Pundits yesterday welcomed the government's plan to relax restrictions on foreign investment in the nation's infrastructure-development sector, but said that regulations will need to first be liberalized.
"[The plan to relax foreign investment restrictions] not only injects more capital, but also foreign expertise," said Peter Kurz, founder of the financial consulting company Mr. Taiwan.com.
"But the problem is that these areas are not sufficiently liberalized for foreigners -- even for local operators -- since they are still running in an overly regulated environment."
In addition to relaxing foreign ownership limits, Kurz added that the government needs to make the nation's yet-to-be-opened sectors -- including telecommunications, broadcasting and transportation -- more competitive so as to attract foreign capital.
Kurz made the comments in response to a Council for Economic Planning and Development's (
The council has proposed raising the ceiling on direct foreign ownership in the nation's mining, energy, telecommunications, air transportation, banking and cable television sectors. If passed, the council will finalize the new ceilings by March next year before forwarding the proposal for legislative approval by September.
The council, however, will continue to forbid foreign ownership in deep-sea oil exploration and the postal and broadcasting sectors.
Charles Wu (
"Even if the media is fully owned by foreign capitalists, local management teams are still needed to run the organizations, which prevents foreign manipulation," Wu said.
Separation between ownership and management is inevitable since local media is too open to be manipulated, he said.
Following the nation's accession to WTO, he said that it has been an inevitable trend to bring in foreign capital and expertise to develop the media sector.
Wu said that 32 percent of Eastern's shares are directly or indirectly owned by foreign investors, some of whom expressed interest in buying over 51 percent of the company's shares.
"Foreign investors are very much interested in Taiwan's media markets since local audiences are highly educated and have high incomes," Wu said.
Giving his endorsement to the government's move, a manager from the Sun Ba Power Corp (森霸電力), an independent power producer, however, yesterday said that foreign investors are gradually losing interest in putting down investments in the power supply business although the new policy will help expand the company's financing channels.
In light of increasing China-bound investments, the manager, surnamed Chu, said that the nation's demand for electricity has dropped, making power suppliers less profitable than they used to be.
He said that less than 20 percent of Sun Ba's shares are owned by foreign investors, who are restricted to owning a limit of 50 percent of any local venture.
Sun Ba is scheduled to start the commercial operation of a natural gas-fueled power plant in Tainan in April 2004.
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