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Taiwan announces opening to investments from China

Taiwan announces opening to investments from China

TAIPEI (Taiwan News) – The Ministry of Economic Affairs officially announced the opening of Taiwan to investments from China Tuesday.
Chinese investors could put money in more than 100 types of enterprises, and also set up affiliates and establish offices in Taiwan, according to the document named the “licensing regulations for citizens of the mainland area to invest in Taiwan.” Applications for the investments could start immediately, reports said.
The announcement was seen as a major step in the improvement of relations with China started after President Ma Ying-jeou took office in May last year.
However, Chinese investment in sectors like semiconductors, flat panel displays, construction and Chinese traditional medicine would not be allowed yet, reports said. The sectors could well come up for consideration during an eventual second round of liberalization, officials said.
Chinese investment in major public construction projects was only possible under the Build-Operate-Transfer formula, officials said. Under this provision, Chinese companies could eventually be allowed to bid for projects such as an exhibition hall at the Taoyuan Aerotropolis near Taiwan Taoyuan International Airport, but not for new construction on the High Speed Rail system.
Companies based in third territories but controlled by Chinese interests or having a Chinese shareholding of more than 30 percent would be considered as Chinese, Economics Vice Minister John Teng told a news conference Tuesday. Companies controlled by China’s military would not be allowed to invest in Taiwan, he said.
Corporations receiving more than NT$80 million in Chinese investment would have to present a compulsory annual report to the financial authorities, reports said.
In a related development, the government also announced rules for Chinese investment in real estate. Chinese citizens buying property in Taiwan would have to wait three years before they could sell it again, in a measure to prevent real estate speculation, said Fu Don-cheng, vice chairman at the Mainland Affairs Council. The time limit did only apply to residential property, not to offices or factories, he said.
As to the level of investment in any sector, the minimum required amount was set at US$200,000, Fu said. A Chinese company could bring over between two and seven staff members from China according to the level of investment, and their maximum stay was limited to one year.
The opposition Democratic Progressive Party sharply criticized the government decision. Former Straits Exchange Foundation Chairman Hung Chi-chang said Taiwan had no shortage of capital, so there was no need to make such haste.
What Taiwan lacked was a welcoming environment conducive to the manufacturing sector, he said, calling on the government to wait with the opening to investments from China until a domestic consensus was reached. The aim of attracting foreign investment was to obtain more advanced technology, but China had nothing advanced to offer, Hung said.
There were no official agreements on the opening of Taiwan to investments from China, Hung pointed out, only a joint communiqué released by negotiators from both sides at the end of the previous round of talks, in Nanjing last April.
Former opposition Democratic Progressive Party lawmaker Lin Cho-shui said the liberalization policy would pose a threat to national security, because Chinese companies investing in Taiwan would be able to influence elections by financing the candidates they liked.
DPP legislator William Lai wondered whether the government had made an evaluation report on the possible impact of the investments on Taiwan’s national security. He particularly criticized the opening of sensitive sectors such as airlines, finance and telecommunications, demanding special compensatory measures from the government.
Apart from posing a threat to national security, Chinese companies could also try and obtain key technologies from Taiwan or evade trade regulations, Lai said. He warned that Chinese enterprises should not be allowed to win seats on the boards of Taiwanese companies.
Lai also called for effective legislative supervision of the investment liberalization policy, a measure which the DPP was trying to get approved by the Legislative Yuan but which the Kuomintang was blocking.
DPP legislator Yeh Yi-jin said the government was relying too much on the Chinese economy. In addition, no Chinese enterprises were truly private, she said, but they all to some extent served the aims of the Communist Party, even when investing in Taiwan.


Updated : 2021-04-15 08:28 GMT+08:00