Better ECFA terms needed: firms
By John Liu, The China PostTAIPEI, Taiwan -- Several Taiwanese businesses based in Hong Kong are arguing that the cross-strait Economic Cooperation Framework Agreement (ECFA) should be upgraded to match the terms inked in the Closer Economic Partnership Arrangement (CEPA) between mainland China and Hong Kong.
September 18, 2013, 12:11 am TWN
In an effort to attract foreign investment, Invest Hong Kong under the Hong Kong government held an event in Taipei yesterday boasting of the southern Chinese city's sound investment environment.
Many Taiwanese businesses have said both in public and private that Hong Kong possesses many business advantages in the Greater China area — which includes Taiwan, mainland China and Hong Kong. Taiwan needs to hurry to catch up, local businessmen have said.
Industrial Bank of Taiwan's Hong Kong branch chief Li Fang-yuan (李芳遠) drew a comparison between the CEPA and ECFA in a presentation. He said that new rules have been supplemented to the CEPA, which is at the forefront of international economic agreements. ECFA pales in comparison and upgrades to the agreement are required, Li said.
HK Business Environment Touted
A Taiwan entrepreneur who asked not be named said that businessmen from Hong Kong have long been able to set up individual business all around mainland China, which was only open to Taiwanese businesses in recent years. The Taiwanese businessman said that he had set up a company in Hong Kong long ago in order to enter the Chinese market.
A low tax rate, higher government efficiency and a mature financial system in Hong Kong work in favor of manufacturers, according to other Taiwanese businessmen whose companies are headquartered in Hong Kong but run manufacturing operations in mainland China.
Wire transfers of renminbi through Hong Kong can usually be completed in one day, according to local businesses. Hong Kong has a mature financial mechanism which facilitates easy wire transfers with foreign companies. It is obvious that much better financial services are available in Hong Kong, local businesses said.
In Need of a Better Pact
Once a Hong Kong-based bank sets up a branch in a city in Guangdong province, it is allowed to set up new branches throughout the province. Although the cross-strait service trade agreement helps Taiwanese businesses advance into mainland China, it does not grant Taiwanese businesses the same right, local businesses said.
While the China Banking Regulator Commission regulates the setting up of new branches, the central and local governments were charged with different responsibilities to oversee banks. It requires great knowledge of China's financial system to help draw up terms that benefit Taiwanese banks during negotiations with China, local businesses said.
Many businessmen said yesterday it is time to amend terms in ECFA. However, the Legislature is yet to pass the cross-strait service trade agreement. Political struggle involving Legislative Yuan Speaker Wang Jin-pyng (王金平) only adds uncertainty to related regulations being cleared in the house.