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Service agreement should be seen as opportunity for growth: VP

Service agreement should be seen as opportunity for growth: VP

Taipei, Aug. 14 (CNA) Vice President Wu Den-yih explained the restrictions put on Chinese investments in local industries under a trade-in-services agreement on Wednesday, taking the opportunity also to discuss the advantages brought about by the pact. At a conference focusing on transforming local industries, Wu promised that the government will not allow Chinese investment in any industries that are not covered by the wide-ranging pact. The vice president also sought to assuage fears of "investor immigrants" from China, stating that lifting some investment barriers does not mean that Taiwan will start allowing large-scale Chinese immigration. Since the doors were first opened to Chinese investors in 2009, the government has approved 398 applications for investment worth US$700 million up through June of this year, Wu said. That has brought over only 216 Chinese managers while at the same time employing 6,771 locals, he noted. The government has not allowed laborers from China, nor does it allow Chinese nationals to apply for certificates or licenses in Taiwan, he said, adding that there is no truth to the common misconception that local taxi services will be opened to Chinese investment. Of the 64 local industries covered by the service pact, 27 relaxed barriers for Chinese investors starting back on June 30, 2009. Only 37 industries in Taiwan will see changes when the agreement goes into effect, he said. A lot of attention has been put on the influence of Chinese interests in Taiwan's printing and publishing sector, Wu noted, but he explained that Chinese firms are limited to a stake of lower than 50 percent in any Taiwan company. The rules are stricter in construction, where Chinese firms can have a stake of no more than 12 percent, he said. By comparison, Taiwan's construction and printing industries can enjoy 100 percent ownership in China under the pact, he said. Wu also said that the cross-strait trade-in-services agreement will provide a good platform for Taiwanese businesses looking to grow. China's service sector is lagging behind, he said, while its population of 1.3 billion potential customers could mean big expansion potential for Taiwanese businesses. Speaking at the same event, presidential adviser Shih Yen-shiang urged industry players to develop in China by building their brands through partnerships with Chinese and foreign brandnames. The recent economic boom in China means higher living standards and a greater demand for the service industry, which Taiwan can help meet, Shih said. Taiwan got a 20-year head start on developing its service sector, but local firms will need to refine their recruiting, training, and management skills to find success in China's highly competitive market, he added. (By Wu Chia-ying, Huang Chiao-wen and Y.L. Kao)