The petrochemical, machine tool and steel sectors would likely be the hardest hit if China were to terminate the Economic Cooperation Framework Agreement (ECFA) or some of the early harvest lists, Executive Yuan Secretary-General Li Men-yen (李孟諺) told a meeting of the Legislative Yuan’s Internal Administration Committee yesterday.
Li’s comments came in the wake of remarks by the Chinese Ministry of Commerce that it is looking to terminate the ECFA in full or rescind some of the preferential tax rates for Taiwanese products.
Democratic Progressive Party (DPP) Legislator Chuang Jui-hsiung (莊瑞雄) asked how the government intended to respond to China setting the date to announce the results of a probe into whether Taiwan’s trade policies constitute a trade barrier one day before the legislative and presidential elections in January.
Photo: George Tsorng, Taipei Times
The government should assist Taiwanese businesspeople as it begins to reduce its reliance on Chinese trade, Chuang said.
The government has been diversifying its market over the past few years, with trade volume to countries under the New Southbound Policy doubling, while exports to China have dropped from 43 percent to 35 percent, Li said.
Fruit exports to China have dropped to 10 percent from 80 percent, he said.
China’s petrochemical industry is in full production, which could result in a situation similar to what the solar panel industry is facing, he said.
Solar panel producers have been affected by China’s actions in the past few years, he said, citing South Korea’s import surplus over the past two years.
The Ministry of Economic Affairs has worked hard to hold talks with affected industries, and the government can assist the sectors to diversify their markets while increasing production quotas, Li said.
Measures include creating niche products, such as smart products or products and services that would decrease carbon emissions, he said.
Chuang said that “China is no fool” and would weaponize the economy in response to Taiwan’s attempts to mitigate risks and exit the Chinese market.
China could restrict Taiwanese businesspeople from leaving the country, or detain them, he said.
The government should warnTaiwanese businesspeople in China and expand its efforts to provide humanitarian aid, he added.
Li said that Taiwanese businesspeople in China should be aware that Beijing is capable of “disappearing” Chinese citizens, even Alibaba Group Holding Ltd founder Jack Ma (馬雲), and imposing restrictions and auditing them.
Taiwanese in China must be on high alert, he added.
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