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MOEA: Financial industry can unhook from CSSTA if China says yes
Taiwan News, Staff Writer
2014-08-20 01:58 PM

Since the Cross-Strait Service Trade Agreement (CSSTA) is stuck in the Legislature, the delay has discouraged Taiwanese financial business expansion in China. In response to industry leaders’ call to unhook financial business items from CSSTA, newly-appointed Minister of Economic Affairs Duh Tyzz-jiun said in a radio interview Tuesday that Taiwanese businessmen would not have to wait until the CSSTA enters into force if China is willing to open its financial market to Taiwan in advance.

In another meeting on the same day, Duh said that the ministry will continue to communicate with legislators over Cross-Strait trade agreements. But Chinese National Association of Industry and Commerce (CNAIC) chairman Lin Por-fong suggested that President Ma Ying-jeou should involve Legislative Speaker Wang Jin-pyng in his trade agreement agenda before talking to legislators.

A higher percentage of shareholding of Taiwanese securities firms and fund management companies in China as well as relaxation of banking rules to allow Taiwanese companies to open branches in China’s rural areas are expected in the CSSTA, but the delay worries bankers in regard to their expansion plan in China. Duh said the Financial Supervisory Commission (FSC) is conducting a feasibility study to see which items can be unhooked from the service trade agreement as long as China gives a green light for these businesses unilaterally.

Duh: Goods trade agreement to trail China Korea FTA

The free trade agreement (FTA) between China and South Korea is expected to be signed at the end of the year and may cause significant impact on Taiwan’s economy and trade. Duh stated that as the service trade agreement is at the stagnation point, the probability of completing cross-strait goods trade agreement negotiations by the end of the year is low and it will most likely be signed after the China Korea FTA goes into effect. However, he emphasized that he will obtain terms superior to those enjoyed by Korea and will persuade the Legislative Yuan into accepting them at the earliest without falling further behind.

During a radio interview Wednesday, Duh also pointed out, warmer China-South Korea trade ties sends a warning to Taiwan and more pressure can be felt in the country. In recent years South Korea has been inking trade deals with the U.S., the E.U., and Southeast Asian countries, with the latter seeing greater imports from Korea. If the China-South Korea trade agreement enters into force, one-fifth of Taiwanese exports will be affected and Taiwan will relinquish 5 percent of our market share in China to rivals in Korea. The loss in value is expected to reach NT$200 billion (US$6.7 billion).

Even though the trade talks on goods between Taiwan and China is scheduled to kick off at the end of August, Duh thought the chance of completing talks by the end of this year is low and worried about irretrievable damages from trade division effects.

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