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)

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