Friday, May 07, 2010

Task force on China smuggling to be formed

I noted a few days ago that one way China will blow holes in our economy in Taiwan is through smuggling -- a slow-motion catastrophe for Taiwan's industries and for its image as a quality manufacturing location. This is a major problem for anyone claiming that China is going to honor its ECFA commitments -- even if it wants to, it can't. Taiwan Today translated a China Times report which shows that the government is fully aware of what will happen to Taiwan's industries:
A special task force aimed at cracking down on mainland Chinese-made counterfeit products and pirated materials circulated in local markets is being formed by the Ministry of Economic Affairs.

“From next week, a full-scale campaign will be initiated to stem the flow of counterfeit goods from mainland China,” Chen Jay-san, director general of the MOEA’s Bureau of Standards, Metrology and Inspection, said May 6.

Established in response to ROC President Ma Ying-jeou’s directive to eradicate such goods, the initiative signals the government’s commitment to supporting Taiwan’s beleaguered manufacturers.

According to Chen, priority will be given to sectors in danger of being decimated by the proposed cross-strait economic cooperation framework agreement. This includes those producing bags and suitcases, bedding, ceramics, clothing, herbal medicine, home appliances, pesticides, printing, shoes, socks, sweaters, swimwear, stone, towels, underwear, wood and woven socks.
And of course, Taiwan's rep will also be a victim:
Huang Lai-her, bureau deputy director general, said mainland Chinese firms habitually infringe upon Taiwan-owned trademarks. “This usually takes the form of falsely labeling products so as to capitalize on the island’s reputation for turning out high-quality products.”
A Taiwan News piece presented traditional industry comments on smuggling offering further information. Responding to the President's order for a crackdown -- as if crackdowns do any good -- industry reps said...

Huang Kuang-yi, the head of an alliance of Taiwanese bedding manufacturers, displayed a wide variety of Chinese products bearing the "made in Taiwan" label during the meeting, saying that as more and more substandard products continue to flow into the market, many consumers do not know where to buy genuine Taiwanese goods.

Huang said that if the government can pull all counterfeit Chinese products from Taiwan's market within three months, then the traditional industries will support the ECFA.

Lee Jung-heng, chief executive officer of a Pingtung County agricultural development association, said that during a visit to Beijing, he found almost all supposedly Taiwanese agricultural products on the market to be counterfeit, and he suggested that the government should help to market Taiwanese farm produce rather than introducing agricultural protection policies.

Meanwhile, Chien Ying-hsueh, president of the Taiwan Textile Printing Dyeing & Finishing Industry Association, reported that Chinese dye materials can contain toxic ingredients that cannot be easily checked by Taiwanese quality control authorities. She expressed hope that the government and schools will use only Taiwan-made uniforms and impose stricter controls on dyeing processes.

Chinese smuggling also affects Taiwan's reputation in other ways. For example, this piece on honey smuggling into the US says that Taiwan is one of the transhipment points for smuggling of Chinese honey.

Not all the traffic is from China to Taiwan. Just for kicks, check out this piece on smuggling of fuel from Taiwan to China. The state-owned oil company in Taiwan produces subsidized fuel for fishing boats, which is regularly diverted to black markets in Taiwan and China to undersell gas and diesel for vehicles.
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