Wed, Sep 16, 2009 - Page 12 News List

PRC growth measures working, group says

By Crystal Hsu  /  STAFF REPORTER

The investment environment in China decreased while investment risks fell this year because of Beijing’s efforts to accelerate economic growth in the wake of the global slowdown, an annual report by a local trade group said.

The report, produced by the Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA, 台灣電子電機公會), predicted the improving environment would set off a wave of China-bound investment to tap into the country’s huge domestic market.

Leu Horng-der (呂鴻德), a business administration professor at Chuang Yuan Christian University who headed the research, said the macroeconomic environment in China had returned to its 2005 level after Beijing pumped in huge funds to strengthen infrastructure and encourage industrial upgrades.

The finding, based on a survey of 2,588 Taiwanese firms with investments in China, is consistent with the trend of economic development there, Leu said.

“China is expected to post GDP growth above 7 percent this year, although its exports remain weak compared with the pre-crisis level,” Leu said.

The number of cross-strait trade disputes stands at 2,839 so far this year, down from 3,506 last year, the report said.

It said a comprehensive moderation mechanism is still needed although it recognized China’s past efforts to address the issue.

Of all Chinese cities, Taiwanese businesspeople named Kunshan in Jiangsu Province as their favorite investment destination because of its proximity to Shanghai and friendly policies.

Leu said the city’s government valued industrial upgrades and offered assorted funds and tax preferences for branding, research and development. Last year, Kunshan’s GDP totalled 150 billion yuan (US$22 billion), an increase of 15 percent from 2007, the report said.

Jiangning and the Suzhou industrial zone were second only to Kunshan as preferred locations, while Lanzhou in Gansu Province is the least-favored investment destination, followed by Harbin in Heilongjiang Province, the report said.

Meanwhile, Taiwanese businesspeople in China want greater cross-strait corporate cooperation, saying this could enhance bilateral efficiency and competitiveness while lowering costs and risks, the report said.

To that end, Leu said governments on both sides of the Strait should facilitate the inking of an economic cooperation framework agreement and set up a mechanism for regular economic dialogue.

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