Simply stated, if Taiwan’s business model does not change, Taiwanese firms will continue to be reliant on low cost labor for survival. With the rise of wages in China, these firms would be compelled to move to other states in Asia with lower wages. Currently, Taiwan’s manufacturing wage is only half of Korea’s. The crux lies in Korea has already transformed from its previous contract manufacturing model to one centered on brand marketing.You don't have to believe in the possibility of Taiwan having its own brands to see the current version of ECFA as a status quo policy.
In conclusion, the negotiation strategy on ECFA should premise on assisting Taiwanese firms to embark on the new business model which emphasizes branding and innovation instead of seeing it as a means to prolog the current contract manufacturing business. The government needs to pay more attention to the service industry and to the potential barriers and risks associated with Chinese marketing. “Early Harvest list” can be likened to a pain killer that relives the pressure of potential trade diversion caused by China’s FTA with ASEAN countries and therefore is not the focus of ECFA. Taiwan should firstly open up the Chinese market for its service industry and bolster its brand marketing efforts. Succeeding on this front, ECFA will be the catalyst in triggering a new wave of rapid and lasting economic growth for Taiwan.
[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums!