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SEF tells businesspeople to be cautious in China

The Straits Exchange Foundation (SEF) called for the country's businesspeople to be on guard against the risks of investing in China.

The SEF, a quasi-official body set up to handle civilian exchanges between the two sides of the Taiwan Strait in the absence of formal ties, issued the warning to coincide with the publication of a book Risks Taiwanese Businesspeople Cannot Overlook When Investing in China.

The book contains the stories of 36 Taiwanese businesspeople who were cheated, wronged, intimidated, or even murdered after investing in China.

CHANGE

SEF chairman Hung Chi-chang (洪奇昌) said the investment environment in China had undergone tremendous changes in recent years, citing the daunting challenges of water shortages and electricity rationing in eastern and southern China.

China's cut of export rebates for certain products, the unification of the income tax system for domestic and foreign businesses, rising wages, as well as environmental protection policy for new businesses and the law on labor contracts -- which will come into effect next year -- have all increased operating costs for enterprises and cut their profit margins, Hung said.

RISE

But despite the dramatic changes in China's investment environment, Hung said that tallies from the Investment Commission under the Ministry of Economic Affairs show that investment in China has continued to rise in recent years.

Even as the number of investment projects has decreased, the amount of money flowing into any single investment project has risen, showing that the scale of investment has expanded.

He also said that the ratio of Taiwan's investment in China now constitutes half of Taiwan's outbound investment, surpassing combined investments in Europe, the US, Japan and Southeast Asia.

Hung said that if the "go west" investment trend is unstoppable, then those who are keen to go must be aware of the possible risks they will face.
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