Tue, Jan 10, 2006 - Page 10 News List

`Active management' to use US export limits as model

CROSS-STRAIT POLICY The Ministry of Economic Affairs said it will use US controls on high-tech exports as a reference when designing policy on investing in China

CNA , TAIPEI

In response to President Chen Shui-bian's (陳水扁) New Year address, the Ministry of Economic Affairs said yesterday it will refer to the US' control of high-tech exports to implement Chen's "active management" policy.

With regard to Taiwan's economic exchanges with China, the president pledged to change his previous policy of "active opening, effective management" to "active management, effective opening" as he feels Taiwan's economic reliance on China has grown to a worrying degree.

In a report to the legislature's Economics and Energy Committee, the ministry listed several measures to realize Chen's policy goals, including screening items in investment projects and tracing the progress of the projects, as well as punishing investors who have violated government rules while investing in China.

When evaluating whether or not to allow certain items to be produced in China, the ministry will use US government procedures for controlling the exports of sophisticated technology and high-tech products as its model, according to the report.

Before deciding whether to give a green light to an investment project, the ministry will make sure the applicant company has made "equivalent" investment in Taiwan, the report said. The ministry will also check the company's global investments and its contribution to Taiwan's economy.

For Taiwanese corporations that have been permitted to invest in China, the government will monitor its implementation of the investment project, checking its total remittance of funds to China and the items being manufactured in China.

In connection with this, the Financial Supervisory Commission and other government agencies will step up monitoring and auditing of Taiwanese companies investing in China that are also listed on the Taiwan Stock Exchange.

Should the total value of a Taiwanese company's China investment exceed 40 percent of its capital as a result of stock market fluctuations, for example, the company will be required to increase investments in Taiwan to raise its capitalization, the ministry said.

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