Trade pact with China a 'vitamin' for Taiwan

Trade pact with China will be a 'vitamin' for Taiwan: Japanese expert

A Japanese business strategist said here Tuesday that Taiwan's planned trade pact with China would be a "vitamin" for Taiwan's economy.

Kenichi Ohmae told senior Taiwan government officials that the next year will be vital to the economic cooperation framework agreement (ECFA) if it is going to be developed into a full-fledged free trade pact.

Neighboring states are keeping a close eye on negotiations between Taiwan and China regarding the pact, he said in a speech at the Presidential Office.

When President Ma Ying-jeou first said he hoped the pact could be finished within his first term, most analysts thought it was impossible, Ohmae said, adding that now it seems very likely.

Most analysts expected the negotiations to frequently run into difficulties and predicted Taiwan wouldn't be able to achieve very desirable results, but China had shown significant patience toward Taiwan and "the talks are going marvelously, and 'the pact' will enable Taiwan to play a pivotal role in the greater China area, " Ohmae said.

Noting that there are 370 round-trip flights between Taiwan and China weekly, and that Taiwan levies a 17 percent business income tax on local companies, Ohmae said that "this coupled with the trade pact with China will give Taiwan an advantage" and make the island a regional business hub, if not an aeronautic hub.

Taiwan should go ahead with its negotiations with China, not only sealing the ECFA but also developing it into a full free trade agreement, which will put the country on a level playing ground, Ohmae said.

In addition to exploring the Chinese market, the country should also explore other emerging economies, he said.

He said the improved ties between Taiwan and China have caused concern in South Korea, which is competing with Taiwan for the Chinese market. Taiwan's booming exports to China helped the island recover more quickly than other states from the impact of the collapse of Lehman Brothers in 2008, Ohmae said.

"I can't understand why some people in the country would complain about it," he said. "Why would some journalists complain?" The Presidential Office said that during a private meeting with Ohmae before his speech, President Ma asked the business guru whether he thought Taiwan's economy was overly reliant on China.

"No, compared with other states in Asia, Taiwan is not overly reliant on China, " the office quoted him as saying. All of Asia is increasingly dependent on China economically, and Taiwan is playing the role of pathfinder by putting its cultural affinity with China to good use, he said.

ENDS

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