Investment restrictions to be relaxed

The government plans to make it easier for Taiwanese companies with large investments in China to list their shares on the Taipei stock market, part of a deal to encourage them to boost investment in the nation, news reports said yesterday.

Current law prohibits Tai-wanese companies from raising money by listing their shares in Taiwan if they have invested more than 40 percent of their total net worth in China.

But the government will relax the restriction if companies agree to use the money raised in the stock market to invest in Taiwan, a Chinese-language newspaper quoted Premier Yu Shyi-kun as saying at a meeting with China-based Taiwanese businesspeople.

"The funds they raise in Taiwan must be used here, not for expanding their mainland operations," another paper quoted Minister of Finance Lin Chuan (林全) as saying.

Lin said that the deal was aimed at getting Taiwanese companies with operations in China to produce higher-value-added goods in Taiwan. Details of the plan have yet to be finalized, the reports said.

Taiwanese companies have invested more than US$100 billion in China to take advantage of that country's cheap labor and get a share of its huge market.

The capital outflow began in the late 1980s when Taiwan ended a ban on travel and commercial ties with China.