Non-tariff barriers compromise Taiwan's edge in China: scholars

Taipei, Nov. 29 (CNA) Taiwan should broach the issues of China's non-tariff barriers and unspoken business rules which undermine Taiwan businessmen's competitiveness in China, during trade talks with the regional giant, local scholars said Thursday. They made the comments at a forum organized by the Taipei-based Chinese National Federation of Industries on China's economic situation and Taiwan's investment strategy in China. Chang Wu-ueh, director of the Graduate Institute of Chinese Studies at Tamkang University in New Taipei, said there are more than 87,000 Taiwanese firms operating in China, and most of them are struggling with the rising prices of raw materials, surging cost of labor, the shortage and rapid turnover of workers, and difficulties in getting loans. Noting that the majority of Taiwan businesses in China are producing goods for foreign markets, Chang said they are facing greater problems than their Chinese counterparts as China is changing its economy from an export-driven one to one driven by domestic consumption, Chang said. "While talking with their Chinese counterparts on service trade, Taiwan's negotiators should address barriers other than tariff, and see to it that China carries out its agreements with Taiwan thoroughly," said Chang. As far as good trade is concerned, Chang said Taiwan should think whether it is worthwhile protecting its agricultural sector at the cost of chances to sell more expensive industrial products to China. In order to avoid the two sides investing in the same industrial fields and competing against each other, Chang said both sides should buy stakes in each other's companies, and Taiwan should consider allowing Chinese investors to stay on the island to the benefit of both sides. Lin Jan-yan, a professor at the Chung Yuang Christian University in Chungli, Taoyuan County, said Taiwan businessmen's operations would be much easier if China would check the prevailing corruption among its officials. He said most Chinese firms do business through their connections with officials, and Taiwanese businessmen cannot therefore compete with them on an equal footing, not to mention getting bank loans or government grants to expand their operation. What is worse, Lin said, China's local governments are often skewed in favor of Chinese firms while judging their trade disputes with Taiwanese firms. Follow-up talks on the China-Taiwan Economic Cooperation Framework Agreement (ECFA), covering trade in goods and services and a dispute settlement mechanism, are currently in progress, with the two sides agreeing to prioritize talks on services. China and Taiwan signed the ECFA in 2010. (By Scarlett Chai and Maubo Chang)