The Influence of ECFA on China's Die and Mould Industry

Due to the excessive concentration of China's export structure on products that are highly cyclical and linked, and mainly based on OEMs, our country has been severely traumatized by this wave of global financial tsunami, and molds are one of the end products for mass production. As an important basic tool, the mold industry has also suffered a considerable degree of impact; however, in recent years, under the strategy of the domestic mold industry, which has jointly promoted high-value molds in the industry, the energy of subtle mold processing technology has improved. The stage of the domestic mold market has gradually improved. General assessment, in 2013 in the traditional electronics, information, automotive and other industries back to the order, as well as the strength of national prosperity recovery, China's mold industry has gradually dawned.

Mold refers to the tools used to restrict the flow of forming materials and shape them into specific shapes and sizes. It can also be divided into two types: Mold: Molded materials are liquid, such as plastic injection molds, die casting molds, etc.; : Shaped materials are solids, such as forging dies, stamping dies, etc. Mold is a key tool for the production of components, also known as the mother of industrial products, through the mold can be a low-cost, mass production, quality and uniform components. Although the mold output value is not high, but each mold can create its product price 10 to 50 times the output value, estimated China's regional product derived from the mold output value of more than 1.8 trillion.

The current state of industrial development The development of the mold industry is inseparable from the development of China's industry. In the early stages of considering the establishment of a factory, the most important factors for consideration were the labor sources, cheap labor, convenient transportation, low freight, and the availability of clustering effects for satellite factories. In the past, our country’s industrial development was highly concentrated in Taipei’s downtown. Later, due to the city’s development needs, the hardware and machinery industry that originally used to be located in Dalonglong and Nankang began to migrate to Taipei County’s Mie, Xinzhuang and Shulin areas. In the Republic of China from the 1970s to the 1980s, due to the fact that the number of die-workers and mold factories in the north was much better than that of the middle and southern parts of the country, and they also took a leading position in technology, they attracted a large number of electronic/3C and home appliance product system factories and also created Taipei. Counties and cities have become the headquarters of China's mold industry manufacturing.

The settlement of the mold industry in the central region was gradually formed with the vigorous development of the machine tool industry, hand tools industry and shoemaking industry, especially in Taichung and Changhua. The formation of the mold industry settlements in the southern region is in line with the development of transportation equipment, plastic products, and screw nuts. As a result, mold blocks have been formed in Tainan, Kaohsiung, and other townships, especially in Yongkang, Annan of Tainan, and Okayama in Kaohsiung. The area around Luzhu is most famous. However, with the development of the science park in south-central China, many mold factories follow the downstream manufacturers to the development of central and southern China. With more convenient transportation construction, many companies can outsource the manufacturing of molds to all over Taiwan, as long as mold factories can To meet the requirements of price, timeliness, and quality, moldmakers in North, Middle, and South Korea have gradually blurred their product development in recent years.

"Because our export structure is overly concentrated in the products of high boom cyclical linkage and mainly based on OEM, our country has suffered severe damage under this wave of global financial tsunami, and the mold is one of the end products for various types of production. As an important basic tool, the mold industry has also suffered a considerable degree of impact. After experiencing a 12% decline in 2008, it will continue to be affected by the aftermath of the global tsunami in 2009. It is forecast that the output value of the entire year will decline to 40 billion yuan. Compared with the same period of last year, the new Taiwan dollar has declined by 15 to 20%. The export market has also experienced a simultaneous decline of about 10%. The export value has remained only NT$17.2 billion, among which the export market for die-casting/powder metallurgy has seen the largest decline. Luo Baihui, secretary-general of the International Mould, Hardware and Plastics Industry Suppliers Association, said that in recent years, under the strategy of the domestic mold industry jointly promoting high-value molds by industry officials and researchers, the energy of subtle mold processing technology has improved, and high-priced molds have been promoted. The export ratio increased from 5% of the total mold export value in 2001 to 11% in 2008, which is also reduced to about twice the average unit price of Japanese mold exports. It shows that China has gradually increased its ability in high value-added molds. In the future, it expects to replace some of Japan in the export market and export high-value mold products.

After affecting the mold industry, ECFA has influenced the normalization of cross-strait economic and trade relations after the Malays came to power. In addition, in order to avoid the crisis of marginalization of China’s industries following the formation of the ASEAN plus three regional system, it is actively negotiating with the Chinese mainland on cross-strait economic cooperation framework agreements. (ECFA), and in 2008 China’s exports of molds to the Chinese mainland amounted to NT$6.4 billion, accounting for one-third of the total value of exports, and it is the largest export area for molds in China. Therefore, signing the ECFA will have a major impact on the domestic mold industry. Its benefits and impacts are evaluated as follows:

I. Benefits With regard to opening up the mainland market, Japan (35%), South Korea (20%), and Taiwan (13%) are among the top three mainland importers. If the two sides sign ECFA, China will receive a 5- to 8% tariff cost competitive advantage. This will help increase the market share of the Chinese mainland market; on the other hand, it can eliminate the difference in the tariff preferences of South Korea, the largest competitor, in the Asia-Pacific trade agreement (1.2%~8.4%), and it can even slow down the rate of outward migration of domestic mold manufacturers. Accelerate the promotion of the domestic mold industry and increase the industrial division of labor across the Taiwan Strait.

Second, the impact of the domestic mold market impact, due to local factors in mainland China, low cost, plus China's stamping die is still held high tariff protection, signed the ECFA will have immediate impact on the stamping industry; in addition, a large number of low prices Invasion of the product may impact most of the small professional satellite mold factories that cost themselves, making it difficult for this type of mold factory to survive. The overall increase in China's trade dependence will also increase the risk of future industrial development.