As Taiwan’s trade and shipping ties with China intensify, the development also raises concern over the island’s asymmetric dependence on the mainland which, many Taiwanese experts fear, will use it to achieve the final goal of reunification – on China’s terms.  Former Taiwanese presidential advisor Huang Tien-ling recently raised the alarm in a booklet titled “Crisis of the Service Trade Agreement – a Modern-Day Trojan Horse”, that Taiwan’s Economic Cooperation Framework Agreement (ECFA) with China, signed in 2009, could “further tie the nation’s economy to the Chinese economy”, saying that Beijing’s strategy of reunification through trade was an “open secret”.  Taiwan’s trade and shipping ties with China have grown exponentially over the years.  According to Taiwan’s Ministry of Economic Affairs (MOEA), China was in 1992 Taiwan’s 26th most important trading partner with total trade of US$ 748 million.  By 2002, total trade with China had jumped to US$ 18.5 billion, making it Taiwan’s 4th largest trading partner.  In 2012, total trade with China exceeded US$ 121.5 billion, with China becoming Taiwan’s most important trading partner and its largest export destination.   Another worrying development is that Taiwan’s investment of over $ 58 billion, as of July 2013, in China had integrated the latter into the supply chains of Taiwanese businesses, underpinning the movement of goods between and within Taiwan businesses located both in China and Taiwan. Trying to lessen its China dependence, Taiwan seeks closer trade and economic ties with other regions, particularly the ten-member strong Association of Southeast Asian Nations (ASEAN).  According to MOEA, China absorbs 40% of Taiwan’s exports; the ASEAN region is collectively, after China, the second largest market for Taiwan, absorbing some 20% of the latter’s exports.  Taiwan’s global foreign trade in 2012 amounted to US$ 571 billion; trade experts say that it is imperative for Taiwan to diversify its markets not only to reduce dependence on China but also not to miss the opportunities in the ASEAN markets. Lin Chu-Chia, the deputy minister in Taiwan’s Mainland Affairs Council, a de facto ministry handling relations with the mainland, confirmed in a conversation with American Journal of Transportation that China accounted for 40% of Taiwan’s exports and that the island republic was looking at other markets for diversification.  “The member states of the ASEAN region are important for us,” Lin emphasized.  Taiwan, which has signed a free trade agreement (FTA) with New Zealand and is finalizing FTA talks with Singapore, wants to also sign similar accords with the other ASEAN member states. “FTAs are a good way to increase trade and economic ties with the ASEAN countries. We are working in that direction,” Lin acknowledged.  Dale W. Jieh, the deputy chief negotiator from the Office of Trade Negotiations in Taiwan’s Ministry of Foreign Affairs (MOFA), said that FTA negotiations with the Philippines and Indonesia were proceeding apace and “we will also, naturally, like to have similar agreements with other ASEAN member states”.   At the recent Asia Pacific Economic Cooperation (APEC) summit in Bali, Indonesia, Taiwanese officials held informal bilateral talks with the ASEAN and other countries on increasing trade, and business.  Taiwan has also signed ATA carnet agreements or administrative protocols with 38 countries, aimed at augmenting commerce, participating in trade fairs and expanding shipping and trade opportunities. “Naturally, we would like to build up on our already good economic and trade relations with the ASEAN countries,” Jieh told American Journal of Transportation.  In private conversations in Taipei, Taiwanese shippers told this correspondent that they would be interested to explore the possibility of increasing trade and investments with other regions, including ASEAN.  Taiwan’s Ports to be Modernized MOEA officials said that measures were being taken to upgrade Taiwan’s logistics industry and modernize its ports, aimed at supporting the launch of the Free Economic Pilot Zone project and attracting larger numbers of external tenants to it.  Six major ports as well as the Taoyuan International Airport and Pingtung Agricultural Biotechnology Park have been designated FEPZs.  For the logistics sector, the ministry has devised a three-pronged plan to enhance the industry’s hi-tech attributes, including the introduction of advanced equipment, the establishment of cloud computing platforms and the development of innovative operational models.  Diversified innovative operational models will target business opportunities in global hi-tech logistics to provide integrated logistics solutions.  The MOEA has started cross-strait cooperation – it links businesses on both sides of the strait to establish intra- and intercity and cross-straits cold-supply chains, using the latest control and tracking technology, such as RFID and sensors.  These measures, according to MOEA officials, had generated NT$ 1.7 billion (NT$ 29.375=US$ 1) of international business in processed food, agriculture, fisheries and medicinal products, adding more than NT$ 200 million to Taiwan’s domestic cold chain logistics industry revenues.  The MOEA’s Department of Commerce will introduce an integrated logistics information management platform with three types of support services which include an innovative factory-to-shop supply chain information management module, an FEPZ cargo tracking and quality control services platform, and a module to update intelligence and developments in the internationalization of the logistics industry.  In recent years, Taiwan’s government has developed the logistics industry in the FEPZs on a priority basis, helping establish an Asia-Pacific regional spirits hub, an auto and auto-parts packaging centre, a worldwide bicycle parts’ distribution center, and an Asia-Pacific paper pulp transshipment center, among others.   Taipei Port’s Record Number of Automobile Shipments Taipei port handled a record 88,000 automobiles – both export and import – as of August 2013.  According to the port’s data, more than 36,000 cars were imported and over 51,000 exported, posting a 26% - or 7,000 - increase in automobile imports and 15% - or 6,000 - more car exports over the year-earlier period.  “We believe we will have a new annual record in automobile shipments from Taipei port by end of 2013,” a port spokesman said.  Taipei port has been leveraging the advantages of its free trade zone and the pre-distribution inspection (PDI), and the parts assembling and packing services provided by a company called Tonglit Logistics located at the port.  Taipei port, which is trying to profile itself as the country’s automobile shipment hub, works closely with the country’s automobile industry which has created a seamless workflow of importing automobile engines and parts from overseas, shipping them for further use by manufacturers in Chungli, Yangmei and Miaoli, and then returned the cars to Taipei port for final assembly and exports, thus creating a complete automotive industry value chain.  Taiwanese manufacturers work closely with leading car brands such as Mitsubishi, Toyota and Ford, and exports these cars assembled in Taiwan to, mainly, Middle Eastern countries.  Experts say Taipei port is perfectly positioned as “front shop, back factory”, thus giving a strong impetus to its port installation options (PIO) business.   Kaohsiung Port Gets Modern Tugs Kaohsiung port, the heartbeat of the country’s sea-trade, is being modernized.  The plan by Taiwan International Ports’ Corporation to purchase two new 5,200 hp tugs is part of Kaohsiung port’s overall strategy to enhance Asian regional transshipment, comprehensive logistics and vessel-handling services, besides expanding port facilities to handle the needs arising from the era of the generation of large cargo vessels.  The new tugs will replace outdated models, and ensure capabilities to service post-Panamax ships; the operation to phase out outdated models, which should be completed by early 2014, started in 2011 with an approved budget of NT$ 419.9 million.  The new tugs are expected to handle modern container vessels of up to 10,000 TEUs.  Kaohsiung Port, Taiwan’s biggest international harbor, and the world’s fifth largest container shipping center, processes two-thirds of Taiwan’s total sea-trade volume.  With 118 operating berths on 26.6 km of port waterline that can simultaneously accommodate up to 155 ships, the port handles some 8 million TEUs annually.  Its location makes it an ideal hub for trade routes linking Northeast and Southeast Asia.  “Kaohsiung is transforming itself into a global logistics center and a major warehousing and transport center.  We plan to reorganize the existing resources, including Kaohsiung Port, Kaohsiung International Airport, and other facilities in this region,” a MOEA official said in reply to a question by this correspondent.  Shanghai Port vs. Kaohsiung Kaohsiung port’s aggressive move towards liberalization in an effort to elevate itself to a delivery point for a London exchange has started a “liberalization race” with Shanghai which is also preparing itself for international metal trading.  The London Metal Exchange (LME) had announced in mid-June that it had selected Kaohsiung as its night-delivery location in Asia, elevating Kaohsiung as the first port in the Taiwan Strait to get a LME certification as a delivery point.  Kaohsiung expects to start handling metals for futures trade by November end, thus overtaking Shanghai’s ambitious free trade zone plans.  Chinese government officials also dropped hints in August that Shanghai free trade zone would be developed into a delivery point for foreign commodity futures dealers, giving rise to rumors about LME’s possible role in such a project.  Undeterred by Shanghai’s attempts to profile itself as a metals’ trading hub, Taiwanese shipping circles  point out that Taiwan offers greater advantages of much more mature market, sound laws and regulations, and good governance over Shanghai.