Cross-Strait Cooperation on Intelligent City in the Post-ECFA Era

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1 Cross-Strait Cooperation on Intelligent City in the Post-ECFA Era Kung Wang Ph.D. Chair Professor, China University of Technology June 26,

2 Agenda 1. Mainland China s Twelfth 5-year Plan 1.1 Eleventh 5-year Plan s achievement and review 1.2 Objectives and challenges 1.3 Implications for cross-strait cooperation 2. Economic Cooperation Framework Agreement (ECFA) 2.1 Framework structure 2.2 Progress and opportunity 3. Cases of cross-strait cooperation in intelligent city 3.1 Smart Wi-Fi City 3.2 CHT s ien 4. Concluding Remarks 2

3 1. Achievements of Eleventh 5-year Plan Economic growth and structure GDP expanded 11.2% annually on average (7.5% as planned) Growth still reliance on investment and exports, contribution of household consumption has declined since 2006 (from 38% to 35%) Service sector share of GDP 43% (43.5% as planned) R&D spending as share of GDP 1.75% (2% as planned) Human and social development Increasing urbanization: urban share of tot al population 4.5% (4.0% as planned) Almost 58 million new jobs were created in the urban sector Worsening income distribution between urban and rural area: Average per capita urban disposable income RMB 19,109 (10,493 in 2005) Average per capita rural net income RMB 5,919 (3,255 in 2005) Gini coefficient 0.5, above international warning level of 0.4 Resource and environment Reduction in energy consumption per unit of GDP 19.1% (20% as planned) 3

4 Unsettle Development Issues 1. Growth vs. Efficiency 2. Market vs. State 3. Global market vs. Domestic demand 4. Income redistribution Global Financial Crisis in

5 Twelfth Five-Year Plan Main objective on economic restructuring Promoting domestic consumption Developing the service sector Encouraging higher value-added manufacturing Conserving energy Cleaning up environment Challenges: Differences between central and local governments Open-up of service sector and regulatory reform Major policy instrument Urbanization Source: Casey, Joseph & Koleski, Katherine. (2011). Backgrounder: China s 12th Five-Year Plan. U.S.-China Economic and Security Review Commission 5

6 Implications of cross-strait cooperation Co-development of high-value added products and services for exporting to emerging countries Common technological platform and standard Utilization of local advantage/resources for city competitiveness Application of ICT industrial capability to regional transformation Partnership among industry, government and research Smart green city as strategic platform for cooperation Urbanization for inclusive and sustainable growth Promotion of emerging strategic industries 6

7 2. Economic Cooperation Framework Agreement (ECFA) A landmark trade pact signed on June 29,2010 to legally transform the cross-strait economic link Cooperation framework: ECFA (Economic Cooperation Framework Agreement), effective 12/9/2010 Trade in Goods Trade in Services Investment Protection & Facilitation Early Harvest List Economic Cooperation Dispute Settlement - Preferential benefits WTO+. - Early Harvest Program - Coverage of ECFA for further expansion 7

8 ECFA Progress and opportunity Progress Early Harvest program (EHP) in June 2010 to immediate liberalize trade in goods and service, expecting to reach zero tariffs for EHP in Jan China eliminates or lower tariffs on 539 Taiwanese items, accounting for 16.1% of imports from Taiwan Taiwan does the same for 267 Chinese items, accounting 10.5% of imports from China Cross-Strait Agreement on Intellectual Property Right Protection and Cooperation in June 2010 Obliges both sides to engage in negotiations on the eventual scope and plan of IPR protection Offers protection for geographical indications and well-known trademarks Cross-Straits Economic Cooperation Committee (CSEC) in Jan Deal with negotiations for the subsequent four agreements, such as Dispute Settlement Agreement, Bilateral Investment Agreement Source: Hsieh, P. L., (2011) The China-Taiwan ECFA, Geopolitical Dimensions and WTO Law, Journal of International Economic Law, 14(1),

9 Opportunities in Post-ECFA Era Deepening bilateral industrial reorganization Industrial upgrading and promotion of emerging industries Collaboration for intelligent urbanization Transformation of the 2nd and 3rd tiers cities by Integrating ICT, green energy and urban development Joint R&D, common technological standards 9

10 3. Cases :Cross-strait Cooperation on Smart Wi-Fi City Ningbo City Government, China Mobile and Taiwanese companies agree to jointly experiment on intelligent logistics, intelligent healthcare and e-government in Ningbo City. New Generation Network Communication Co., Ltd. and Taiwan companies agree to jointly experiment on maritime management and security services/emergency rescue in Ningbo Harbor. Chengdu City Government, China Mobile, and Taiwanese companies agree to jointly experiment on intelligent transportation, intelligent healthcare, intelligent tourism, emergency rescue and wireless entertainment in Chengdu City. 10

11 CHT s ien Intelligent ENergy Management 11

12 ien s Performance Government Agencies Hospitals Schools Department Stores Office Buildings Data Centers 12

13 Concluding Remarks 1. Co-development of high-value added products and services for exporting to emerging countries 2. Utilization of local advantage/resources for city competitiveness 1) Application of ICT industrial capability to regional transformation 2) Partnership among industry, government and research 3. Smart green city as strategic platform for cooperation 4. New directions of collaboration 1) Co-branding for global market 2) Joint research on consumer demand for smart green technology applications 13

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