Tue, Aug 01, 2006 - Page 3 News List

China-bound investment cap review ongoing: MAC

NO DEADLINE The head of the Mainland Affairs Council said that there was no timeline on when or if the 40 percent cap on investment would be lifted

By Chang Yun-ping  /  STAFF REPORTER

Government officials yesterday said that there was no timetable on the review of the current China-bound investment cap of 40 percent of a company's net value, in the wake of sharply divided opinions on the issue expressed at the Cabinet-led economic summit last week.

Mainland Affairs Council (MAC) Chairman Joseph Wu (吳釗燮) yesterday said that "the government will have more communication [with the concerned parties] and continue its review of the [the 40 percent cap] policy."

The lifting of the investment ceiling became the most hotly debated issue at last week's economic conference, which in the end failed to reach consensus on whether to relax the cap and other rules on China-bound investment.

Representatives from the Taiwan Solidarity Union, which opposes any further relaxation rules on China-bound investment, walked out of the summit after failing to block the issue from becoming part of the "other opinions" listed at the conference's conclusion.

"Because there is no consensus on the matter, I can't predict what the future developments will be ... but the basic principle will be to make the management mechanism more fair, transparent and effective," Wu said.

He noted that although there was no consensus about whether to relax the cap at the meeting and the issue was only counted as a minor policy suggestion to the government, "it does not mean that the possibility [for changes] was ruled out and there is still room for discussion in the future."

Wu said that while there was no agreement on lifting the investment cap, there was also no consensus on keeping it in place.

Any future revisions to the nation's China-bound investment policy would not involve simply increasing or decreasing the 40 percent cap of a company's net value, but would include using other indexes to monitor the amount of investment flow to China, and employ different approaches for different industries, the official explained.

Wu said there would be a cooling-off period to let things calm down and allow the government to focus on the points of consensus reached in the meeting. The Cabinet is required to come up with an implementation plan for those points within a month.

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