Tue, May 03, 2011 - Page 12 News List

China’s BOE mulls investment in Taiwan

By Jason Tan  /  Staff reporter

Barely two months after Taiwan relaxed a ban and allowed Chinese firms to invest in Taiwanese flat-panel makers, China’s largest panel maker, BOE Technology Group Co (京東方), has shown an interest in such a strategic partnership.

BOE lauded Taiwanese flat-panel makers’ manufacturing technologies, but at the same time complained about the long time the government took to decide to open up the flat-panel industry, Tsai Lien-sheng (蔡練生), secretary-general of the Taipei-based Chinese National Federation of Industries (全國工業總會), told the Central News Agency on Sunday.

BOE did not say whether it wanted to work with AU Optronics Corp (友達光電) or Chimei Innolux Corp (奇美電子), Tsai was quoted as saying.

BOE has enjoyed a good rapport with its Taiwanese counterparts. Last year, it acquired the computer monitor and television operations of Taiwan-based Jean Co (美齊).

Tsai made the remarks after returning from a five-day trip to China on Friday, as part of the government’s efforts to solicit possible investment opportunities from Chinese firms in Taiwan.

Taiwan opened up 42 sectors, including panels and semiconductors, in the second wave of opening up to Chinese companies, which started on March 7. The first wave of liberalization began in 2009.

However, certain prerequisites have to be fulfilled under the liberalization scheme: the investments must be a complementary strategic collaboration in the cross-strait supply chain and Chinese investors must not have the control over their Taiwanese partners, according to the Ministry of Economic Affairs.

Other conditions include Chinese companies holding a stake of no more than 10 percent of local firms and Chinese stakes must be less than 50 percent if they decide to form a joint venture with a Taiwanese firm.

The above rules apply to five of Taiwan’s critical sectors — namely chip manufacturers, chip packagers and testers, LCD panels and related component makers, tool and machinery producers as well as electronics equipment makers.

The government also opened up other less critical sectors — spanning the manufacturing, services and public construction industries to Chinese investments.

In the middle of 2009, the government lifted a ban and allowed Chinese investors to invest in selected sectors such as textiles, plastics and handsets, marking the first time Chinese capital could gain access to Taiwanese companies.

The first wave of opening -consisted of 205 sectors and altogether Taiwan has opened 247 sectors to China, including the newly announced second wave.

The Chinese-language Economic Daily News yesterday reported that aside from BOE, two other Chinese enterprises had also expressed an interest in investing in Taiwan.

They are Beijing Jingkelong Co (北京京客隆商業), which operates 76 supermarkets, eight hypermarkets and two department stores in China, and China General Technology (Group) Holding Ltd (中國通用技術), a conglomerate with interests which span pharmaceuticals, construction, real estate and industrial equipment manufacturing.

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