Tue, Jan 18, 2000 - Page 1 News List

Top Lee confidant calls for caution after WTO entry

OPENING UP Taiwan needs to be cautious in opening up trade and investment with China and the 'no haste, be patient' policy should stay, academics and officials say

By Shirley Sun  /  STAFF REPORTER

A close financial advisor to President Lee Teng-hui (李登輝) yesterday expressed support for maintaining the current "no haste, be patient" (戒急用忍) policy after Taiwan enters the WTO.

"Cross-strait trade volume will naturally increase after Taiwan and China have both entered the WTO," said Lee Cheng-few (李正福), a financial advisor to President Lee and professor at Rutgers University in the US.

"Why rush to have three restrictive measures on mail, transportation and business removed?" he said. "Although their removal would make cross-strait business easier, it would have a detrimental effect on Taiwan's national security."

Lee made the remarks yesterday at a press conference held to launch his autobiography.

The finance professor suggested waiting three to five years after WTO entry, and then adjusting relevant policies accordingly.

"This is the smoothest way to cope with uncertain future cross-strait interaction," Lee said.

Lee Kao-chao (李高朝), vice chairman of the Cabinet-level Council for Economic Planning and Development (經建會), agreed.

"The `no haste, be patient' policy is a timely measure, and it protects Taiwanese entrepreneurs," the vice chairman said. "What Taiwan needs is a gradual transformation, not a drastic change."

Taiwan might already be very competitive worldwide, but that didn't make it safe, according to Wu Rong-i (吳榮義), president of the Taiwan Institute of Economic Research (臺灣經濟研究院).

"We are afraid of China, which hasn't stopped its saber-rattling against Taiwan," Wu said. "Unless there is guaranteed peace, a `no haste, be patient' policy is necessary."

Scholars and officials yesterday also expressed support for the recently passed National Stabilization Fund and the establishment of rules to protect Taiwan from the sudden impact of short-term volatility in the international money markets following WTO entry.

Lee Cheng-few applauded the establishment of the NT$500 billion stabilization fund (國家安定基金), which is being created to maintain stability in the stock market in the event of non-economic emergencies following WTO entry.

"A small country does not have the leisure to have a market open to free competition," Lee said. "The question now is how the government will punish those who use the national stabilization fund unprofessionally."

With that question in mind, the Legislative Yuan on Saturday passed the Regulations for the Establishment and Management of the National Stabilization Fund (國家安定基金設置管理條例). According to the regulations, those who act unprofessionally, by insider trading for example, would receive jail terms of up to seven years or be fined up to NT$10 million.

But despite the establishment of the fund, Mai Chao-cheng (麥朝成), president of the Chung-hua Institution for Economic Research (中華經濟研究院) still warned of the possible serious impact of WTO entry on Taiwan's stock and financial markets.

"The market should not be opened too fast," Mai said. "Short-term international money is like an unstable bomb -- the government should first establish rules of the game."

The capital market will be fully opened up at the end of this year and foreign investors will be able to hold 100 percent of a local company's stocks, said Minister of Finance Paul Chiu (邱正雄).

But "foreign capital coming into Taiwan will be closely regulated by the Central Bank of China," he said.

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