“Lifting the cap to 60 percent won’t have a great influence on capital outflows [to China] because investments many businesses make in China are still far below their granted quotas,” Shih said.
The ministry’s proposal also suggested exempting firms with operations headquarters in Taiwan and subsidiaries of multinationals from the 60 percent cap.
“We suggested not putting the limitation [on the types of businesses] in principle, but details will not be finalized until [Thursday’s] Cabinet meeting,” Shih said.
Shih said “there is no point in worrying” that the relaxations would lead to transfer of technologies and capital outflow as the government can still regulate the flow of investments to China.
“The removal of the cap will attract more multinational corporations to invest in Taiwan, help Taiwan become a stepping-stone for foreign businesses to enter the Chinese market and assist Taiwanese businesses in reaching out to the world,” he said.
Shih said the ministry would complete necessary revisions to the bylaws within one month.
When asked for comment, KMT Legislator Lai Shyh-bao (賴士葆), a member of the legislature’s Finance Committee, lauded the president’s decision, saying that “opening up Taiwan is more important than anything else.”
Lai said the relaxation would attract more foreign investors to Taiwan and make it easier for Taiwanese capital to flow across the Taiwan Strait.
ADDITIONAL REPORTING BY FLORA WANG
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