Mon, Aug 01, 2005 page3

• Taking economics and security into account

  `EFFECTIVE MANAGEMENT' Taiwan is hardly the only country that is worried about the long-term effects of transferring technology to China, as Chen's policies reflect

  • By Chiu Yu-Tzu / STAFF REPORTER
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  President Chen Shui-bian's (陳水扁) recent public comments have stressed that Taiwan should take both economic and national security interests into account, saying that "effective management" is a must for the government to control Taiwanese businesspeople investing in China.

  Chen's stance has been regarded by some economists as obvious reluctance to strengthen cross-strait economic ties in the near future. However, Cabinet officials said an improving local environment for investors and allowing products involving low-end technologies to be produced in China shows the government's aggressive attitude, and is a smart way to ensure national security.

  On July 26, when Chen spoke to the Foreign Correspondents' Club of Japan via videoconference, he stressed the necessity of limiting the number of products and technologies exported to China.

  "Do other countries sell their products freely to China without setting up regulations first? If all people believe in `business is business' only, why did the EU impose an arms embargo on China? And why did the international community, especially the Japan and the US, criticize the EU's recent move to lift the arms embargo?" Chen asked.

  Chen said that the Legislative Yuan is working on the establishment of laws regulating high-tech technology transfers to China, adding that, even for products involving non-sensitive technologies, the government will still be very cautious.

  However, Wu Chih-chung (吳志中), the secretary-general of the EU Study Association-Taiwan, told the Taipei Times that the EU's reluctance to lift the arms embargo on China was more about Beijing government's attitude toward human right issues rather than concerns with high-tech export.

  "EU regulations [the EU's 1998 Code of Conduct] prevent sensitive high technologies from flowing into China. But in Taiwan, even with similar regulations regulating the export of high-tech products and professionals, political turbulence hampers them from being implemented effectively," said Wu, who is also an assistant professor at Soochow University in Taipei.

  National Science Council (NSC) Minister Wu Maw-kuen (吳茂昆) told the Taipei Times that existing regulations can effectively prevent Taiwan's competitive technologies from flowing into China. Meanwhile, an improving local environment for both domestic and overseas investors has demonstrated the effectiveness of the policies and ensures Taiwan's economic development.

  Using Central Taiwan Science Park as an example, Wu said that in the last two years, the government has assisted in land acquisition and offered preferential treatment.

  "That's why the world's largest TFT-LCD manufacture, AU Optronics Corp, runs its business well at the park," Wu said.

  Wu said that because of the park's sound environment for high-tech firms in the photoelectronic industry, firms from related industries have also been encouraged to choose central Taiwan as their base.

  Statistics show that, in the last two years, the park has attracted 70 high-tech firms, which have invested NT$760 billion (US$228.2 million) and created 10,000 jobs. It's estimated that the total sales of the park's firms this year might reach NT$60 billion.

  "Shifting computer assembly lines to China is okay for Taiwan, as this is after all part of globalization. Our policies are designed to keep state-of-the-art technologies, which are the result of our R&D, at home," Wu said.

  However, Taiwanese economists specializing in China's economic development said that Taiwan needs to make a greater effort to protect its mature biotechnologies in the sector of agriculture.

  According to Chiu Chen Lee-in (陳麗瑛), a research fellow at the Chung-hua Institution for Economic Research, a serious issue behind recent controversies surrounding agricultural products exported to China is the lack of a list of Taiwan's agricultural technologies that deserve to be protected.

  "The Council of Agriculture (COA) has to make a list of our precious technologies developed in the past. Exporting Taiwanese agricultural products to other markets, including China, should be accompanied by well-designed regulations that ensure Taiwan's existing advantages," Chiu Chen told the Taipei Times.

  Chiu Chen said China's huge market has a lot of potential for manufacturers and firms in the service industry, while Taiwan's quality fruit exports to China -- which just dropped its import tariffs on 15 kinds of Taiwanese fruit -- were not a big issue for the rising economic power.

  "Once China asks Taiwan to import Chinese fruit under the framework of World Trade Organization, can we beat the products having competitive prices? That would result in a serious setback for Taiwan's agricultural industry," Chiu Chen said.

  Chiu Chen said that President Chen's reluctance to strengthen economic ties with China was more a political motive rather than an economic calculation.

  "In fact, the lack of a free market mechanism in China and the corruption of Chinese customs officers and officials at local levels might soon discourage Taiwanese people who are in favor of exporting agricultural products. The cost will increase sharply because of what it takes to smooth the process," Chiu Chen said.
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