Taiwan and China Step Up Follow-Up Talks for ECFA

Taipei, Feb. 13, 2012 (CENS)--In the wake of the victory of President Ma Ying-jeou for the second term, Taiwan and China are accelerating follow-up talks for cross-Taiwan Strait Economic Cooperation Agreement (ECFA). Chen Xing, director of mainland China's department of Taiwan, Hong Kong, and Macao, under the Ministry of Commerce, for instance, will lead a delegation to visit Taiwan for talk on opening cross-Taiwan Strait merchandise markets.

Meanwhile, Taiwan will further open up mainland Chinese investments in Taiwan. The third-wave opening for mainland Chinese investments in Taiwan will hit road on March 9, boosting the extent of permitted manufacturing items for mainland Chinese investments to 90%, up from 42% now. Under the further liberalization, mainland Chinese investors will be able to buy into Taiwanese LED (light emitting diode) firms.

In the upcoming cross-Strait trade talk, Taiwan will strive to put on the agenda issues related to FPD (flat panel display), auto, petrochemical, and machine tool. The mainland is expected to ask opening up the Taiwanese market for agricultural products which Taiwan doesn't produce.

Taiwan is facing major time pressure for the trade talk, as mainland China and South Korea will soon begin the talk on free trade agreement.

In the second-wave opening of mainland Chinese investments in Taiwan, mainland investors can buy into domestic firms or set up joint ventures in the fields of semiconductor manufacturing, IC assembly, FPD and components, metal-cutting machine tools, and electronic and semi-conductor manufacturing equipment. Mainland investors, however, cannot hold more than 10% stake in existing firms or 50% in joint ventures. Mainland China has urged Taiwan to raise the former ceiling.

Amid the third-wave opening for mainland investments, the most noteworthy is for mainlanders to buy into domestic LED firms, a move which will lead to the formation of cross-Strait LED supply chain.