The easing of China investment rules is aimed at making Taiwan a global commercial hub and encouraging Taiwanese investors to repatriate their profits, the Mainland Affairs Council said yesterday.
By relaxing rules on China-bound investment, the government hopes to more effectively regulate capital flow across the Taiwan Strait, John Deng (
"We hope local investors will not take the relaxation of regulations as giving them carte blanche to move their businesses to China," Deng said.
Instead, he said, the government hopes Taiwanese firms will use tax breaks on profits earned in China as an opportunity to remit their profits back into the country.
More than 50,000 firms operating in China are owned by Taiwanese businessmen who have pumped an estimated US$60 billion into the giant Chinese market over the past decade, attracted by its cheap labor and land.
Deng said that the Cabinet on Wednesday, approved a draft law which would allow local firms who were denied approval to invest in China under the "no haste, be patient" policy the opportunity to submit new applications.
The draft law would also lift the ban on Chinese investments in local real estate.
"The proposed legal revision proves the government's sincerity and determination to translate the findings of the Economic Development Advisory Conference into public policy," Deng said.
Opposition politicians have voiced concerns that the series of reforms recommended by the recently concluded economic forum will prove to have been empty talk. Some reforms -- notably direct links with China -- require Beijing's cooperation if they are to materialize.
The main opposition KMT has pushed for a cross-party summit to help build a consensus among the politically divided populace.
Deng disputed the notion that the "small three links" had been useless, noting the policy has brought many Chinese tourists to the outpost island of Kinmen. The policy has also made possible direct mass sales of Kinmen wine in China, he said.
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