MAC, Cabinet to work on links

Officials at the Mainland Affairs Council (MAC, 陸委會) said yesterday they will work with other Cabinet offices in revising the current China-bound investment policies and small direct three links with China, considering both the nation's developing economy and cross-strait relations.

"We are ultimately working toward the same goals as the Ministry of Economic Affairs of increasing the gross domestic product, while also maintaining the independence of local industries in order to avoid their over reliance on the Chinese market," said John Deng (鄧振中), vice chairman of the MAC. Deng denied media reports that indicated the MAC has been conservatively pulling back the recently proposed lift of restrictions on capital investment and sectors in China made by Ministry of Economic Affairs (MOEA, 經濟部).

Officials from the MAC, Ministry of Economic Affairs and the Council for Economic Planning and Development (CEPD, 經建會) have recently discussed revising the "go slow, be patient " policy that restricted capital ceilings and sectors of Taiwanese investment in China.

Tsai Ying-wen (蔡英文), chairperson of the MAC, had recently said that the government would gradually adjust such policies based on consideration of industries' prioritized demands to integrate Chinese markets and resources as part of their global strategic development plans.

However, Tsai did not give specific commitments yesterday regarding demands levied by the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA, 台灣區電機電子工業同業公會), the island's top high-tech industry organization. The TEEMA delega-tion, led by chairman Richard Wu (吳思鍾), met with Tsai yesterday and urged the MAC and other authorities to open direct links with China, thereby eliminating the need for trade to go through Hong Kong.

Wu added that members of his association need a clear cross-strait policy under which to plan strategies for investment and trade in China. The association currently represents over 4,600 companies in fields ranging from semiconductors to telecommunications equipment and information technology.

Wu urged the government to speed up the lifting of the ban on "three links" with China -- trade, transport and communications -- pointing out that the nation's businesses could save a great deal of money each year.

According to officials from the MOEA's Investment Commission (投審會), electronics investment in China skyrocketed from 14 percent of all China-bound capital in 1999, to 64 percent this year.

Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電), said earlier that the policies of the two-month old government of President Chen Shui-bian (陳水扁) had caused great anxiety within the island's high-tech industry. He specifically opposed the government's plans to rethink a tax loophole on grants of shares to company employees.

Additionally, he said he favored relaxing the rules on Taiwanese investment in China and the use of stock options as compensation.

In response to media concerns, Deng suggested that the detailed policies of small direct three links and the "go slow, be patient" policies might be finalized by the end of September. The new policies will be based on studies by the MAC, MOEA, CEPD, central bank and Ministry of Finance, with the Cabinet having final approval.