Taiwan news on ECFA Options

[dlai]

http://www.youtube.com/watch?v=hvmG5Dk4Rso&feature=grec

[Red Fox Ace]

ECFA poses threat to electronics industry



http://www.taipeitimes.com/News/editorials...3/19/2003468367



By Chien Yao-tang 簡耀堂

Friday, Mar 19, 2010, Page 8

China is strongly motivated to develop its own thin-film transistor (TFT) LCD and wafer foundry industries, and hopes it can gain production technology and managerial know-how from Taiwan. In order to please China, President Ma Ying-jeou’s (馬英九) government has decided to sign an economic cooperation framework agreement (ECFA) with Beijing as soon as possible.

Last month, restrictions on Taiwanese companies establishing TFT-LCD plants in China using 6.5 generation technology and above were relaxed. Firms were also allowed to invest in 12-inch wafer fabs and establish operations for mid to high-level integrated circuit testing and packaging.

This will spur the relocation of the two main pillars of Taiwan’s electronics industry to China. Once an ECFA is signed, Taiwan’s electronics industry will fade away and as many as 750,000 workers will face unemployment.

The only restriction the Ma administration placed on this opening up of Taiwan’s electronics sector was that the production technology for wafer fabs in China lags two generations behind Taiwan’s. While it may sound like this seeks to minimize the loss of Taiwan’s cutting-edge technology to China, it is in fact a sure way to hand over technological know-how to China.

To use the example of Taiwan Semiconductor Manufacturing Co (TSMC) and its investment in China’s Semiconductor Manufacturing International Corporation (SMIC), SMIC has announced that it has already started using 45 nanometer process technology like TSMC does, so does this mean that TSMC will not be allowed to invest in SMIC in future?

In addition, there is a two-generation gap between Taiwan’s United Microelectronics Corp (UMC) and China’s Hejian Technology, which UMC wishes to acquire.

If this happens and Hejian increases its production technology to the same level as UMC’s, does that mean UMC will have to pull out of Hejian? Of course it won’t. So in reality, the two-generation gap in technology is just to dupe the public.

Many have stated that once an ECFA takes effect, trade tariffs between Taiwan and China will drop sharply. However, cutting tariffs will not be beneficial to Taiwan’s exports of electronic components to China because most electronics products now exported from Taiwan to China, like semiconductors, are already almost tariff-free. The average rate is 0.58 percent.

That means Taiwanese businesses will not lose much at all if an ECFA isn’t signed, while the passage of an ECFA would not really help them expand their business in China.

Even more worrying is that once an ECFA is signed, Taiwanese businesses will be able to invest even more in China’s high-tech industry than they do now. Because of industrial clustering, middle and upstream LCD and IC manufacturers will make big moves into China. For example, when Taiwan’s PC and notebook businesses were allowed to start production in China in the 1990s, manufacturers quickly moved to China. This caused the loss of hundreds of thousands of jobs in Taiwan.

The IC design industry has the highest value-added industry in Taiwan, so inevitably design development and staff will flow to China, causing the gradual death of the domestic electronics industry.

The knowledge and experience accumulated by Taiwan’s electronics sector will cease to exist here. What industries will we be left with to provide employment in Taiwan and what sort of production technology will allow us to engage in high value-added industries?

[sinowarrior]

It's Not ECFA, it's Taiwan's competitors forcing taiwan's hand.

Essentially the Koreans and Intel force Taiwan to open up. Electronics is not something Taiwan can monopolized over China. It would be a pipedream...

Koreans started a bunch of new LCD plants in CHina which scared the $hit of taiwan and forced it to follow the same path or else lose the market to the koreans.

Intel ,samething, open its 12 inch fab in CHina.


I am glad the koreans and Intel be the equalizer on this.. We don't want to see Taiwan monopolized the tehnology over CHina. Tai-wan has no choice, either to earn some money now from China or else those money would go to taiwan's competitors. AT the end, taiwan might lose the money and technology all together if it doesn't act, at least it can earn some money now,


Same with Hongkong, it think it has financial capibility advantage over China, think again,,,

This post has been edited by sinowarrior: Mar 19 2010, 07:03 AM

[Hugham]

Cross-Strait economic pact's expert talks achieve positive results
(Xinhua)
Updated: 2010-04-02 10:35

TAIPEI: The Chinese mainland and Taiwan reached "a series of agreements" for a long-awaited economic pact during a second round of expert-level talks, according to a statement released Thursday after the meetings.

During the two-day talks in Tashi, Taoyuan County, the two sides exchanged views on operational and technological topics for the Economic Cooperation Framework Agreement (ECFA), which is intended to normalize mainland-Taiwan economic ties and bring the two economies closer.

According to the statement, it was agreed that both sides' most urgent and necessary issues shall be considered when deciding what products and services are to be included in the early harvest program.

The mainland side said that it fully considered the interests of Taiwan farmers and did not require the island to expand its imports of mainland farm products. It is not going to include farm products in the early harvest program.

The mainland said it would "do its best" to ensure that medium- and small-sized companies and vulnerable industries on the island are not negatively affected by the program.

The two sides also reached agreement on a timetable for consultations concerning rules of origin, the statement said without giving details.

In addition, the mainland will consider Taiwan's request to expand the tax reduction items in the livestock and farming categories that the island will send to the mainland.

The pact will not involve the mainland sending labor to Taiwan.

The two sides also agreed to hold the third round of expert-level talks on the mainland "as soon as possible," according to the statement.

The mainland side is composed of directors from the mainland's Association for Relations Across the Taiwan Straits (ARATS), experts and economic affairs officials.

The expert-level meetings focus on preparing a framework for formal ECFA discussions at the next round of talks between ARATS and its Taiwan counterpart, the Straits Exchange Foundation, which will take place in the first half of the year.

http://www.chinadaily.com.cn/bizchina/2010...ent_9680669.htm