Government approves Hon Hai's China investment plan

Hon Hai Precision Industry Co (鴻海精密) won approval to invest US$100 million in China, one of the first such approvals after the government announced a tougher China stance earlier this month.

Hon Hai, the nation's largest electronics company, makes for products such as Apple Computer Inc's iPod. The company's plan to increase its investment in a computer case and peripheral factory in Shenzhen was approved by the Investment Commission under the Ministry of Economic Affairs.

The regulator made the announcement in a statement issued late on Monday on its Web site. Including Hon Hai's planned investment, the commission approved eight investment projects in China totaling US$226 million.

These investments include US$25 million by Formosa Chemicals and Fiber Corp (台灣化學纖維), a petrochemical maker controlled by billionaire Wang Yung-ching (王永慶) and US$23.8 million by Taiwan Life Insurance Co (台灣人壽), according to the statement.

The commission also approved four inbound investment applications by foreign or overseas Chinese investors worth US$553.4 million, it said in a statement on Monday.

The approvals come after President Chen Shui-bian (陳水扁) last Thursday named Su Tseng-chang (蘇貞昌) as his fifth premier in as many years to help execute tougher policies on relations with China.

The government had not granted permission to Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technologies Inc (茂德科技) because the review process still wasn't finished. Powerchip is the country's biggest maker of computer memory chips, while ProMOS is the third largest.

Chen on Jan. 1 said his administration's new mindset and course of action for cross-strait economic and trade policies was "active management, effective opening," rather than "active opening, effective management," practiced since 2001.

Adopting a more proactive approach to managing economic relations with China would reduce the risk of liberalization in relations, Chen said.