Thu, Sep 19, 2002 - Page 1 News List

... as Cabinet is censured on China investment rush

By Lin Miao-Jung  /  STAFF REPORTER

The Cabinet was censured in a report by the Control Yuan yesterday for its failure to effectively manage China-bound investment and to respond to the exodus of industry across the Taiwan Strait.

The Cabinet's negligence was said to have led to national economic recession and increasing unemployment.

The Control Yuan also criticized the government for its lack of effective measures to deal with companies which export their capital to China, do not repatriate their profits and leave nothing in Taiwan but debts.

"The Cabinet and its subordinate agencies can't shake off blame for this situation," said Lee Shen-yi (李伸一), a member of the Control Yuan task force.

Lee, along with his colleagues Chao Ron-yaw (趙榮耀) and Lin Shih-chi (林時機), released a report yesterday after a year-long investigation.

According to the report's findings, by the end of July this year 25,033 applications to invest in China, totalling US$22.1 billion, had been approved by the investment review committee under the Ministry of Economic Affairs.

This amounted to around 40 percent of Taiwan's total foreign investments.

In addition, according to figures from the Ministry of Finance, by the end of March this year, among 975 listed companies in Taiwan, 490 of them had invested in China, with an accumulated outflow of NT$197.7 billion.

Only NT$2.34 billion has been remitted back to Taiwan, and only 27 companies have made such remittances.

This means that only 1.18 percent of the total capital outflow has been repatriated.

"The rate of remittance is too low. And this could be one reason for the hollowing out of industry in Taiwan," said Lin.

Lin added that while regulations concerning investments are clear and punishments specified, prosecutions for breaking the regulations and investing illegally were seldom launched.

"The Cabinet apparently has not carried out its policies and has no effective measures to deal with the matter," Chao said.

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