwan must also develop a closer relationship with the US, Japan and EU when seeking trade normalization with China, he said. Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University, said white-collar workers will not be the only ones suffering if an ECFA is signed. Traditional industries and small and medium-sized businesses would be hit hard as cheaper Chinese products flood the local market and salaries would nosedive, he said.
Chiou said the administration was “irresponsible” for claiming the proposed accord would boost GDP by 1.7 percent and create more than a quarter of a million jobs because the methodology and models that produced the figures were flawed.
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