President cautions on many dangers of China investment

President Chen Shui-bian (陳水扁) said late Monday that Taiwanese high-technology industries have increasingly tilted to China, making it imperative for the administration to exert tighter controls for national security as well as for the industries' own survival.

In an interview with a local TV station, Chen noted that relaxing the policy on cross-strait exchanges can only be done when there is an effective management mechanism in place.

Noting that even liberal governments like that of the US maintain controls on high-technology exports, Chen said that it is "right and necessary" for the government to impose some controls on China-bound Taiwanese investment, particularly in the high-tech industry.

Chen expressed the hope that the Legislative Yuan will pass a science and technology protection bill as soon as possible so that there will be "clear rules of the game" in place for the business sector to follow and for the administration to enforce.

Stressing that China is not just "any foreign country," particularly to Taiwan, Chen said that investing in China "is not simply a matter of mutual benefit." While the government should do its part to maintain Taiwanese industries' international competitiveness and national security, all the Taiwanese companies maintaining business operations in China should "keep the political risks in mind," he added.

Taking Chi Mei Optoelectronics as an example, Chen said that when the company first entered China, the chairman of the company at the time, Hsu Wen-lung (許文龍), was given all sorts of special treatment. But after the company settled there, the Chinese communists' attitude changes and "the conveniences enjoyed by the company turned into illegalities," the president said.

Chen said that in 2001, his administration changed the former "no haste, be patient" policy, aimed at reining in Taiwan investment in China, into a new "active opening, effective management" policy in the hopes that Taiwanese industries and businesses could "plow deep locally and position themselves globally" in the 21st century.

The president urged the Taiwanese businesspeople operating in China to keep their core business base and research and development in this country while making money overseas, noting that China is not "the only or last market in the world."