Randomly Noted

Taiwan’s top economic planner tells DJN the island urgently needs closer trade ties with mainland China as tariff barriers fall elsewhere in the region, giving other Asian countries a relative advantage with Beijing. DJN’s Daniel Ong Kian Hong interviewed Chen Tian-Jy, minister of the Cabinet-level Council for Economic Planning and Development. Daniel writes, “It is easy to understand this sense of urgency. Taiwan’s exports of petrochemical products to China, according to the economic ministry, face on average an import tariff of 6.5%. The rate for the same type of products exported by Asean nations has steadily fallen to 0.98% this year, and will fall further to 0.25% in 2010, from 6.01% in 2005. China is a huge market, buying around half of the petrochemical products exported by the island…”  The China-Taiwan equation is, of course, politically fraught. But there’s no denying Taiwan’s economic future is inextricably tied to China’s. It’s a tricky geopolitical conundrum but from an investor’s point of view, an interesting opportunity. As CLSA writes, “The story is just beginning, not ending. Relative-return investors, with Taiwan in their benchmark, can certainly not afford to ignore this political dynamic.” Continue reading…