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Tue, Mar 12, 2002 - Page 18 News List

Lawmakers want law tightened to slow capital outflow

By Stanley Chou  /  STAFF REPORTER

In order to prevent capital outflow from eight-inch wafer fabs moving to China, the Legislative Yuan's Technology and Information Committee requested yesterday that the Central Bank and the Ministry of Finance submit a related report within one week, according to Chinese-language media report.

Government officials, including the central bank's deputy governor, Hsu Yi-hsiung (徐義雄), and Ministry of Finance Political Vice Minister Susan Chang (張秀蓮), claimed that outflow of capital, once the eight-inch wafer fabs are allowed to move to China, will not be that serious.

Much of problem stems from concerns that the market opening will trigger a massive outflow of capital.

"It takes about US$1 billion to US$1.5 billion to set up one eight-inch wafer fab (in China)," Hsu was quoted as saying.

Since setting up a factory abroad is a step-by-step process, capital outflow will be on an incremental, decreasing basis, and once they are operating the outflow stops, he said.

Many Taiwanese businesses also utilize capital from overseas markets to invest in China, so for these reasons, the capital outflow from Taiwan businesses moving their wafer fabs to China is not that serious, Hsu said.

"Taiwan's current account surplus in 2001 was US$19 billion. The surplus should be enough to cover the losses generated from moving out the eight-inch wafer fabs," said Hsu.

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