Mon, Feb 28, 2011 - Page 11 News List

Government to relax limits on Chinese investment in high-tech industries

Staff writer, with AFP and CNA

Taiwan is set to relax controls on investments from China in high-tech companies, media reports said yesterday, citing information from Ministry of Economic Affairs officials.

Chinese companies will be allowed to own up to a 10 percent share in Taiwanese semiconductor and flat-panel manufacturers, the Central News Agency (CNA) reported.

The semiconductor industry includes wafer foundry service providers such as Taiwan Semiconductor Manufacturing Co (台積電) and those of DRAM chip makers like Powerchip Technology Corp (力晶科技).


Chinese firms will also be allowed to own up to a 20 percent share in the less-sensitive tech sectors such as mechanical and metallurgical industries, as well as the medical equipment industry, CNA reported.

Chinese companies will also be permitted to set up joint ventures with Taiwanese technology firms, with shares capped at 49 percent in such ventures, CNA said.

“The proposal to ease the restrictions on investments by Chinese businesses have been approved by the Executive Yuan,” Vice Minister of Economic Affairs Lin Sheng-chung (林聖忠) told Agence France-Presse.

“It is due to be announced in the next few days,” Lin said, declining to provide details.


Local flat-panel makers such as AU Optronics Corp (友達光電) and Chimei Innolux Corp (奇美電子) have long urged the government to relax investment restrictions on Chinese investors, since they believe improving cross-strait cooperation will help them benefit from China’s fast-growing TV market.

In February last year, the government eased restrictions on local panel makers wishing to build next-generation plants in China.

The Investment Commission on Dec. 17 approved AU Optronics’ planned US$3 billion investment to set up a 7.5-generation fab in Kunshan, China.

The government partially lifted its decades-old ban on investment in the country by Chinese investors in June 2009 and Taipei and Beijing signed the Economic Cooperation Framework Agreement last June.


However, accumulated Chinese investment streams to Taiwan are less than one-thousandth of the money going in the other direction, a situation that Association for Relations Across the Taiwan Strait Chairman Chen Yunlin (陳雲林) told an investment forum in Taiwan last week was “no good.”

Based on the commission’s data, as of December Chinese firms had made 102 investments in Taiwan worth US$131.83 million

Taiwanese businesses have funneled an estimated US$150 billion to China since the government eased controls on China-bound investment in 1991, local media have said.

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