Sat, Jan 14, 2006 - Page 10 News List

Keep investment cap: Lee

CAUTION NEEDED The former president warned that Taiwan's industries would be hollowed out if the restriction on local companies' China investments was relaxed

CNA , TAIPEI

Former president Lee Teng-hui (李登輝) pointed out yesterday that there will be a hollowing out of Taiwan's industries if the current restriction on local companies investing more than 40 percent of their capital in China is relaxed.

Lee made the remarks while addressing the annual conference of the Taiwan Industrial Technology Association.

He said that there is no need to convene another national economic development conference, which is being planned by the government, because the businesses participating in such a conference will definitely ask for an easing of the restriction, adding that if it is relaxed, there will inevitably be a hollowing out of Taiwan's industries.

Lee noted that some of Taiwan's traditional sectors that shifted to China in earlier years are no longer able to compete in China and that they should return to Taiwan to upgrade themselves through automation. The government should provide them with the opportunity to do so, he added.

The former president also said direct cross-strait links are possible if the two sides have "state-to-state" relations. Taiwan can have exchanges with China in the fields of culture, information and history so that Chinese officials will have a better understanding of the situation in Taiwan.

However, because of China's relentless obstruction, it is not suitable to talk about direct cross-strait links at the present time, he added.

As China has not renounced the option of the use of force against Taiwan, businesses don't necessarily have to go to China if they want to reach out to the world, Lee said, adding that they could instead choose Japan, the US or Europe.

Meanwhile, at a time when intense competition has led Taiwan's information and semiconductor sectors into an era of "micro profits," he observed that the focus should be shifted to the optoelectronic sector, suggesting that the government provide tax and subsidy incentives to the industry based on its policy of assisting high-tech industries for the sake of building Taiwan's competitiveness.

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