Tue, Dec 21, 2004 - Page 10 News List

Businesses wary over China's law

UNCERTAINTY Stocks fell yesterday amid concerns over China's proposed anti-secession law, with business leaders saying confidence was affected

By Joyce Huang  /  STAFF REPORTER

In reaction to Beijing's move to initiate an anti-secession law, China-based Taiwanese businessmen feel they are walking a tightrope, trying to keep their balance amid the ups and downs of cross-strait relations, local business leaders said yesterday.

"Feeling at sea, many [China-based Taiwanese business people] are pretty upset, wondering how relations of two nations that are so close could get so tense," Jason Fong (馮志良), deputy secretary general of the Chinese National Federation of Industries (工總), said yesterday.

Although China has not yet disclosed the content of the legislation, the development has had a negative impact on business confidence across the Taiwan Strait, Fong said.

The proposed law is seen as being directed at Taiwan, possibly giving China a legal pretext to attack.

The TAIEX tumbled nearly 100 points early yesterday on concerns about the law. But the benchmark index pared losses after China's President Hu Jintao (胡錦濤) failed to comment on the proposed legislation. Media had reported last week that Hu would likely speak about the law during a visit to Macau yesterday.

The TAIEX fell 23.38 points yesterday, or 0.39 percent, to close at 5985.94 points, with trading volume of NT$57 billion. Foreign investors bought a net NT$4.3 billion worth of Taiwan's stocks yesterday.

The rebound in the TAIEX also helped the New Taiwan dollar to reduce its losses. The NT dollar weakened NT$0.048, or 0.1 percent, to close at NT$32.408 against its US counterpart on the Taipei foreign exchange market, after sliding as much as 0.3 percent.

Fong said the local business community was temporarily relieved that Hu hadn't spoken out strongly about Taiwan's rising nationalism. But he expressed concern that China's hawkish stance may be permanently etched into the bill, which could damage cross-strait trade relations.

But Theodore Huang (黃茂雄), chairman of the Chinese National Association of Industry and Commerce (工商協進會), yesterday downplayed the legislation's impact, saying "it's too early to jump to any conclusion."

"The local bourse has overreacted to it [the legislation]," Huang said. "Long-term [China-bound] investments are unlikely to change course as a result of one single message or policy."

Huang made the remarks following a monthly breakfast meeting with government officials yesterday. He said that China, despite its political stance, has always rolled out the red carpet to lure business from Taiwan.

But the association will keep an eye on the bill's future development before coming up with any contingency plans, he said.

When asked if China will make things more difficult for pro-DPP businesses, or so-called "green enterprises," he shrugged off any distinction for businesses in China.

"We're all golden -- we're gold diggers who want to make a fortune in China," he joked.

While Hu didn't make any comments about the legislation, others thought there was work to be done.

“Both sides of the Strait should work harder to maintain peace and stability,” said Luo Huai-jia (羅懷家), executive director of the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA, 電電公會), yesterday.

Chen Cheng-yi (陳正毅), spokesman for the General Chamber of Commerce (全國商總), further warned that Beijing's unfriendly gesture may trigger counter-moves in Taiwan.

“People [including business people] in Taiwan may become antagonized by such a desperate move from China,” Chen said, urging both governments to remain flexible in their cross-strait policies.

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