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 | Thursday, April 27, 2000, updated at 16:13(GMT+8) | ||||||||||||
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Cross Taiwan Straits Trade Hits New HighTrade and investment volumes between the Chinese mainland and Taiwan will hit new highs this year following strong growth in 1999. Statistics from the General Administration of Customs indicate that the cross-Straits trade aggregate increased 14.5 per cent from a year earlier to hit US$23.5 billion in 1999.Growth was primarily driven by a surge in mainland imports from Taiwan, which jumped by 17.43 per cent to US$19.53 billion. In contrast, the mainland's exports to Taiwan rose by only 2.1 per cent to US$3.95 billion. In an interview with Business Weekly, Liu Xueqin, a senior researcher with the Chinese Academy of Foreign Trade and Economic Co-operation, said Taiwan's exports to the mainland will grow more dramatically this year. "Mainland exports to other markets have robust prospects this year; this will prompt Taiwan-invested businesses on the mainland to increase their imports of raw materials and components from Taiwan to produce more goods for the international market,'' Liu explained. Trade figures for the first two months have already shown a gathering momentum of business exchanges across the Straits. According to the General Administration of Customs, the mainland's imports from Taiwan soared by 33 per cent to US$3.07 billion during the first two months of this year. "Mainland exports to Taiwan will rise after the two sides' accessions to the World Trade Organization (WTO),'' said Liu. Under WTO rules, Taiwan will have to ease its strict restrictions on imports from the mainland. Meanwhile, various cross-Straits investment constraints imposed by Taiwan authorities are expected to be lifted after the two sides' entry into the WTO. Even with the existence of current heavy restraints, upbeat trends have been observed in Taiwan businesses' investments on the mainland. According to the Ministry of Foreign Trade and Economic Co-operation, contractual investment volume from Taiwan, an important indicator for the future trend of investment, grew by 10.2 per cent to US$3.42 billion in 1999. During the first two months of this year, volume surged by a dramatic 62.44 per cent over a year earlier to US$526 million. "Expecting China to soon join the WTO, Taiwan businesses have accelerated moving their production bases to the mainland to benefit from lower tariff rates and to take advantage of increased foreign market access the mainland is expected to get upon accession to the WTO,'' said Liu. With these improvements in trade conditions, the mainland's advantage of cheap labour force will become more attractive to investors as it will generate more returns for them than before. Accompanying the increased inflow of Taiwan manufacturing investors have been a growing number of service traders including those involved in banking, securities and insurance. "With the increase of Taiwan manufacturing companies on the mainland, the demand for service traders has also been growing,'' said Liu.
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