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Chinese barred from insurance industry: MOEA

Minister of Economic Affairs Shih Yen-shiang (施顏祥) yesterday reiterated the government’s ban on Chinese investment in the local insurance industry.

“We will follow the regulations to see if there is any Chinese capital involved and if the amount is over the limit,” Shih said at a legislative question-and-answer session in response to questions about a foreign consortium’s takeover of Nan Shan Life Insurance Co (南山人壽).

On Tuesday, a consortium led by Primus Financial Holdings Ltd and Hong Kong-based China Strategic Holdings Ltd (中策集團) said it would acquire American International Group Inc’s (AIG) 97.57 percent stake in Nan Shan Life Insurance for US$2.15 billion.

The deal has raised concerns that China-sourced funds may be involved.

Shih said Chinese companies cannot invest directly in Taiwan’s financial or insurance companies because this sector is not open to Chinese investment, although Chinese funds funneled through a third party and not in excess of 30 percent of the total investment are allowed.

An investment would be banned if a Chinese company was found to have great influence on the investing party, he said.

Starting in July, Chinese companies and investors have been allowed to submit investment proposals to the government when a total of 100 sectors in the manufacturing, service and infrastructure industries opened to Chinese investment.

In response to legislators’ questions about the proposed economic cooperation framework agreement (ECFA) between Taiwan and China, Shih said both sides hope to sign the agreement next spring, but “the earlier, the better.”

A fourth round of non-official negotiations with Chinese authorities will be held later this month, the minister said, adding that Taiwan has made clear there will be no more opening to China in the agriculture sector or to Taiwan’s job market for Chinese labor.

The early harvest list has not been finalized, but will not surpass 1,000 items, Shih said.

Shih also discussed Taiwan Memory Co (TMC, 台灣創新記憶體公司), which is government sponsored, after some legislators wondered if the company could turn into a second Taiwan High Speed Rail Corp (台灣高鐵), which has incurred huge losses.

Shih said that TMC’s funding application was still pending government approval. The company has requested up to NT$5 billion (US$155 million) from the government, Shih said, adding that the government would not provide more than NT$10 billion if the case is given a green light.

He said that the government had a clear strategy for revitalizing the local dynamic random access memory (DRAM) industry.

Companies must obtain core technologies and show commitment to remain rooted in Taiwan or they will not get government funding.

Shih said that TMC would be a private company and the government would hold less than a 50 percent stake in it.

Local chip packagers and testers Siliconware Precision Industries Co (矽品精密) and King Yuan Electronics Co Ltd (京元電子) have said they would invest in TMC, which aims to transfer technologies from Japanese partner Elpida Memories Inc.
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