Cross-Strait Economic and Trade Relations: A Virtuous Circle

Cross-Strait Economic and Trade Relations: A Virtuous Circle
China Times editorial (Taipei, Taiwan, ROC)
A Translation
March 12, 2012

Summary: The presidential election was troubled and uncertain. Everything was put on on hold over the Chinese New Year. The pace slowed, even the pace of cross-Strait economic and trade exchanges and liberalization. Only in March did it finally pick up again. We hope the two sides can now relate to each other with increased good faith. We hope this will lead to increased cross-Strait economic prosperity. Greater openness and freer exchanges will lead to greater cross-Strait economic synergy.

Full Text below:

The presidential election was troubled and uncertain. Everything was put on on hold over the Chinese New Year. The pace slowed, even the pace of cross-Strait economic and trade exchanges and liberalization. Only in March did it finally pick up again. We hope the two sides can now relate to each other with increased good faith. We hope this will lead to increased cross-Strait economic prosperity. Greater openness and freer exchanges will lead to greater cross-Strait economic synergy.

The Mainland recently convened two conferences. Beijing's Minister of Commerce Chen Deming said, "This year the scope of ECFA early harvest tariff reductions will be expanded. More products from Taiwan, especially agricultural products, may be sold on the Mainland." He hopes that following ECFA, substantial progress can be made in trade in services and trade in goods. He also stressed the signing of the cross-Strait insurance agreement. "We are very happy to see more Mainland enterprises invest on Taiwan... and cross-Strait economic and trade relations make more progress. This is something we very much hope to see."

The FSC will enable banks from Taiwan to open branches on the Mainland ahead of schedule. It will enable banks from the Mainland to make limited investments in financial institutions on Taiwan. The Ministry of Economic Affairs is making plans for a third wave of Mainland investments. These include flat panels, semiconductors, and other "critical industries." The investment caps on Mainland capital will be raised. Assessments will soon be complete. An agreement will probably be announced this month.

This year the global economic situation remains volatile. In particular, the European economy has gone into recession. The U.S. economic recovery remains tentative and weak. The cross-Strait economic situation faces its own challenges. Mainland economic growth will slow this year. Can the Mainland really guarantee an 8% growth rate? Officials have voluntarily lowered the target to 7.5%. Mainland economic restructuring remains in its infancy. Asset bubbles are still being dealt with. Taiwan depends primarily on technology exports. The economies of Europe and the United States are weaker. This is exerting downward pressure on markets. South Korean companies are offering strong competition in DRAM, LCD, LED smart phones and other technology products. The financial sector on Taiwan has long been trapped within a narrow "Red Sea" market. It is under intense pressure to expand. The two sides must open up instead of guarding against everything under the sun. Opening up would enable closer cross-Strait economic and industry cooperation, and a more complementary division of labor. It would considerably enhance the quality of the cross-Strait economy and industry.

The LCD industry is a clear example. Taiwan's main competitor in the LCD industry is South Korea. Frankly, South Korea's Samsung, LG, and other manufacturers lead Taiwan brands in technology. They have stronger branding. At this stage they clearly have the upper hand. But companies from Taiwan are putting up a good fight with South Korean companies in the Mainland market. The main reason is cross-Strait cooperation. Mainland home appliance companies procured their flat panels from Taiwan. Mainland panel makers have gradually increased their own production capacity. But panel makers on Taiwan continue to hold the lead, both in technology and capacity. The two sides should cooperate, purchase each others' shares, invest in new factories, and adopt a more open attitude in general. Doing so would benefit both sides. Together they could resist South Korea. The 3/11 Earthquake reduced panel production on Japan. The South Korean media predicted that the future of the LCD industry would be a "contest between Greater China and South Korea."

The Ma administration took office in 2008. The cross-Strait economy became far more open than it was under Democratic Progressive Party rule. Nevertheless, the government was still fearful. This was true for most industries, including the financial sector. The government was overly cautious and restrictive regarding Mainland investments on Taiwan, and Taiwan investments on the Mainland. The result was one missed opportunity after another. For example, the Mainland authorities held open plant licenses for Taiwan companies. But the Ministry of Economic Affairs hemmed and hawed. As a result South Korea's Samsung and LG received approval first. The Ministry of Economic Affairs' policy of approving only obsolescent technology investments for the Mainland is totally wrong. It fails to take into account global competition and vendor concerns. It fails to take into account other countries' introduction of technology to the Mainland. Just what technology constitues core technology? Just what technology must be retained? Just what technology can we afford to let go of? Vendors know far better than the government. They have a greater sense of proportion. Improper government restrictions have stifled domestic competitiveness. Too often Taiwan companies have been forced to sit and watch as they lost market share. Examples include the petrochemical industry, automobile industry, semiconductor industry, LCD manufacturing industry, and financial industry. Ironically, the industries the government did not attach much importance to, such as the food industry, the furniture industry, affiliate marketing industry, were lucky enough to escape government restrictions. These bore fruit on the Mainland. Taiwan's small businesses aided the growth of the Mainland's big businesses.

We now look to the coming year. Cross-Strait relations affect cross-Strait insurance agreements and follow-up negotiations on the ECFA early harvest list. We hope these can be completed as soon as possible. They will enable deeper and more systematic cross-Strait economic relations, investments, industrial cooperation, and exchanges. They will enable more open-mindedness outside the system. We hope the two sides will be more open-minded about the technology industry, as well as traditional industries such as the petrochemical industry, naphtha cracking industry, and financial industry. Accelerate the magntitude and pace of liberalization. Allow the two sides to survive the global economic downturn together. Improve the health of the cross-Strait economic and industrial system.

兩岸經貿大步走 互補互強
2012-03-12中國時報

度過紛擾不定的總統大選、萬事暫休的農曆年假後，一度低調的放緩腳步、甚至接近暫停的兩岸經貿交流與開放步伐，在三月終於重新啟動。這次，我們期望兩岸本於善意與兩岸經濟的繁榮，能有更大的開放與交流，發揮更多的兩岸經濟互補互強的利基。

大陸兩會召開期間，大陸商務部長陳德銘表示，今年要擴大ＥＣＦＡ的早期收穫降稅範圍，讓更多的台灣產品─特別是農產品，銷售到大陸；他期望在ＥＣＦＡ後續服務貿易、貨品貿易談判，能取得實質進展；同時，他也強調在兩岸簽署投保協議後，「我們非常樂意看到更多的大陸企業到台灣投資發展」，「兩岸經貿關係相信還會進一步發展，這也是我們非常希望看到的事」。

台灣方面，除了金管會加速核准國銀登陸，同時也確定放寬大陸銀行投資國內金融機構的比例外，經濟部也正進行第三波陸資開放的規劃，包括面板、半導體等被認為具「關鍵性產業」，將放寬陸資投資比例的限制。預計在完成評估後，本月即可望定案對外公布。

面對今年多變的全球經濟情勢，特別是歐洲經濟已進入衰退，美國經濟復甦火苗仍微弱不定的情況，兩岸經濟也各自有本身的挑戰與問題。大陸是今年將放緩經濟成長腳步，是否能「保八」在未定之數─甚至官方主動把經濟目標調降為七．五％；大陸經濟結構的調整仍在起步階段，資產泡沫問題在處理中。而以科技產品為出口大宗的台灣，則除了面臨歐美經濟走弱、市場下滑的壓力外，更有韓國企業由ＤＲＡＭ、ＬＣＤ到ＬＥＤ、智慧型手機等各項科技產品上的強力競爭；國內金融業也因長期困於「小又窄」的國內紅海市場，有迫切又強大「不得不走出去」的壓力。兩岸如果能開誠佈公、不要彼此「防這防那」，讓兩岸的經濟與產業做更密切的合作、分工、互補，則對兩岸經濟與產業體質的提升，都會有相當大的助益。

ＬＣＤ產業就是個明顯例子。台灣的ＬＣＤ產業主要競爭對手就是韓國；坦白說，對於技術領先台廠、本身又有強大品牌做出海口的韓國三星、樂金等廠商，台灣現階段是明顯居下風。但台廠在大陸市場卻有與韓國廠商一拚的架勢，主要就是兩岸合作，大陸家電業者來台採購面板。目前雖然大陸本土的面板廠亦逐漸開出產能，但台灣在技術與規模上仍居領先地位。如果兩岸此時能對產業合作、參股、投資新建廠等採更開放態度，兩岸就能在「合則兩利」下一起受惠，攜手「對抗韓流」。事實上，在日本面板廠在三一一震災減產後，韓國媒體就稱未來ＬＣＤ產業將是「華語圈與韓國的對抗」。

從二○○八馬政府執政後，雖然對兩岸經濟採取遠較民進黨執政時期更開放的態度，但不能否認的是，許多時候仍是「不乾不脆」─包括一般產業及金融業方面，都對陸資來台投資的限制、台商赴大陸投資的項目，做過份保守的限制，結果是廠商的商機一再錯失。例如當大陸把面板廠執照「虛位以待」給台廠時，經濟部卻瞻前顧後，結果是讓韓國三星與樂金先拿到建廠批文。坦白說，經濟部一直以「核准較落後技術赴大陸投資」的觀點完全錯誤，既未考慮到廠商的全球競爭與佈局，更未考慮到其它國家亦會把技術帶到大陸。更何況，哪些技術是核心技術，該保留在手上，哪些是可釋出，廠商會比政府更了解、更有分寸。政府不當的限制扼殺國內企業的競爭力、坐視失去市場的例子太多了，從早年的石化、汽車到半導體、ＬＣＤ、金融業…，反而是政府不重視的食品、家具、通路…，幸運的逃過政府限制，紛紛在大陸開花結果，由台灣的小型企業，壯大為大陸的大型企業。

展望今年，兩岸除了影響總體面的投保協議、ＥＣＦＡ後續清單等談判，希望能儘速完成，讓兩岸經濟、投資、產業的合作交流更深化、更有制度性外，更希望兩岸不論是對科技產業、傳統產業（如石化的輕油裂解等）、金融業等，都能以更寬闊的心胸、加大也加快開放的幅度與腳步，讓兩岸一起度過這波全球經濟低潮，共同提升兩岸的經濟與產業體質。