Questions and Answers

Summary

44. Dr Chao-Jen Huang explained that FDI brought advantages in terms of trade and division of labour. This strengthened competitiveness, especially with the formation of a single market. He said that regionalism had negative effects on other regions and countries. If one looked closely at Taiwan, China and South Korea, one would find similarities in their economic structures. If Taiwan joined the economic integration of East Asia, there might be a little setback to China and South Korea, but Taiwan would suffer a major setback if it did not join the FTA. However, ASEAN would be much better off with economic integration with Taiwan.

45. Dr Hong-Zen Wang stressed the importance of the Taiwanese business network. The government had conducted many surveys on the sources of Taiwanese investments. The sources were the local society, the local Taiwanese business people and Taiwanese companies in other countries. For example, any investment in Penang (Malaysia) might acquire around 60 per cent of its materials from another Taiwanese company. Hence, when one said that Taiwanese investment increased trade, this trade was often between Taiwanese companies or within the Taiwanese business network.

46. Mr Rodolfo Severino stressed that ASEAN was trying to promote a single market, so that the supply chain would be enlarged. The Japanese recognized this and they were pushing ASEAN to integrate the regional market. He pointed out that there was actually no contradiction between APEC and bilateral FTAs. The proposed Free Trade Agreement for the Asia Pacific was not going fast enough, and so it was very natural for countries in APEC to go into something that was more possible.

47. Mr Severino prophesized that FTAs were more than economic in nature. Essentially, FTAs conferred political status. They sent out signals to the international community about the relationship between the two parties to the FTA. They also sent signals to the business community that it was good to invest in and trade with the partner countries.