Taipei, Nov. 24 (CNA) Politics has been and always will be the dominant factor influencing Taiwan-China economic exchanges, and the current state of cross-strait economic ties may provide Taiwanese businesses with a great opportunity to re-position themselves, economists said in a seminar held in Taipei Saturday.
In an attempt to provide an academic point of view, economists showed cautious optimism in their review of cross-strait economic exchanges during the seminar which examined the evolution of cultural, economic, political, and agricultural exchanges between Taiwan and China.
"I believe it's time again for Taiwan to revisit its plan of making itself an 'Asian-Pacific Management Hub' which was proposed years ago, " said Kung Ming-hsin, vice president of the Taiwan Institute of Economic Research.
The imbalance in cross-strait trade relations is apparent, said Kao Charng, a professor at National Dong Hwa University, noting that Taiwan enjoyed a trade surplus of US$66.4 billion with China in 2006 but also had a deficit of US$203.3 billion in money remittances the same year.
"People have been talking about Taiwan being hollowed out and marginalized, but it is just a matter of time before Taiwanese manufacturers move their businesses to China or other countries with cheaper labor, " Kao said.
"In fact, the 'exodus' of certain manufacturing sectors did stimulate the process of Taiwan's industry transformation and forced Taiwanese businesses to think about their future, " he added.
Hong Hai Precision Industries has been a successful benchmark for Taiwanese business people, Kung said. Hong Hai has expanded its global operations from China to Vietnam, India and Eastern Europe while maintaining its base in Taiwan.
For the past several years, local companies have shown their strength in innovation. Unfortunately, most of them have failed to take advantage of this by working with their counterparts in China to achieve greater commercial success, Kung said.
Political factors should never be left out in discussions on Taiwan-China economic exchanges, because of the unique situation on both sides of the strait, Kung and Kao both said.
"Looking back, you will find that the intensity of cross-strait economic activity has been closely linked with the political atmosphere in Taiwan and China. And for the foreseeable future, this will continue to be the case," Kung said.
"I've believed all along that Taiwan should actively re-position itself on the economic map of the future. We should have self-confidence and have a more open-minded mentality toward investing in and trading with China, " said Hong Chi-chang, chairman of the Strait Exchange Foundation who moderated the session.
The two-day seminar, organized by the Institute for National Policy Research, concluded Saturday.