Mon, Oct 20, 2003 - Page 1 News List

Nation luring investment, minister says


Better-than-expected investment from foreign firms such as Dell Inc and NTT DoCoMo Inc shows that Taiwan has gained an edge over rival China and Southeast Asian nations, a government official said yesterday.

Foreign and domestic companies have decided to funnel about NT$138.39 billion into 186 investment projects in Taiwan, Vice Minister of Economic Affairs Shih Yen-shiang (施顏祥) said at the opening of the 2003 Taiwan Business Alliance Conference.

The Ministry of Economic Affairs' original target for foreign investment was NT$100 billion (US$2.95 billion).

"The better-than-expected investment proves that Taiwan is highly competitive because local companies have high-technology capabilities, high-quality talent as well as sound infrastructure," Shih said.

The bulk of the NT$138.39 billion will come from industrial sectors such as flat-screen display manufacturing, semiconductor manufacturing, biotechnology, finance and wireless communications, Shih said.

The Taiwan Business Alliance Conference -- the biggest investment promotion event ever held in the nation -- kicked off yesterday at the Taipei International Convention Center. More than 1,913 company representatives, half of them from overseas, are set to join the four-day conference.

"Though China is growing to become the world's workshop, I'm confident that Taiwan still has a competitive edge in the high-tech area," Shih told reporters.

Shih, however, admitted that China's growth remains a problem for the government given the lack of direct transportation links.

"It's a political issue which will be solved only through negotiations," he said.

Last month, the government proposed allowing indirect charter cargo flights between the two sides of the Taiwan Strait. The plan is aimed at facilitating domestic carriers' ability to transport goods via Hong Kong or Macau without changing planes. The proposal was rejected by the Chinese authorities late last month.

The shift of manufacturing to China has raised concerns over Taiwan's manufacturing capability.

Shih dismissed such arguments, saying Taiwanese businesses tend to keep the manufacturing of high-end products as well as research here, while gradually moving their low-end manufacturing to China.

"Chinese manufacturers are still at the entry level," lagging behind their Taiwanese counterparts in technology development, Shih said. "In contrast, advanced-technology capabilities and high-quality engineers have made Taiwanese companies more competitive as they are able to provide valued-added services and high-end products with a high profit margin."

Besides, some 60 to 70 percent of electronics products exported from China are made by Taiwanese companies, he added.

The cross-strait political stalemate is not viewed as a handicap for foreign companies looking to increase their investment in Taiwan, Shih said.

"China is definitely an important factor [when deciding on an investment project]. But, it's not a determining factor," he said.

Close trade ties between Taiwan and China will benefit Taiwan by luring more foreign investment, Shih said.

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