A planned investment protection agreement between Taiwan and China that is to be signed into effect in upcoming cross-strait trade talks next week will not open Taiwan to more Chinese investments, the Ministry of Economic Affairs said in a statement on Wednesday.
The ministry said it issued the statement to defuse concerns that the planned cross-strait investment protection agreement would allow more Chinese investments and capital to enter the local market.
The ministry began negotiating with China over the issue of investment protection across the Taiwan Strait six months after the Economic Cooperation Framework Agreement (ECFA) took effect in September 2010, in a bid to ensure the rights of Taiwanese companies operating in China.
“The content of the planned investment protection agreement was based on the framework of international investment protection agreements in general,” the ministry said in the statement.
During the negotiations, special consideration was given to the peculiarity of the relationship between the two sides, the concerns of investors and the enforceability of the agreement, the ministry said.
While the ECFA stipulates that the two sides should gradually reduce barriers to bilateral investments, both sides have agreed to keep the issue of opening their markets at bay, while hammering out the investment protection agreement, according to the ministry.
A number of high-profile Taiwanese companies have recently became involved in disputes with their Chinese partners — the latest case being the Far Eastern Group (遠東集團), which operates Pacific Sogo Department Stores (太平洋崇光百貨) in Taiwan and China.
Because of disputes with landlords of two of its department stores in China, Far Eastern Group on July 1 urged the government to quicken the pace in signing an investment protection agreement with its Chinese counterpart to safeguard the rights of Taiwanese businesses in China.
Another case involves an enterprise owned by a Taiwanese company in Zhejiang Province, which warned on Thursday last week that it might suspend its business there in light of a dispute with its tenants.
Buynow (百腦匯), a computer and electronics chain owned by Taiwanese notebook computer maker Clevo Co (藍天), said the dispute arose after rental fee negotiations with its tenants in Hangzhou City broke down, while many of its executives and staff were injured as they were assaulted and jostled by about 100 people.
The proposed investment protection agreement is aimed at establishing a framework for the settlement of G2G (government-to-government), P2P (private-to-private) and P2G (private-to-government) disputes to help protect the rights of Taiwanese businesses in China.