Trade Pact for China
A mere seven weeks ago, China and Taiwan signed an Economic Cooperation Framework Agreement with each other, and riding on the back of this agreement, a trade pact has recently been signed. Even though Taiwan will still not accept Chinese labor, China still remains one of its largest trading affiliates, which at present sees China importing $80bn worth of products from Taiwan and Taiwan importing $30bn in goods from China. The new trade agreement between Taiwan and China will provide these countries with a massive decrease in tariffs, with some tariffs being removed completely. It is estimated that approximately $14bn worth of products that are exported from Taiwan will enjoy the advantages of the new trade pact. China will so have lowered tariffs on about $3bn of their products. Another positive feature for Taiwan, in regard to the trade agreement, is that the country will now have access to the insurance, service and banking sectors in China.
Cheng Ching-ling, a pro-China Kuomintang party legislator, is extremely positive about the changes that will blossom from the trade agreement, saying: “The ECFA is extremely important to Taiwan if it hopes to avoid being marginalised economically amid an increasing number of trade blocs.” Members of the opposing party, the Democratic Progressive Party, however, view the changes as detrimental to Taiwan, as Tsai Huang-lang commented: “Once the agreement becomes effective, which is inevitable now, Taiwan will lose its sovereignty and become like Hong Kong and Macau.” Even though opinions differ in regard to the agreement, the impact on the economy of China and Taiwan can only be determined once the trade pact comes into action.