President Chen Shui-bian (陳水扁) said yesterday that he would not relax the 40 percent cap on investment in China, although Democratic Progressive Party presidential candidate Frank Hsieh (謝長廷) suggested easing the regulations on Monday.
Chen said "active management, effective opening" has been his administration's cross-strait economy policy and would remain so.
"There is room for discussion about certain isolated cases, as long as they do not violate the principle," he said. "However, such a fundamental policy will not change, at least not during my term. Nor will the 40 percent investment cap in China."
Hsieh proposed four strategies -- a wider opening to global capital, including investment from China; granting amnesty to facilitate the return of capital previously remitted out of the country via underground or illegal channels; lowering the tax on inherited property and gifts to below 10 percent to encourage the wealthy to keep their money in Taiwan; and adjusting the 40 percent ceiling on investment in China on a case-by-case basis.
Chen said he respects Hsieh's opinion and discussed the issue with him.
Taiwan Solidarity Union Chairman Huang Kun-huei (黃昆輝), however, expressed strong opposition to easing the 40 percent investment cap yesterday, saying that Hsieh's proposal was designed to embrace a "great China" economic development plan.
He also opposed the 18 to 24-month "grace period" Hsieh proposed for capital remittances.
When fielding questions from Chinese Nationalist Party (KMT) legislators Lee Ching-hua (李慶華) and Hwang Liang-hua (黃良華) on the legislative floor yesterday, Premier Chang Chun-hsiung (張俊雄) said he "generally" agreed with Hsieh's proposal, but the government would need time to come up with a complete set of policies.
Hwang said many Taiwanese businesspeople had doubts about Hsieh's proposal and wondered why the government could not ease investment restrictions sooner.
Chang told him that it was difficult to relax the regulations because there was no national consensus on the issue and that China had suspended cross-strait negotiations.
"This is the reality now," Chang said. "We cannot say whether [Hsieh's proposals] will work after he wins public support to become the president next year."
"This still depends on how the two sides of the [Taiwan] Strait interact with each other," Chang said.
Mainland Affairs Council Chairman Chen Ming-tong (陳明通) said the official record showed that Taiwanese investment in China over the past seven years amounts to between NT$40 billion (US$1.2 billion) and NT$50 billion.
"What we need to consider is how to strike a balance between investment in China and safeguarding national security. That is why we have the cap," Chen Ming-tong said.
"We welcome Chinese investors if they are simply making investments in Taiwan. But everyone knows that China usually embeds political goals in its cross-strait economic policies," he said.