Taipei, April 8 (CNA) Harvard Business School Professor MichaelPorter said Thursday in Taipei that he supports a proposed trade pactbetween Taiwan and China, but he also urged Taiwan to work on itsweaknesses to attract foreign investment.
"Taiwan already has a huge economic relationship with Chinadespite the fact that there is no framework, " he said in a speechdelivered at a forum held at the National Dr. Sun Yat-sen MemorialHall.
"What we are talking about here actually is just, formalizingsomething that's already happening, " the well-knowneconomist-turned-strategist said.
Michael DeNoma, chairman of the Taipei-based Chinatrust CommercialBank and one of the panelists at the forum, asked Porter if there areany alternatives to the economic cooperation framework agreement(ECFA) that is due to be signed between the two sides of the TaiwanStrait later this year.
"I thought about that, " Porter replied. "I don't see anyalternative, any practical alternative. But more importantly, I don'tsee why we would want an alternative."
Taiwan can construct a formal trade relationship with China,which can allow Taiwan to continue to substantially enhance itseconomy over time, he said.
There are many agreements like this that other countries havesigned with China and in many cases, these countries have much lessstrength than Taiwan, Porter said.
"I am confident that you will be much better off with such aframework than you will be without it," he added.
Porter also urged Taiwan to focus on "getting the fundamentalsright" by building an attractive business environment or establishinga good infrastructure rather than worrying about the size of China.
"Size, per se, is nothing to fear," he said.
Porter said, that for example, his home state of Massachusetts inthe United States has to compete with much bigger states such as NewYork, Connecticut, Texas and California.
"Because we have a very educated workforce, because we are aknowledge center, because we are innovative, because we have a verystrong base in financial services and a few other fields, we havebeen able to prosper," he noted.
While lauding Taiwan for its economic achievements over the pastdecades, Porter said the country needs to work harder to attractworld-class companies.
He also called on the country to address "some chronicweaknesses" by reducing corruption, bureaucracy and regulatorycomplexity, as well as improving labor force flexibility and thequality and transparency of the financial market.
He further noted that Taiwan needs to strengthen innovation andresearch development in local universities, pointing out that theydid not rank high on the list of Taiwanese originators of U.S.patents between 2004 and 2008.
(By Alex Jiang)