Wed, Jul 04, 2001 page17

• Top secret report sets off alarms in the tech sector

  • By Dan Nystedt / STAFF REPORTER
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  The government should use all means at its disposal to stem the flow of high-tech investment to China, according to a report out of the National Security Bureau (國安局), Taiwan's equivalent of the Central Intelligence Agency of the US.

  The Bureau issued an analysis of their conclusion in a top secret report titled, An Analysis on how the Chinese Communist Party Attracts Taiwanese High Tech Investment for the Suzhou Industrial Park.

  According to Chinese-language media, the report implores government officials to curb high-tech investment, saying 74 Taiwan tech firms have already invested NT$20 billion (US$841 million) in the Suzhou (蘇州) Park, which sits just outside of Shanghai.

  One official said the report emphasizes high-tech firms due to fears that once they are heavily invested, these firms will become political puppets of Beijing.

  "The `no haste, be patient' investment policy has nothing to do with the small and medium-sized companies in Taiwan, only with big investors," said a government official on condition of anonymity.

  Formosa Plastics Group Chair-man Wang Yung-ching (王永慶) is a prime example. On public television last week, he implored people in Taiwan to "calmly accept the `one China' principle," while repeating his call to lift all curbs on investment across the Strait.

  The "no haste" policy stopped Wang from investing US$6 billion in 1992 to build a chemical complex in China's Fujian Province.

  Laws in Taiwan currently limit single investments to only US$50 million for China-bound projects, and ban certain high-tech investments and infrastructure projects. These measures have had little effect on companies who skirt the law by setting up holding companies and transferring investment money directly from overseas accounts into China.

  Last year, China's information technology production value topped US$25.5 billion, beating Taiwan for the first time, with Taiwanese firms based in China accounting for an estimated 72 percent of that figure.

  "I think people are really getting too emotional about [this issue] because nobody, including the government, is sitting down to discuss this matter rationally. How much money has gone over to China? How much impact will it have on industry here? You have to go over it sector by sector, item by item and ask the businessmen who intend to go or have already gone to talk about this issue in front of the public," said Andrew Yang (楊念祖), an analyst at the Chinese Center for Advanced Policy Studies in Taipei.

  According to the National Security Bureau report, officials in Suzhou are actively developing industry "clusters" which include the entire spectrum of each industry. From downstream component makers like computer motherboard and monitor producers to PC cases and mouse makers, China has slowly won over the computer industry.

  Now, Chinese officials are targeting the semiconductor industry, and have won a few victories with investments pledged by Winston Wang (王文洋), son of the Formosa Plastics chairman and a semiconductor foundry set up by Richard Chang (張汝京), former director of Worldwide Semiconductor Corp (世大半導體).
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