Mix of caution and support urged in China investments

The legislative caucus of the Democratic Progressive Party (DPP) said yesterday that before a new system for screening China-bound investment goes into effect, the Cabinet should work out a set of supporting measures.

DPP legislative caucus whip Chen Chin-jun (陳景峻) made the remarks at the legislature after the Cabinet made public its "active management and effective opening" rules on Wednesday, focusing on the government's role as a "risk manager" in growing cross-strait economic and trade exchanges.

Under the new regulations, major investment projects by Taiwanese enterprises in China -- particularly those involving "sensitive" high technologies -- will be carefully screened by the Ministry of Economic Affairs, while investors or managers will be asked to brief government officials during the screening process.

Relevant supporting measures, such as speeding up an industrial upgrade, should be implemented in conjunction with the new China policy so that manufacturers will keep their operations in Taiwan, Chen said.

The lawmaker also warned that domestic manufacturers' China-bound investments will be driven "underground" and business owners will not repatriate their money back to Taiwan if the government imposes strict controls on investment in China without putting in place the necessary supporting measures.

The new policy was designed to replace the old one of "active opening, effective management" which was adopted under a consensus reached at the 2001 Economic Development Advisory Conference.