The head of the Mainland Affairs Council confirmed media speculation on Thursday that its China-bound investment policy will be adjusted in accordance with the finding of the cross-party economic advisory council (經發會).
"The `no haste, be patient' (
Analysts said that if Taiwan could deregulate its investment policy toward China, it could certainly bring back investors confidence, both internationally and locally.
"Since many high-tech companies are going to invest in China in the near future and their investment is usually quite high, the current US$50 million ceiling under the `no haste' policy has to be changed to provide more flexibility," said Tsai in a conference to legislators' aides on Taiwan's China policy.
"The review of the `no haste, be patient' policy has reached its final stage. The Mainland Affairs Council has already completed its proposals for the change and a final decision will be made in accordance with the finding of the economic advisory council," Tsai said.
The economic advisory council will meet in the next few weeks and is expected to reach a conclusion in the general meeting of the council Aug. 24 through Aug. 26.
Currently, the administration stipulates that any single investment made by a local company can not exceed US$50 million, unless approved by the administration under special circumstances. However, no exception has ever been made.
According to local media reports, when the Ministry of Economic Affairs reviewed the `no haste' policy at the beginning of this year, it considered raising the US$50 million ceiling as an alternative way of amending the policy.
The reason for the review was that an increasing number of companies are approaching the US$50 million ceiling.
Following the first steering committee meeting of the economic advisory council, held last Sunday, some speculated that the administration plans to utilize the the advisory council's findings to adjust its mainland investment policy.
Major political parties, including the KMT and New Party, strongly proposed changes in the `no haste' policy in the preparatory meeting of the economic advisory council.
"If Taiwan were to abandon its current China investment policy, or the `no haste' policy, completely, foreign investors would feel more confident investing in Taiwan's stock mar-ket," said Linda Lu (呂美瑩), director and general manager of Baring Securities Consulting Enterprise (Taiwan).
"Any barrier to international investment is frowned upon by international fund managers."
Another local fund manager agrees with Lu's point of view.
"Abandoning the `no haste' policy would liberalize trade and investment across the strait. Since most of Taiwan's businessmen and listed companies already have substantial investments in China, the move [on policy changes] would certainly be welcomed by local businessmen and securities investors," said Larry Liao (廖瑞雄), a fund manager of ING-CHB Securities Investment Trust.
"Removing the ceiling would not have a profound affect on the investment behavior of local companies, but would more importantly change the policy direction [of the DPP administration]," Liao said.
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