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Korean tension harmful for Taiwan: CEPD

2010/05/26 17:49:37

Taipei, May 26 (CNA) Tensions between South and North Korea willbring about more adverse effects for Taiwan than advantages, a topeconomic official said Wednesday.

"The biggest advantage is that Taiwan might receive some orderspreviously placed with Korean firms and capital might also flow intoTaiwan due to the conflict, " Christina Liu, the new minister of theCouncil for Economic Planning and Development (CEPD) , toldlegislators when asked about the possible impact.

"But in general, there will be more downsides than upsides forTaiwan, " Liu told the Legislative Yuan's Economics Committee whileacting in her capacity as CEPD minister for the first time.

Even if there are positive effects on Taiwan's LED and DRAMindustries, it will take a few months for them to come to light, shesaid.

Previously tense relations between Seoul and Pyongyang have beenfurther strained by speculation that a report to be released in theSouth on Thursday will blame the North for the sinking of a SouthKorean ship in March.

Signing an economic cooperation framework agreement (ECFA) withChina will provide a major fillip for Taiwan enterprises, she said,adding that businesses should seize the opportunity to forgealliances with multinationals because local companies will enjoy a 17percent corporation income tax rate -- better than the 22 percentthat South Korean firms are subject to.

"The CEPD will continue working to relax restrictions on thespecial economic zones and touting benefits of the ECFA to show theinternational community the advantages Taiwan will possess amid itsglobalization efforts," she added.

In response to lawmakers' concerns about unemployment, Liu saidthat it will be difficult for the government to meet promises tobring the jobless rate below 5 percent this year and 3 percent by2012. But she added that a 6 percent economic growth rate for thisyear seems achievable.

She was referring to President Ma Ying-jeou's "6-3-3" campaignpromises to achieve a 6 percent economic growth rate in 2012, bringthe unemployment rate below 3 percent and raise per capita incomeabove US$30,000 at the same time.

The president could not have foreseen the effect of the 2008global economic crisis when he made the campaign promises beforecoming to office earlier that same year, Liu explained.

(By W.C. Shieh and Flor Wang)