Thursday, July 22, 2010

Weekly News Backgrounder from Taiwan's Government Information Office

News Backgrounder

July 21, 2010

I. GIO Minister Updates U.S. Forum and Media on Cross-Strait Economic Pact
ROC Government Information Office Minister Johnny C. Chiang delivered a speech, “Taiwan—Building Partnerships for Asia-Pacific Economic Integration,” at the Carnegie Council for Ethics in International Affairs in New York on July 13. During his talk, he stressed that the signing of the Economic Cooperation Framework Agreement (ECFA) by Taiwan and mainland China represents a major step toward overcoming Taiwan’s economic isolation, achieving mutually beneficial cross-strait cultural, trade and investment cooperation and speeding up the economic integration of Asia.

Minister Chiang stated that signing the ECFA is only the first part of a longer process. Taiwan is a member of the WTO and has the right to sign FTAs with other WTO members, and President Ma Ying-jeou has already made FTA talks with Taiwan’s other trading partners an “administrative priority.” Now that the ECFA has been signed, there is no basis for the Chinese mainland hindering Taiwan from seeking to negotiate FTAs, he added.

During the subsequent question and answer period, Minister Chiang stated that the ECFA is an economic agreement that has nothing to do with politics. He noted that President Ma has vowed not to address such issues as independence or unification during his term in office. The President has said that building the cross-Strait relationship is a very long process with no set timetable. Minister Chiang observed that over one million tourists from the Chinese mainland have visited Taiwan so far, and he is certain that they now know what democracy is. In his view, this is the optimal way to demonstrate what freedom is all about.

The GIO Minister began his weeklong U.S. visit on July 10, during which he visited such mainstream international media as Time magazine, The Wall Street Journal and Newsweek. He was also interviewed by Jayshree Bajoria of the U.S.-based Council on Foreign Relations.

In response to U.S. media concern about Taiwan’s request to purchase arms from the United States, Minister Chiang replied that mainland China habitually opposes the sale of weapons by the U.S. to Taiwan. However, Taiwan seeks to purchase such weapons not because of an arms race with the mainland but rather to safeguard the security of the people of Taiwan. Taiwan’s stance in cross-strait talks must be backed up with the power to defend itself, and a credible deterrence is essential to prevent any miscalculations that might result in military conflict. Taiwan’s security remains under threat; so, based on the government’s sovereign obligation to protect the Taiwan public, it must continue to purchase weapons of a defensive character from the U.S.

As for how the ECFA will affect Taiwan’s economy, Minister Chiang explained that, given the frequency of cross-strait economic and cultural exchanges, the ECFA was signed to initiate the institutionalization and liberalization of extant economic relations between the two sides of the strait. Currently, 41 percent of Taiwan’s exports go to mainland China and Hong Kong. Once the ECFA takes effect, 539 of Taiwan’s tariff items on the “early harvest list” will be subject to tariff reduction or elimination on the mainland, boosting Taiwan’s GDP growth by 0.4 percent.
Although mainland China is currently flush with capital, Taiwan-based businesses on the mainland nevertheless bring more than just investment capital to that market; they also possess such advantages as management skills, adaptability and market savvy. Thus, the ECFA, once it goes into effect, will boost the regional competitiveness of Taiwan’s industries.
II. Tourism Specials Promise a Summer of Fun
Taiwan’s Tourism Bureau is promoting travel without a car this summer by providing shuttle buses in 10 of Taiwan’s cities and counties. Excursionists can save money and limit their carbon emissions as they travel on 21 routes connecting railway and high-speed rail stations with scenic spots through the bureau’s “Tour Taiwan Sightseeing Shuttle Service.”

From now until the end of September, shuttle buses to the following 11 destinations may be ridden free of charge: Dongshan River and Jiaoxi in Yilan County; Lion Mountain in Hsinchu County; Nanzhuang, Penglai, and Xiangtian Lake in Miaoli County; Xitou in Nantou County; Chiayi City; and Taitung City, Eastern Coastal Areas and Offshore Islands, and East Rift Valley-Luye in Taitung County. Stops for these shuttle buses are located at railway stations and high-speed rail stations near scenic spots and are marked by large, red signposts bearing the Tour Taiwan logo.

Shuttle buses are scheduled to depart every hour during weekdays, and every half-hour on weekends and holidays. Tickets to destinations other than the 11 already mentioned may be purchased at stations or the fare may be paid on the bus. For details, please visit

One item never far from the top of a traveler’s list is food. The Government Information Office is holding an online contest on Taiwan’s foods, entitled “Taiwan’s Yummy Snacks.” The four rounds of the contest will be held between July 15 and September 28.

For this event, eight of Taiwan’s specialty foods have been chosen to face off in four rounds. In the first round, pig-blood cake battles stinky tofu; then in round two, it’s oyster omelets against Taiwanese meat balls; in the third round, steamed dumplings will be matched up against braised pork rice; and to close things off, pearl milk tea will go toe-to-toe with mango shaved ice. Participants need only log on to the contest website to vote for their favorite food. Contestants may only cast a single vote each round, and all those who voted for the winner will be entered into a prize drawing. To access the contest website, please visit the Republic of China Government Entry Point at

III. Taiwan to Launch Investment Recruitment Campaign
Following up on the signing of the cross-strait economic cooperation framework agreement, the Council of Economic Planning and Development (CEPD) briefed the Cabinet on July 15 about a global investment solicitation plan aimed at raising Taiwan’s regional competitiveness. CEPD Minister Christina Liu said that a joint-service center for global investment recruitment established by the Ministry of Economic Affairs (MOEA) is scheduled to begin operation on August 8. The various ministries and central-government organizations were asked to submit investment proposals by July 20, from which the CEPD and other ministries would jointly select seven flagship plans. Among those expected to be incorporated into the initiative are internationalization of medical service, globalization of Taiwanese cuisine and digital convergence. The CEPD aims to attract US$55.9 billion in investment over the next six years.

In addition, the CEPD has scheduled investment recruitment seminars for Taipei, Taichung and Kaohsiung on August 23, 27 and 30, respectively. It will put forth a comprehensive action plan before the end of September and, in order to attract more investors, will organize a Taiwan Road Show to Japan, Singapore, Hong Kong, Europe and the United States from October to December.

As cross-strait relations have stabilized, Taiwan is fast becoming a lucrative investment destination. The MOEA announced on June 15 that direct investments by overseas Taiwanese and foreigners totaled US$2.2 billion in the first six months of 2010, an increase of 22.53 percent over the same period last year. Moreover, foreign investors are lining up to establish R&D centers on the island. According to the MOEA, after Microsoft’s decision to invest US$21 million in a “Software and Services Excellence Center” in Taiwan, Hewlett-Packard also applied for MOEA funding to build within three years a large development center that will employ 1,000 people. The MOEA has also granted approval to Sony, DuPont, Corning, Fujitsu, ASML and other multinational corporations to set up R&D centers in Taiwan.

Thursday, July 15, 2010

Weekly News Backgrounder from Taiwan's Government Information Office

News Backgrounder
July 14, 2010

I. Global Investors Wooed after ECFA Signing

The Executive Yuan established a task force on July 7 to attract global investments to Taiwan following the signing of the economic cooperation framework agreement (ECFA) between Taipei and Beijing. The task force will actively seek investors from Japan, Singapore, Hong Kong, Europe and North America for participation in industries on the ECFA’s early harvest list.

Foreign investments will also be directed toward the i-Taiwan 12 infrastructure projects (islandwide transportation networks, Kaohsiung free trade zone and eco-port, Taichung Asia-Pacific sea and air logistics hub, Taoyuan Aerotropolis, intelligent Taiwan, industrial innovation corridors, urban and industrial park renewal, farm village regeneration, coastal regeneration, green forestation, flood prevention and water management, and sewer construction), the six emerging industries (biotechnology, green energy, healthcare, high-end agriculture, tourism, and culture and creativity), the four intelligent industries (cloud computing, smart vehicles, green architecture and patent commercialization) and 10 key service industries (improving medical services, globalizing Taiwanese cuisine, etc).

With Premier Wu Den-yih as convener, the task force is expected to put forth the first series of investment promotion plans by the end of this month. In August, the Ministry of Economic Affairs (MOEA) will establish a joint-service center as a one-stop window to match global investors to business opportunities and to help resolve related problems. This year’s goal is to raise US$6 billion in investments.

Minister without Portfolio Yiin Chii-ming will lead a delegation to Japan at the end of July to conduct investment seminars explaining changes in Taiwan’s investment environment and how ECFA can provide more opportunities.

The cross-strait economic agreement is viewed by many as a boon for business. The International Monetary Fund, seeing favorable consumption and investment growth on the island, has raised its forecast for Taiwan’s GDP growth to 7.7 percent for 2010. Economic Minister Shih Yen-hsiang has also said that this year’s objective is to “work for 6 [percent growth], expect 7 and hope for 8.” According to analysis by Minister Christina Y. Liu of the Council for Economic Planning and Development, Taiwan will become a hotbed for investment after ECFA. Domestic and foreign investors as well as Taiwanese businesses operating in mainland China are taking great interest, indicating growing optimism about Taiwan’s economic conditions. Cheng Cheng-mount, chief economist at Citibank Taiwan, predicts that the benefits of ECFA on Taiwan’s economic growth will become visible in the latter half of 2010.

II. Poll: 61 Percent of Taiwan’s People Support ECFA

At the fifth round of talks between Taiwan’s Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung and mainland China’s Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin in late June, the SEF and the ARATS signed the Economic Cooperation Framework Agreement (ECFA) and an agreement addressing protection of intellectual property rights (IPR). Results of a poll released July 6 by the Mainland Affairs Council showed that 61 percent of respondents were satisfied with the results of ECFA negotiations, with 63.6 percent affirming the result that 18 of Taiwan’s agricultural and fishery products can now be exported to the mainland free of tariff duties.

As to the trade agreement’s effects, 62.6 percent believed the pact would help Taiwan negotiate free trade agreements with other nations, while 59.2 percent thought that it would be good for the nation’s long-term economic development. Concerning the IPR agreement, 73.1 percent conveyed their approval. Meanwhile, the results of a separate survey published July 11 by the Research, Development and Evaluation Commission had 68.3 of those polled approving of the government’s efforts to improve cross-strait relations.

Minister of Economic Affairs Shih Yen-shiang pointed out that the signing of the ECFA means that mainland China will lower tariffs on 539 products included in Taiwan’s early harvest list. This is expected to help Taiwan’s economy grow by 0.4 percent, or US$1.70 billion, and increase overall production value by 0.86 percent, or US$5.89 billion. Moreover, in the early stages of the ECFA’s implementation, 60,000 jobs will be created.

Half of the 539 products—including auto parts, household appliances, accessories, undergarments, shoes, socks, luggage and similar containers, bananas and tea—are made by less competitive traditional industries, small and medium-sized enterprises (SMEs) and the agriculture sector. As these items were previously subject to tariff duty rates of 10 percent and higher, their inclusion in the early harvest list suggests the country’s manufacturers will be able to expand through increased sales in the mainland, Shih noted.
Meanwhile, the minister said, the Ministry of Economic Affairs has earmarked US$2.95 billion over 10 years in a program to upgrade SMEs and traditional industries impacted by the ECFA by providing counseling, structural adjustment aid and relief to adversely affected parties.

Thursday, July 8, 2010

Weekly News Backgrounder from Taiwan's Government Information Office

News Backgrounder

July 7, 2010

I. ECFA Will Accelerate Asia’s Economic Integration: President Ma

After Taiwan’s Straits Exchange Foundation and its mainland Chinese counterpart, the Association for Relations Across the Taiwan Strait, signed the Economic Cooperation Framework Agreement (ECFA) on June 29, the Cabinet approved the agreement and forwarded it to the Legislature for review on July 1.

At a press conference held the same day, entitled “New Inflection Point for Taiwan, New Era for Asia – Choosing Correctly at a Critical Juncture,” President Ma emphasized that the agreement will spur breakthroughs in three areas: allowing Taiwan to overcome its economic isolation; encouraging economic relations between Taiwan and mainland China toward reciprocity and cooperation; and accelerating Asia’s economic integration.

The ECFA, said the president, holds far-reaching implications for Taiwan’s future, which the international community will be examining with keen interest. It will further solidify cross-strait peace while bringing about structural changes in the Asia-Pacific regional economy, he opined.

The agreement could also prevent the nation from being economically marginalized, the president said. It provides a systematic framework for mutually beneficial cooperation across the Taiwan Strait that will create more business and job opportunities.

The agreement, he added, will speed up economic integration in Asia, making Taiwan a more valuable asset in the eyes of the Asia-Pacific and the world. It has the potential to transform Taiwan into a springboard for enterprises around the world to enter mainland Chinese markets.

Following up on the signing of the ECFA, the Council for Economic Planning and Development (CEPD) will organize business fairs to solicit foreign investment in 12 focal industries in Taiwan. From October to December, the CEPD will make presentations in Japan, Singapore, the United States and Europe.
II. World Strongly Supports Cross-Strait Pact

The international community has voiced its support for the Economic Cooperation Framework Agreement (ECFA), signed on June 29 between Taiwan and mainland China, for its promise to bolster stability in Asia and increase trade. Foreign nations and bodies shared their hopes for cross-Strait interactions to continue expanding.

On June 29, a U.S. Department of State official said, “The United States welcomes the increased dialogue and interaction,” and hopes that relations between the two sides “will continue to expand and develop.” The cross-strait economic pact, the speaker continued, would help to increase trade and lead to a more stable Asia.

Catherine Ashton, the EU High Representative for Foreign Affairs and Security Policy, issued a statement on June 30 affirming that the signing of the ECFA “contributes significantly to stability and security in East Asia.” The statement went on to read, “The European Union believes that the expansion of cross-Strait economic relations has a potential also to benefit the development of its already significant trade and investment links in East Asia.”

The Ministry of Foreign Affairs of Japan, meanwhile, said on June 30 that the Japanese government welcomed the ECFA, and that it looks for Taiwan and the mainland to solve their problems peacefully through direct dialogue.

“The conclusion of the ECFA will further enhance economic cooperation between both sides and pave the way for the normalization of the cross-Strait economic relationship,” said Singapore’s Ministry of Foreign Affairs on June 30. “It will,” the ministry continued, “also be helpful in promoting regional economic integration.”

In a July 5 interview with Taiwan’s Central News Agency, Director-General Pascal Lamy of the World Trade Organization (WTO) affirmed that the ECFA with mainland China was a major achievement by Taiwan in meeting its overall trade objectives. This agreement would help improve cross-Strait relations and ensure Taiwan’s industrial competitiveness, while also furthering its economic integration with the world and attracting foreign investment.

The WTO Secretariat’s Trade Policy Review on Taiwan pointed out that a cross-Strait economic agreement would help improve relations across the Taiwan Strait and could prove beneficial to Taiwan in signing free trade agreements (FTAs) with its other major trading partners. Taiwan will then be better equipped to meet the competition created by FTAs signed between other Asian nations.

III. Taiwan’s Digital Economy Ranking Rises

Taiwan has again come into the international spotlight for its information and communications technology (ICT) development. It was listed at No. 12, four spots higher than the previous year, in the 2010 digital economy rankings released by the Economist Intelligence Unit (EIU) on June 29. The rankings are viewed as an indicator of economic competitiveness.
The EIU pointed out that Taiwan’s rise in ranking is attributable to its advantage in broadband technology, which, together with its sound legal and enhanced social environments, makes it an exemplary model for applying digital technology to creating economic and social benefits. This development has become increasingly common in Asia, where such leading “digital economies” as Taiwan and South Korea are outperforming Europe and North America in broadband quality.

EIU derives the annual rankings from surveys on the development of ICT in major economies, evaluating their network infrastructure and Internet use for social and economic purposes. It is hoped that both individuals and enterprises can, in a sound regulatory framework and through investment in communications infrastructure, contribute to increasing efficiency and prosperity. The “digital economy” benchmark is a reflection of how the use of ICT ultimately contributes to the world’s overall economic and social progress.

Thursday, July 1, 2010

Weekly News Background from Taiwan's Government Information Office

News Backgrounder
June 30, 2010
I. Taiwan Set to Sign ECFA with Mainland China

A preparatory meeting for the fifth round of talks between Taiwan’s Straits Exchange Foundation (SEF) and mainland China’s Association for Relations Across the Taiwan Strait (ARATS) was held on June 24 in Taipei. Led by SEF Vice Chairman Kao Koong-lian and his ARATS counterpart Zheng Lizhong, the two sides finalized the ‘early harvest’ list under the proposed economic cooperation framework agreement (ECFA), and agreed on the texts of the ECFA and of another pact on intellectual property rights protection. The two sides signed these agreements at the fifth round of SEF-ARATS talks on June 29 in the mainland city of Chongqing.

According to the SEF, a total of 539 goods and services proposed by Taiwan have been included in the early harvest list for immediate tariff or market concessions. These consist of petrochemical products (including petrochemical and plastic materials), textiles, transportation tools (automobile components), machinery (machine tools) and other products. Taiwan negotiators also strived for the inclusion of 18 agricultural and fishery products for zero-tariff treatment when exported to the mainland, benefiting many farmers in central and southern Taiwan. Meanwhile, Taiwan has agreed to include 267 items proposed by the mainland.
According to the Executive Yuan, the signing of the ECFA is a critical step toward upgrading national competitiveness that can open more business opportunities for local industries. It will not only enhance Taiwan’s international competitiveness and lure foreign investors, but will also put Taiwan in step with globalization and regional economic trends.

Studies by the Chung-hua Institution for Economic Research indicate that the signing of the ECFA will help Taiwan’s economy grow by 1.65 to 1.72 percentage points and create 257,000 to 263,000 job opportunities. Other benefits for Taiwan include earlier entry into the mainland market over competitors, attracting foreign investment, transformation of Taiwan’s economic structure and turning the island into a gateway and preferred business partner for the Chinese market.

The agreement will now pass to the Executive Yuan for approval and to the Legislative Yuan for review before it can be implemented. The Legislature will convene a special session in July to review the pact.

Many renowned economists hold the view that the ECFA will bring tremendous benefits for Taiwan’s economic development. Economics Nobel laureate Oliver Williamson pointed out that the ECFA would benefit both Taiwan and mainland China by promoting mutual prosperity and development. Nevertheless, he also emphasized the importance of self-protective measures. Business strategist Kenichi Ohmae described the cross-strait economic pact as “a carefully crafted vitamin for Taiwan.” Combined with a 17-percent business income tax rate and 370 direct cross-strait flights every week, Ohmae said that Taiwan could well become a business operations hub for Greater China.

II. Progress Made in Post-Morakot Reconstruction Efforts

On August 8, 2009, Typhoon Morakot brought torrential rain to southern Taiwan, causing deaths, inflicting severe losses on the tourism industry and damaging basic infrastructure in the mountainous regions of Kaohsiung County and other areas. At the time, President Ma Ying-jeou pledged that reconstruction efforts would be expeditious.

An all-weather remote emergency video communication system began operation in Namaxia Township on June 26. It is the first installation of its kind in Taiwan and will allow for more effective response to severe weather. The president stressed that the system can function under extreme conditions. Such a system, he said, is important for people living in remote areas, as they are more susceptible to the effects of climate change.

Meanwhile, on June 25, the premier announced that Provincial Highway No. 18 to Alishan reopened. This decision was in response to the needs of local residents and hopeful tourists. Along with the reopening of the Alishan Railway, this will help increase tourism to the area. Premier Wu pointed out that Alishan is a favorite destination for both domestic tourists and those from Japan and mainland China. Meanwhile, to attract more foreign tourists to Alishan, the Tourism Bureau will implement new marketing campaigns.

The reconstruction commission stated that the largest amount of rainfall dumped on Taiwan by Typhoon Morakot — nearly 3,000 millimeters — fell on the Alishan area. This was nearly a world record. The torrential rains inflicted terrible damage on the region’s environment and transportation system. As such, restoring regular operation of the Alishan Railway and tour buses is key to stimulating economic development there.

Source: Government Information Office, Republic of China (Taiwan)

Thursday, June 24, 2010

Weekly News Background from Taiwan's Government Information Office

News Background

I. Taiwan Inventions and Designs Shine on World Stage
Taiwan was the biggest winner among 15 participating countries at the 2010 Invention and New Product Exposition (INPEX) held in the United States. According to the award list, released June 19, Taiwan’s delegation garnered 24 gold, 25 silver and five bronze awards, as well as seven special awards.

Apart from the INPEX event in Pittsburgh, Taiwan also stood out at two other top invention shows—the iENA trade fair in Nuremburg, Germany and the International Exhibition of Inventions of Geneva, Switzerland. Taiwan obtained 26 gold awards at the iENA trade fair in late 2009, and 28 more golds at the Geneva event this April.

The Taiwan delegation to INPEX this year included 42 members with 56 invention entries. The youngest member of the delegation was You Jun-bo, aged 13. To better study the growth process of the silkworm, You invented the “multi-angle ecological observation video camera” with a rotatable lens that can provide 75 to 150 times magnification power. For its convenience and practicality, the invention earned a gold medal.

Another invention that received a gold medal was an apparatus for storing the heat generated by air conditioners, developed by Professor Weng Kuo-liang of National Chin-Yi University of Technology. The apparatus recovers energy through heat exchanges during the repeated vaporization of water and, when affixed onto a water supply line in the air conditioning system, heats up water that can be dispensed through an outflow pipe for home use.

In addition to scientific research and development, Taiwan’s creative craftworks have come into the international limelight as well. The National Taiwan Craft Research and Development Institute presented the Yii design brand at the prestigious Milan International Furniture Fair this year and received widespread acclaim from master designers and major media from around the world. At a news conference held on June 17, Minister Emile Sheng of the Council for Cultural Affairs said that Yii’s display at the Milan Triennale Museum was an honor for the nation’s handicraft industry. For example, in Yii’s Cocoon Plan collection, inspired by silkworms, Rock Wang and Chen Kao-ming developed a series of cocoon-shaped sofas and stools made from bamboo and silk. Three years after the launch of the Yii brand, its products have received global recognition and are exhibited alongside items from Japan and other countries.

II. Solid Progress Seen in Taiwan’s Promotion of Emerging Industries

Taiwan’s industrial sector currently suffers from over-concentration, insufficiently diversified development and susceptibility to international economic downturns. To map a developmental direction for future industries, the Executive Yuan compared Taiwan’s advantages in human capital and information technology with global trends to draw up the “Six Key Emerging Industries Plan.” Two of the “emerging industries” targeted by this plan are biotechnology and green energy.

In biotechnology, the Executive Yuan launched the “Diamond Action Plan for a Biotech Takeoff” on March 26, 2009. The plan has four principal elements: boosting the capacity to commercialize R&D, setting up a biotech venture capital fund, promoting an integrated cultivation mechanism and establishing a food and drug administration. The biotech venture capital fund’s primary objective is to inject funds into the biotech industry, with at least US$155.8 million planned for investment during the initial period.

Meanwhile, the developmental direction set forth by the Executive Yuan for green energy focuses on renewable energy, electric cars, solar photonics and solar batteries, and light emitting diode (LED) lighting. Public investment of at least US$623.2 million in R&D on related technologies is planned for the next five years, a move that is expected to attract in excess of US$6.23 billion in private investment. It is estimated that the green energy industry’s production value will rise from around US$5 billion in 2008 to US$36 billion in 2015, a process that will create 110,000 jobs.

Vice President Vincent C. Siew said, at photonics industry event, that photonics is set to follow semiconductors and motherboards as a US$30 billion industry this year. Photonics technologies are central to the development of “green” industries, and also essential to promoting the Six Key Emerging Industries. Moreover, the industry meshes with the global trends of saving energy and cutting carbon emissions.

Source: Government Information Office, Republic of China (Taiwan)