Tue, Mar 09, 2010 - Page 12 News List

More Chinese investment mulled

LIBERALS NEEDED The Minister of Economic Affairs said there were many ways Taiwan could attract overseas firms to set up their regional headquarters

By Jason Tan  /  STAFF REPORTER

The government is mulling the possibility of opening up more sectors, including those in the manufacturing and services industries, to Chinese investors, but a timeframe has yet to be set, Minister of Economic Affairs Shih Yen-shiang (施顏祥) said yesterday.

“Related government agencies are currently studying the feasibility of the policy, but the opening of such sectors must benefit Taiwan’s companies,” Shih told the legislature’s economics committee.

In June, the government finally allowed Chinese investors to invest in selected sectors in Taiwan, marking the first time Chinese capital has been granted access to the local market.

Shih did not want to set a timetable for the second-stage opening, but said it would include more manufacturing and service sectors.

Chinese investors have poured NT$2.2 billion (US$66.7 million) into Taiwan by last month, an amount Chinese Nationalist Party (KMT) Legislator Ting Shou-chung (丁守中) said highlighted the “imbalance in cross-strait investment, as Taiwan has injected as much as NT$200 billion” in China over the past two decades.

Shih said the first-stage opening served as an experiment and the government was planning to open up more sectors for Chinese investment.

Legislators also questioned the competitiveness of Taiwanese flat-panel manufacturers, especially after Japanese and South Korean rivals announced plans to set up 8.5-generation facilities in China.

Taiwan late last month gave the much-awaited green light to local panel makers to set up facilities in China, but only on condition that their plants at home remain one generation ahead of those in China.

That means AU Optronics Corp, Taiwan’s largest manufacturer of liquid-crystal-display panels, which has an 8.5-generation plant on its home turf, will only be permitted to set up 7.5-generation facilities across the Strait.

Shih said the regulation was the result of talks between the ministry and panel makers.

He said panel facilities more advanced than 6-generation plants were considered new technology and the new rule should not undermine the competitiveness of Taiwanese panel makers in China.

“Panel makers already have plans to set up 10-generation plants locally, so they will be able to set up more advanced plants in China in the future,” Shih said.

Meanwhile, the minister said the government has continued to try to attract international ­enterprises to set up regional headquarters in Taiwan.

Dishing out tax incentives to foreign companies such as a low flat business income tax would be one way to draw overseas firms, but it isn’t the only method, he said.

“Taiwan’s economy must be more liberal,” Shih said. “The signing of an ECFA [economic cooperation framework agreement] and FTAs [free-trade agreements] would increase Taiwan’s attractiveness.”

The second round of ECFA negotiations with Beijing is scheduled for next week and the pact is expected to be inked in May, when the fifth round of cross-strait high-level talks takes place.

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