The finance minister and governor of Taiwan’s Central Bank have urged the government to speed up trade talks with China.
They said Taiwan’s economy will suffer heavily if the country fails to reach agreements on trade in goods and services with China. Chinese buyers currently purchase 40% of Taiwan’s exports. But they also said that without agreements on cross-strait tariff reductions, this number could fall once a free trade agreement between China and trade rival South Korea goes into effect.
South Korean firms compete directly against Taiwanese counterparts in a variety of fields. This includes iron, machine tools, automobiles, panels, petrochemicals, textiles, and glass. Once the FTA takes effect, China will lift tariffs on South Korean industrial products, while 31% of competing Taiwanese products will remain subject to tariffs.
Finance minister Chang Sheng-Ford said this is bad news for Taiwan, which derives 70% of its GDP from exports. Speaking Wednesday, he said that the China-Korea free trade agreement must serve as a warning to Taiwan.
Meanwhile, in a separate statement on Wednesday, governor of Taiwan’s central bank Perng Fai-nan said that China-Korea free trade agreement presents Taiwan with a crisis. He said that Taiwan must work harder to integrate into the regional economy, or else it risks seeing its economic momentum slow down.