Thu, Aug 03, 2006 - Page 1 News List

Cabinet stands firm on investment cap

NO CHANGE Premier Su Tseng-chang says he has no intention of changing a cap on investment in China, despite efforts by certain companies to lobby the government

By Jimmy Chuang  /  STAFF REPORTER

The government will retain its hardline stance toward businesses wishing to invest in China, keeping in place a cap on investment despite pressure to ease its policies, a Cabinet spokesman said yesterday.

Refusing to make a concession to businesspeople who have lobbied the government to increase the amount of money they can invest in China, Cabinet Spokesman Cheng Wen-tsang (鄭文燦) said that there was already too much reliance on the Chinese market by Taiwanese businesses.

"[Premier Su Tseng-chang (蘇貞昌)] said that of Taiwan's foreign investment, 70 percent is in China. This is way too much and is too dangerous for us," Cheng said. "We do not want to put all our eggs in one basket."

Companies are limited to investing a maximum of 40 percent of their net value in China in accordance with the Statute Governing Relations Between the People of the Taiwan Area and the Mainland Area (兩岸人民關係條例)

"We currently have no intention of making any changes to this investment cap," Cheng said.

The spokesman said that the government's current policy was to improve the local financial environment to lure more investment.

"It is not that we do not want to open our doors to China. But we must make ourselves ready. If we secure ourselves and make sure that everything is fine, we can open the door wider toward China, but we can make sure we will be in good shape at the same time," Cheng said.

`Consensuses'

The spokesman also said that one of the "consensuses" reached during a recent economic summit organized by the ruling party was that the government should hold constant negotiations with the Chinese government over differences in banking systems and financial risks across the Taiwan Strait.

As China has consistently refused to have any official dialogue with the current adminstration, it was not clear how, or if, the government could implement such negotiations.

Still, Cheng praised the outcome of the economic summit, saying that "516 consensuses" had been reached and would be developed into policies within one month.

"Among these consensuses, those that the Cabinet can implement immediately will be handled first," he said.

"The `other opinions' will not go to waste, either, because they will become important reference points for us to make future policies as well," Cheng said.

Cheng made his remarks on behalf of Su during a press conference after yesterday morning's weekly Cabinet meeting. He said that the premier valued the consensuses reached at the conference, and had requested that his fellow Cabinet members do their best to implement them as soon as possible.

The premier also praised Vice Premier Tsai Ing-wen (蔡英文) for her efforts at the conference, Cheng said.

Cheng added that the premier was also asking for help from the legislature, and that he hoped lawmakers would speedily make or amend laws dealing with the "516 consensuses."

"The premier said that Chunghua Institution for Economic Research Chairman Vincent Siew's (蕭萬長) proposal to make Taiwan a `green, value-added island' before 2015 must be carried out step by step and that a detailed plan should be put in place," Cheng said.

Health insurance

Meanwhile, Cheng said the premier mentioned that rumors of a potential increase in the health insurance premium were not true.

"Currently, we do not have any such plans," Cheng said.

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