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Forum to address cross-strait trade

A number of issues concerning further relaxation of the government's control on China-bound investment were confirmed yesterday for discussion at next month's Economic Sustainable Develop-ment Conference.

Among the topics to be discussed is whether or not to lift the 40 percent capital ceiling for China-bound investment and whether the government should allow 0.18-micron semiconductor manufacturing processes to go to China, according to a background information paper released by the Mainland Affairs Council (MAC) at yesterday's preparatory meeting.

The conference, the second of its kind to be convened by the Democratic Progressive Party administration, is expected to hammer out specific policy suggestions by gathering views from industry and academia.

Opposition party participants include representatives from the Chinese Nationalist Party (KMT), which sent 15 members to attend the meeting through its think tank. The People First Party boycotted the event.

KMT Legislator Lee Jih-chu (李紀珠) yesterday suggested that discussion on lifting the ban on banking industry investment in China should be included.

Chen Chao-wei (陳朝威) from the Chinese National Association of Industries and Commerce urged the government to take a more proactive stance in loosening measures restricting cross-strait economic exchanges.

MAC Chairman Joseph Wu (吳釗燮), however, said it was not feasible for the government to make unilateral decisions on cross-strait economic issues that were by definition a matter for mutual negotiations, but which Beijing officials frequently refused to discuss.

Other topics to be discussed in the upcoming conference also include the problem of Taiwan's increasing export reliance on China, a review on restricting imports of sensitive products from China and the shrinking of foreign direct investment in Taiwan over the last five years.

The background information paper provided by the MAC indicated China-bound investment since 2002 had increased significantly and now accounted for 50 percent to 70 percent of total foreign investments made by Taiwanese companies.

Taiwan's cumulative investment in China now totals US$150 billion, three times higher than previously estimated, the paper said.

The MAC didn't offer a precise figure, but said the upper limit of its estimate was US$150 billion.

A previous estimate by the Ministry of Economic Affairs put Taiwan's cumulative investment in China at US$49.4 billion as of the end of April.

The paper also indicated a decline in foreign direct investment in Taiwan, but an increase in portfolio investment by foreign companies.

Additional reporting by AP
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