HONG KONG: Taiwan will accelerate development of cross-Straits business, as it seeks to take hold of opportunities presented by the strong economic growth on the mainland, a top government official said yesterday.

Taiwan's "Vice President" Vincent Siew said the island's business orientation on the mainland will gradually shift from manufacturing to the growing consumer market.

"To compare with our competitors, the global financial crisis has had a more severe impact on the Taiwan economy. The key is that Taiwan has been over-relying on the mainland as a manufacturing base focused on the US and Europe," Siew told an economic forum in Taipei.

Siew noted that the government is "determined to implement concrete measures to change Taiwan's core competitiveness," so as to keep pace with the robust economic performance on the mainland.

Taiwan may also adjust its direction in industrial development by actively exploring new technology as well as establishing its own brands, Siew added.

According to the "Ministry of Commerce", cross-Straits trade in February jumped 12.3 percent to $5.65 billion, up from $5.03 billion in January, despite a year-to-year drop of 39.4 percent.

In the dimension of cross-Straits trade, the bulk of mainland imports are semi-manufactured or manufactured products from Taiwan, which the mainland then exports to developed economies.

Commenting on the Island's plan to change its business model on the mainland, Christopher Wong, an economist at HSBC Global Research, said it is good planning for Taiwan to develop a diversified business portfolio.

He pointed out that most of Taiwan's exports have relied on developed markets, such as the US and Europe. However, these markets have seen demand deteriorate amid the global economic recession.

"Apart from Taiwan products, mainland consumers can also buy goods from South Korea. Therefore, Taiwan products have to be better than those made in South Korea," Wong said.

However, Wong added, the price of Taiwan goods is still lower than that of South Korea, an advantage local enterprises should maintain on the mainland market.

"It would be better for the ECFA (Economic Cooperation Framework Agreement) to be signed," Wong added.

ECFA is aimed at reaching a consensus on trading cooperation across the Taiwan Straits.

The fourth round of talks on the issue will be held in the second half of this year and will cover fisheries cooperation, quarantine of agricultural products, standards for inspection and avoiding double taxation.

(HK Edition 05/15/2009 page6)