EFCA Opens Investment Opportunities In China

by Mary Swire, Tax-News.com, Hong Kong

08 November 2010

Influential figures from the financial services industry in the Far East have discussed the importance of the Economic Co-operation Framework Agreement (ECFA) between China and Taiwan.

An audience of over 60 senior intermediaries attended a seminar in Tapei, organised by Equity Trust, the leading independent supplier of trust and fiduciary services, to learn more about the opportunities the ECFA is likely to create.

The ECFA, signed in June this year, is the first such agreement between the two jurisdictions and is designed to reduce tariffs and commercial barriers and boost bilateral trade. The seminar centred on the fact that Taiwan can now invest directly into China, although it is still early days and there are likely to be supplementary agreements to follow.

“Intermediaries in Taiwan know Equity Trust and the services we offer,” states Eddy Yeung, Director from Equity Trust’s Hong Kong office. “Now the climate of investment between the two jurisdictions is further enhanced, those who attended clearly valued the opportunity to gain knowledge and insights regarding China, which they will be relaying to their clients.”

The economic cooperation framework agreement (ECFA) between Taiwan and China came into effect on September 12, one day after both sides confirmed that all necessary domestic procedures had been concluded.

The ECFA which was signed on June 29 after a long negotiation process. The agreement makes significant reductions, over a three-year period from January 1, 2011, to tariffs on 539 Taiwanese goods imported into China, while Taiwan will reduce tariffs on 267 Chinese products.

Under the agreement, the two sides will also continue their discussion on the further liberalization of trade in goods and services, and of investment, during the six months following its coming into effect.

An agreement for the protection of intellectual property rights (IPR), signed at the same time as the ECFA, but independent of it, also came into force on the same day. Under the IPR agreement, trademarks and patents registered in each country will be recognized, and Taiwanese and Chinese agencies have been nominated to take charge of an IPR dispute resolution process.

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