No plan to loosen China investment limits: Hsieh

Premier Frank Hsieh (謝長廷) said yesterday that the government has no plans to ease controls on Taiwanese manufacturers' investments in China.

Hsieh made the remarks in response to a question from Chinese Nationalist Party (KMT) Legislator Lee Chuan-chiao (李全教), who asked the premier whether the Financial Supervisory Commission (FSC) had proposed to the Executive Yuan that the current 40 percent ceiling on China-bound investment be revoked.

CRiticism

According to media reports, several manufacturers have criticized the regulation that the amount of China-bound investment by Taiwan manufacturers should not surpass 40 percent of the net worth of their parent companies.

FSC Chairman Kong Jaw-sheng (龔照勝) has reportedly lodged a proposal with the Cabinet that the government should abolish the 40 percent ceiling.

The current investment ceiling is set up to prevent Chinese operations from negatively affecting parent companies in Taiwan, according to Deputy Minister of Economic Affairs Steve Chen (陳瑞隆).

At present, Taiwanese firms with net worth of below NT$5.0 billion (US$148.8 million) are allowed to invest up to 40 percent of net worth in China.

Cumulative China-bound investments for Taiwanese companies with net worth of NT$5 billion to NT$10 billion are capped at 30 percent of net worth, while the ceiling is set at 20 percent for companies with net worth of over NT$10 billion, according to the ministry's Investment Commission.

China replaced the US as Taiwan's largest market in November 2002, despite mounting political tensions between them.

China is also Taiwan's leading foreign investment destination, with an estimated US$80 billion invested over the years in various projects.

Tourism

Lee also asked Hsieh about the possibility of opening Taiwan to Chinese tourists in March, to which the premier responded that it will depend on the progress in cross-strait negotiations. He also reiterated that opening up to Chinese tourists is an established government policy.

Hsieh announced in May that the government would allow as many as 1,000 tourists per day from China to come to Taiwan for sightseeing.

In the past, only Chinese living abroad or coming from a third country or area were permitted to visit Taiwan. But China has so far failed to add Taiwan to its list of approved overseas travel destinations.

In the face of the daily ceiling on visitors imposed by Taiwan, Chinese tour operators suggested that their Taiwanese counterparts design high-end tours for Chinese tourists.