20130623 SERVICES PACT: Pact worries TCM sector

SERVICES PACT: Pact worries TCM sector

By Lin Hsiang-mei and Jason Pan / Staff reporter, with staff writer

Shop owners and suppliers in the traditional Chinese medicine (TCM) sector have said their businesses are under threat after the sector was included in the cross-strait service trade agreement, adding that “the government is killing Taiwanese industry.”

“Under this government’s policy, traditional Chinese medicine businesses will disappear,” said Chu Pu-lin (朱溥霖), chairman of the National Union of Chinese Medicine Associations of the ROC.

Traditional Chinese medicine is among the sectors to be opened up to Chinese investment in the cross-strait pact, which was signed in Shanghai on Friday.

Chu said that about 90 percent of the ingredients and materials used in traditional herbal medicine are imported from China.

“For Taiwan, we do not produce these materials, and for the finished products, we cannot sell them back to China. The terms of the agreement are very unequal,” he said.

“Once we open up our market, Chinese companies can control the supplies at source. They also have much lower costs for labor, marketing and other overheads than Taiwanese firms. Once the market is opened up, there will be a price war,” he added.

Chu said that some Chinese firms currently sell their products through Taiwanese retailers, but under the cross-strait agreement, they will be able to make direct sales in Taiwan

“Chinese companies are close to their suppliers, and they have lower labor costs. Their overall prices will be cheaper than those of Taiwanese firms,” he added.

“The government is forcing Taiwanese traditional Chinese medicine companies to hand over this business to China,” Chu said. “Our government is supposed to help Taiwanese companies do business, but instead, they are trying to kill us off.”

Chu said the government had consulted with local TCM companies regarding the agreement and had encountered widespread opposition to inclusion in the pact.

“It seems the government did not care for our objections, and it did not explain contents of the agreement to us. Now the industry will have a hard time to adjust,” he said.