Month: August 2009

Chinese expert on Taiwan contradicts Ma’s ECFA claims

  • By Ko Shu-ling / STAFF REPORTER

The essence of cross-strait economic integration is to advance the undertaking of peaceful unification with China, a Chinese expert on Taiwan affairs said at a cross-strait forum yesterday.

Li Fei (李非), deputy director of the Taiwan Research Center at Xiamen University, said China’s policy of pushing cross-strait economic exchanges has three benefits.

First, it will strengthen China’s economic power and propel economic development in the region. Second, it will stabilize cross-strait relations and spur the two sides’ policy interactions. Finally, it will push forward peaceful unification through economic integration.

Li made the remarks during the first annual forum on the global development of businesses across the Taiwan Strait and the eighth annual cross-strait scientific and economic forum in Taipei City yesterday morning.

Li caused a stir in February when the Washington Post published an interview in which he suggested that Taipei’s plan to sign an economic cooperation framework agreement (ECFA) with Beijing “represents an important step toward the possibility of unification of the longtime adversaries.”

He told the Post that the agreement would be a significant milestone in gradually warming relations between the two sides.

“It’s a start toward full cross-strait economic integration and a necessary condition for marching forward toward final unification,” Li said.

The Presidential Office later dismissed concerns that signing the economic pact would be one more step toward unification, insisting that the government would make the nation’s interests the priority when dealing with China.

While the administration has tried to play down the political implications of an ECFA, Li yesterday said…


Would an ECFA keep firms here?

  • By Chao Wen-heng 趙文衡

Despite a flourishing of research and debate about the possible effects of signing an economic cooperation framework agreement (ECFA) with China, the potential relocation of Taiwanese businesses has been largely ignored. This is partly because relocations are a form of dynamic investment that is hard to predict with trade models. However, it is also clear that ECFA proponents are steering clear of the subject.

The most negative effects of trade between Taiwan and China have not been any toll on Taiwan’s imports or exports, but rather the relocation of Taiwanese businesses to China. This has undermined Taiwanese industries.

Therefore, as we consider the potential effects of an ECFA, it is senseless to project the impact on trade alone, while ignoring the threat of further relocations.

The government has repeatedly said that an ECFA will help Taiwan avoid marginalization. However, relocation of businesses is a key indication that a country is being marginalized.

Without evaluating the risk of business relocations, it is therefore impossible to analyze how the ECFA would affect Taiwan’s marginalization.

When businesses move abroad, they take their value-added production with them. If that trend intensifies after an ECFA is in place, it will exacerbate unemployment, cause output value to drop and eat into exports. These effects would diminish the business opportunities that the government says an ECFA would create. They are also classic signs of marginalization.

For an economic agreement to prevent Taiwan’s marginalization, it must be able to decrease the amount of Taiwanese businesses moving to China. The ECFA alone will not be enough to do that.

Because of Chinese pressure on other governments, Taiwan has been unable to sign…