The policy that bans Taiwanese firms from investing more than 40 percent of their net value in China has come under intense scrutiny, with many government officials concluding that it has been ineffective in stemming the surge of China-bound investment over the last decade, a top China affairs official said yesterday.
Mainland Affairs Council (MAC) Chairman Joseph Wu (
"Obviously the 40-percent cap set up in 1997 has failed to meet both the needs of the local industries and the government's goal of managing the flow of China-bound capital," Wu said at a forum held by the Taiwan New Century Foundation on how Taiwan can prepare itself for the hidden dangers of the Chinese economy.
PHOTO: WANG MIN-WEI, TAIPEI TIMES
Wu said that the government was currently reviewing the feasibility of the restriction, in the context of both allowing local industries to take advantage of the economic opportunities in China, and enhancing the industries' ability to diversify their investments in the global market.
Wu said there has been heated debate about the issue in the preliminary meetings for the upcoming Conference on Sustainable Economic Development scheduled for July 27 and July 28, and that the MAC was still soliciting opinions from businesses and academics.
In response to the threat by the Chinese National Federation of Industries to hold demonstrations in November if the government doesn't make progress on lifting the investment cap and ban on direct cross-strait air links, Wu said that the government is trying to find a balanced solution to the problem.
"Our consideration is not simply to lift the 40 percent investment cap. Rather, we are thinking about how to make the management of Taiwanese businesses' investment in China more effective, just and transparent," Wu said.
He added that the government's goal is to help Taiwanese people reach the cutting edge of their industries in the global market.
Wu said at the forum that the hidden dangers of China's economy are the widening gap between the rich urban cities on the eastern coast and the poor farming villages in the western hinterlands, increasing environmental pollution, rampant government corruption and the ever-more strict suppression of democracy.
Chang Ching-hsi (
Yang Chia-yen (
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