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 http://www.taiwantrip.com.tw.

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 http://www.taiwan.gov.tw/.

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.

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)