Gov't urged to sign ECFA and FTA simultaneously

Yuan Ming-jen, general manager of the Hua Hsin International Business Administration Consulting Co. and one of the 40-odd consultants invited by the Cabinet-level Mainland Affairs Council (MAC) to offer consultancy services to Taiwanese investors in the mainland, made the remarks in reply to questions from local news media.

Yuan said that after both sides of the Taiwan Straits sign the ECFA, it will be conducive to exports of quite a few Taiwan-made consumer-end products to China, and therefore the government should clearly publicize which industries and what products will benefit and offer concrete data to support the explanation.

Taiwan's exports to mainland China are mostly composed of semi-finished products and raw materials, thus fueling doubts about the necessity for the government to push for signing ECFA with China.

In addition, after the ECFA is inked, Taiwan's traditional industries such as footwear, garment, and ceramic tiles will suffer immediately as they can hardly compete with imports of Chinese counterparts to the island.

Yuan called for the government here not to sign ECFA until one year after China signs free trade agreement with the ASEAN in 2010, so that it can assess the impact of the ASEAN-China free trade agreement on Taiwan's economy.

In related news, after experiencing an eventful year in 2009, Taiwan's banking industry is expected to gain significant momentum for profit growth this year, due to the increasingly peaceful ties across the strait expected after the ECFA is signed.

Industry insiders said Taiwan's banks, securities firms and insurers are poised to brace a better environment for business operations after the memorandum of understanding (MOU) on cross-strait cooperation in financial supervision was sealed in November 2009.

The business outlook will become even brighter for Taiwan's overall financial sector if the ECFA is signed, because “market entry” for Taiwan's financial enterprises is among the “early harvest” list for Taiwan in the ECFA pact, the insiders said.

Taiwan's banks are in a good position to tap the corporate financing and consumer banking markets in China, the sizes of which are tenfold to those in Taiwan.

At the moment, less than 30 percent of Taiwanese investors in mainland China rely on Chinese banks for financial support, because it's difficult for such banks to investigate the credit conditions of small to medium-sized Taiwanese investors in the mainland. This, however, becomes a very good market niche for Taiwanese banks seeking to develop a presence in the mainland.

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