Sat, Nov 24, 2001 - Page 17 News List

Government opens local property to China investment

BLOOMBERG , TAIPEI

Taiwan will allow companies from China to invest directly in local property as it opens its recession-ridden economy to China for the first time as part of its entry into the WTO.

"We'll consider opening all sectors of the services industry to Chinese investment, under the framework of the WTO," said James Chou (周慶生), deputy director of the economics department at the Mainland Affairs Council. "Cross-strait links are a little complicated, so we'll need to assess each [sector] before opening it to investment.

The council, a government arm that overseas relations with China, said the opening will come in phases, with real estate first, followed by services and manufacturing, then securities.

Taiwan has been closed to direct investment from China for 50 years. Both will join the WTO next month.

Earlier this month, Taiwan scrapped a US$50 million limit on investment in China and approved other measures allowing Taiwanese businesses to tap China's faster growth. Taiwanese companies already have invested about US$100 billion in China, according to CLSA Ltd research.

Taiwan fell into recession in the third quarter, after the economy contracted at its fastest pace in 26 years amid declining electronics exports. If the economy shrinks for the full year, it will be the nation's first recession on record.

Many Taiwanese favor opening the country to Chinese investment, according to a telephone survey conducted Nov. 13 to Nov. 15 by the Cabinet-level Research, Development and Evaluation Commission (研考會).

More than half of the 1,091 Taiwanese interviewed said that they favor the policy, and 52 percent said it would improve cross-Strait relations, the poll said.

Taiwan is also poised to announce that it will allow tourists from China to visit the country for the first time.

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