Wed, Feb 14, 2007 - Page 12 News List

Foreign companies urge further policy relaxation

By Jackie Lin  /  STAFF REPORTER

To compete with its fast-rising Asian neighbors, the government should speed up policy deregulation and embrace liberalization, representatives of Taiwan-based foreign businesses said yesterday.

"Taiwan should not impose curbs on foreign trade as investors are in the best position to assess the risks. Regulators need not bother with restrictions because that would keep them occupied and mean they fail to keep up with other developments," said Jane Hwang (黃素貞), president of the American Chamber of Commerce in Taipei (AmCham), which represents more than 500 US firms in Taiwan.

She made the comments during a forum held by the National Policy Foundation, a think tank affiliated with the Chinese Nationalist Party (KMT).

Hwang was referring to the government's regulatory ceiling that caps China-bound investment at a maximum of 40 percent of a Taiwanese firms' net value, as well as other restrictions against institutional investors.

Although the 40-percent rule has resulted in many enterprises relocating to China, the government -- citing national security concerns -- still insists on the ruling.

Hwang, who serves as vice president and general manager of the State Street Bank and Trust Co's Taipei office, also expressed concern at the government's inaction on the huge retirement pension market.

"The big pool of pension capital will become a key engine to drive imports of new financial products in the future. It will also lure international wealth management firms to explore the market's potential," she said.

A pension bill failed to clear the legislature in the most recent session, something Hwang said had seriously hindered the potential for the maximization of public wealth.

Statistics show that private sector businesses set aside 6 percent of the salaries of more than 5 million employees per month for their retirement pension funds. The capital is deposited in banks, but the market's weak financing demands cannot produce favorable returns, Hwang said.

Guy Wittich, chief executive officer of the European Chamber of Commerce Taipei (ECCT), urged the government to normalize cross-strait trade and launch direct cargo flights with China.

He said the ECCT, which represents 640 firms, would also lobby the government to reform the tax climate, especially since Hong Kong and Singapore were considering slashing taxes.

The Ministry of Economic Affairs and the Ministry of Finance hold wildly contrasting positions, Wittich said. He said the economics ministry is eager to attract investment, but the finance ministry is considering raising taxes to increase revenues.

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