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Taiwan’s ports, once among the world’s busiest before they were eclipsed by the mainland economy, can no longer compete on shipping volumes but hope to use their status as free-trade zones to entice rivals from across the strait to cooperate rather than compete.
The island’s biggest port, in the southern city of Kaohsiung, ranked world No 3 in 1995 but had slipped to 13th in the World Shipping Council rankings for 2012.
Northern port Keelung is in similar dire straits as it lacks the land or deep water needed to expand.
These ports were the star performers in the 1990s, piggybacking a rapidly industrialising Asia, including Taiwan, at a time when the mainland was yet to take off as an economic powerhouse.
Rapid gains for Taiwan’s ports were unlikely today, the island’s Transport Minister Yeh Kuang-shih told the South China Morning Post. But he added that the evolution of the island’s five ports into free-trade zones raised trade value and that Beijing now wanted to set up similar zones operated by both sides.
Taiwan’s legislators are also weighing laws to create free economic zones at seven ports, allowing service-sector businesses such as hospitals and universities to get tax breaks.
The island is increasingly looking to free-trade initiatives as ways to stimulate the US$500 billion economy that now finds itself cramped by faster-growing exporters such as mainland China, South Korea and Southeast Asia.