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ECFA brings new hope for Taiwan's economy

2010-03-20 14:07 BJT


The second round of negotiations on the cross-strait economic cooperation framework agreement is set to be held in Taipei. Many Taiwan merchants say the signing of the agreement is a rational choice for the economic benefits of Taiwan.

The ECFA is a popular topic among people from all walks of life in Taiwan. Many merchants and manufacturers consider it a great opportunity for the Chinese mainland and Taiwan to speed up economic cooperation. Zhang Yiquan, a local government consultant in Taipei, notes the island's economy mainly relies on trade. The ECFA is closely related to the development of Taiwan's economy.

Zhang Yiquan, consultant of Taipei, said, "With the ECFA, tax-free products from Taiwan can be sold to the mainland. The current tariff is 9 percent while the gross profit for many of Taiwan's products is only 5 percent.  "

It's believed that the island's auto industry will stand to benefit most from the agreement. The 13-million sales a year on the mainland are a huge market for Taiwan's car makers. Meanwhile, the exemption of the 8 percent tax is also very attractive for steel makers in Taiwan in their bid to raise their market share on the mainland.

Data shows 45 percent of Taiwan's exports flow to the mainland and it is the only market for Taiwan that creates a trade surplus.

Cao Xingcheng, Honorary Chairman of UMC, said, "If we don't have a surplus to offset trade deficit, Taiwan will suffer foreign exchange outflow and a reduction of trade. This will result in the depreciation of the Taiwan dollar, affecting the island's whole economy. So, the signing of the ECFA is very important for Taiwan. "

Many small and medium sized enterprises in Taiwan have suffered from the global financial crisis. They are now looking to the ECFA as a new hope.

Editor: James | Source: