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China restrictions eased

The government has further lossened restrictions on investing directly in China, lifting the ban on 68 categories in the service industry, including civil air transport, oil products, retailing, legal services and real-estate brokering.

The change may improve overall economic integration across the Taiwan Strait by legalizing the operations of Taiwanese ventures already invested in China.

The Ministry of Economic Affairs made the announcement on Monday, saying the adjustment was in line with the government's policy of "active opening, effective management" for investments in China.

Sectors now open to direct investment include the wholesale of oil products, retail operations, legal and accounting services, civil air transport, travel agencies, engineering, warehousing and freight transport, taxi services, restaurants and hotels, mining for energy resources, real-estate brokering, publishing, advertising, broadcasting and film-making.

Bans on major infrastructure projects such as railroads, airports, water-treatment systems, harbor construction, mass rapid-transit systems, power transmission and distribution systems will remain in place, the ministry said.

The restriction on investments in China's postal-service sector was changed from a case-by-case approval basis to an outright ban.

Investment in the development of industrial parks, construction of incinerators and power plants, telecommunications and integrated-circuit design remains off limits as the government continues its review of these areas.

Despite the restrictions, an estimated 40,000 Taiwanese ventures have already set up operations in China, investing around US$100 billion.

The "active opening, effective management" concept was a product of the Economic Development Advisory Conference (經發會) held by the government last year in an attempt to garner bipartisan input and support for the Chen Shui-bian (陳水扁) administration's economic policies.

The government announced that semiconductor manufacturers could begin submitting applications to invest in China just last week.

The changes represent a move toward greater economic integration with China.

Eager to take advantage of the new rules, Ho Tung Chemical Corp (和桐) is reportedly in discussions with the Chinese Tianjin Oil Products Co (天津中燃公司) about forming a business partnership to store and retail oil products in Tianjin, Shanghai and Beijing.

At the end of 2000, Tianjin Oil owned 13 oil storage depots and 570 service stations -- of which 340 are operated by Tianjin.
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