China investment criticized by adviser - Taipei Times
Sat, Jun 12, 2004 - Page 3 News List

China investment criticized by adviser

WAY TOO MUCH Huang Tien-lin, a national policy advisor, believes the nation should focus more investment attention on Southeast Asia if it wants a return on its money

By Chang Yun-ping  /  STAFF REPORTER

National Policy Advisor Huang Tien-lin (黃天麟) yesterday sounded an alarm about Taiwan's level of investment in China, saying that total investments in China are now equal to half of the nation's annual GDP and are seriously threatening investment in Taiwan itself.

Huang sounded more optimistic, however, about Taiwanese investment in Southeast Asia, saying that investment there tends to result in greater economic activity in Taiwan than does investment in China.

In a seminar titled Cross-Strait Economic and Trade Affairs after the Presidential Election, sponsored by the Taiwan Research Institute, Huang urged the government to pay heed to the nation's growing economic reliance on China -- especially considering that China has quickly reduced its economic dependence on Taiwan during the ongoing cross-strait political impasse.

south korea

Huang said that the nation's total investments in China are equal to half of the country's GDP. In contrast, Japanese and South Korean investment totals in China are equal to 0.6 and 2.7 percent of their GDPs, respectively.

He said that South Korea's investments in China do not account for too great a portion of its national GDP and that its exports to China are on the rise -- and are now almost on a par with Taiwan's.

"While South Korea's exports to China are almost equal to Taiwan's, the South Koreans' reliance on investment in China isn't as high as it is in Taiwan. This has boosted South Korea's competitiveness, while Taiwan is losing its competitiveness," Huang said.

Quoting statistics from the Ministry of Economic Affairs, Huang said that Taiwanese businesspeople operating in China obtain only 26 percent of necessary raw materials from Taiwan, while Taiwanese investors in Southeast Asia bring in up to 72.02 percent of needed raw materials from Taiwan.

Huang said the figures show that the nation's investments in Southeast Asia could help to boost the domestic economy.

Discussing the rate of hiring of Taiwanese employees in operations abroad, Huang said that Taiwanese businessmen in China have reduced such hiring by 5 percent each year, while Taiwanese businessmen in Southeast Asia have increased such hiring by 5.6 percent every year.

domestic climate

However, some academics disagreed with Huang's remarks, saying that the government should try to improve the domestic investment environment instead of limiting where businesspeople can invest.

Tsai Hung-ming (蔡宏明), deputy secretary-general of the Chinese National Federation of Industries, and David Hong (洪德生), vice president of the Taiwan Institute of Economic Research, both said yesterday that businesspeople's investments in China are profit-driven and that if the government wants to scale back investment in China, it should seek to improve the domestic investment climate.

Regarding cross-strait politics, Chen Ming-tong (陳明通), former vice chairman of the Mainland Affairs Council, yesterday expressed optimism about a cross-Strait "stability framework" -- and suggested that Taiwan, China and the US have already agreed on establishing such an agreement.

To back up this claim he mentioned President Chen Shui-bian's (陳水扁) May 20 inauguration speech, the "Seven Points" that Chinese President Hu Jintao (胡錦濤) issued on May 17 and articles by American China experts Kenneth Lieberthal and David Lampton that were recently published in the Washington Post.

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