Direct shipping benefits two sides

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Source: CCTV.com | 11-05-2008 08:50

The agreement reached on direct sea links between the mainland and Taiwan is being welcomed by many on both sides. They say easy access, plus new tax benefits, will mean a big boost to income and development.

The current turnover across the strait is 100 billion US dollars. While shipping volume between the two sides has hit almost 40 million containers in total.

Li Jiansheng, deputy director of Taiwan Affairs Office, Min. of Communications, said, "Previously, cargo across the strait had to go through a third port. Statistics show that every detour meant costs going up by as much as 20 thousand US dollars. And with about 5,000 trips between the two sides, increased cost adds up to as much as 100 million US dollars."

But direct shipping between the two sides is expected to significantly facilitate trade and personnel exchange. And this could cut travel time and costs substantially.

Another benefit is the unilateral tax that cargo ships will be able to enjoy. Previously, companies had to pay tax to both sides in both operating costs and profit.

Li Jiansheng said, "From the operating perspective, this is the most favorable policy for transport companies, and the one about which they are most concerned. The current tax rate is 4.65 percent for both sides. As a result, after the agreement, companies can eliminate tax on one side. That is a 4.65 percent reduction in operating costs."

Industry insiders say apart from direct benefits, the move will also bring more business opportunities in the future. Currently, many mainland companies are forbidden to open outlets in Taiwan. But the new deal means there may soon be a lifting of this ban. Shipping giants from both sides say closer economic ties across the strait could lead to billions of dollars of business in the future.

Editor:Zhang Ning