Taiwanese business in Dongguan to benefit from ECFA

Chen Yunlin (2nd R, front), president of the mainland-based Association for Relations Across the Taiwan Straits (ARATS), attends the signing ceremony of the long-awaited Economic Cooperation Framework Agreement (ECFA), with Chiang Pin-kung (2nd L Front), chairman of the Taiwan-based Straits Exchange Foundation (SEF), in Chongqing Municipality, southwest China, June 29, 2010. (Xinhua/Chen Jianli)

Taiwanese firms in Dongguan have begun to envision greater prosperity for their businesses as the Chinese Mainland and Taiwan signed a landmark trade agreement on Tuesday in the southwestern municipality of Chongqing, Dongguan Daily reported on June 30.

The Economic Cooperation Framework Agreement (ECFA), signed by the two sides on June 29, will slash tariffs on hundreds of categories of goods traded across the Strait. It is set to take effect once both sides "complete due procedures" in follow-up talks.

A total of 539 Taiwanese products from 10 industries, including agricultural products, auto parts and machinery, that make up more than 16% of the island's total exports to the mainland, will receive preferential tariffs or zero tariffs within the next two years, according to ECFA.

According to Dongguan Daily's report on Wednesday, the production equipment and raw material that Taiwanese firms in Dongguan import from Taiwan are expected to be cheaper when the ECFA takes effect. The lower production cost will make their products more competitive when they are sold back to Taiwan.

Firms in the fields of textile and garments, energy and machinery are among those who will realize the greatest benefit from the Agreement, the report said.

Dongguan is currently home to about 7,000 Taiwanese enterprises or approximately 10% of the total number in mainland. Most of them are manufacturers of toys, garments, electronic products and machinery tools.

Dongguan is also home to two Taiwanese banks and one Taiwanese hospital at the moment. They are expected to embrace a more favorable environment for further development as the package officially allows Taiwan businesses to access 11 service sectors on the mainland, including banking, accounting, insurance and hospitals, the report said. New Taiwanese hospitals will face easier and simpler access to open facilities in Dongguan, according to the report.

Dongguan will send a delegation to discuss cooperation between Dongguan's Humen Port and Taiwan's Keelung Port on July 17. The objective will be to prepare for the expected increase in cross-straight transport and other economic activities.

(By Morvin Chow)