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Giant’s Competitiveness Strengthened with Free Trade Agreement between Taiwan and China

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Giant’s competitiveness will be strengthened thanks to the recently signed Free Trade Agreement between Taiwan and China. This was said by Giant Global Group CEO Tony Lo (photo) last week in a meeting

Giant’s Competitiveness Strengthened with Free Trade Agreement between Taiwan and China

TAICHUNG, Taiwan – Giant’s competitiveness will be strengthened thanks to the recently signed Free Trade Agreement between Taiwan and China. This was said by Giant Global Group CEO Tony Lo (photo) last week in a meeting with Bike Europe. In view of that agreement Giant started the construction of a huge new facility in China last September.

Giant’s new plant (the company’s 9th as it already operates 5 others in China as well as 2 in Taiwan and 1 in Europe) is being constructed in Kunshan, China. On September 19 the ground breaking ceremony took place for the facility that will have an initial capacity of one million bikes as well as (carbon and alloy) frames. The huge facility is being built on an over 400,000m² plot and required an investment US dollar 36 million (26 million euro).

In a meeting with Bike Europe CEO Tony Lo said that Giant needs the extra capacity in view of the Free Trade Agreement between Taiwan and China. This agreement which is officially called the ‘Economic Framework Agreement’ (ECFA) was signed by government officials last June and came in force last month. It will lead to gradually lowered tariffs levied on bicycles and parts exported from Taiwan to China. Currently the import duty in China stands at 13% for bikes and parts which after one year will be dropped to 5%. The next year –  September 2012 – the import duty will be dropped completely to 0%.

In a statement Giant Global Group says that in the post ECFA era: “Giant can integrate its factories at both sides of the Taiwan Strait to serve the China/Taiwan markets. It will raise the competitiveness of Taiwan-made higher-end bicycles in China and vice versa.” Tony Lo added that in view of the ECFA agreement Giant is building its size wise largest facility ever.

It goes without saying that not only Giant will benefit from the ECFA agreement. Also the numerous other members of Taiwan’s bike industry with most of them operating facilities in China are to profit from it and raising their international competitiveness. According to a newspaper report, Taiwan’s deputy minister of economic affairs Liang Kuo-hsin said that the agreement will provide the Taiwan industry a huge boost. He predicted that Taiwan’s 2010 economic growth of 8 to 9% will in the coming years surpass the 10% mark.

The Free Trade Agreement between Taiwan and China will also have big repercussions on the post era of 48.5% anti-dumping duties against bikes and parts imported from China into Europe. If the European Commission decides (expected for next January 2012) for a complete drop of the dumping duties, the European bike industry will be faced with a united and stronger than ever Taiwan/China bike sector. This will undoubtedly contribute to a shift in assembly operations from Europe to China.

 

 

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