Critics say China policy doesn't address real needs

SINS OF OMISSION: Business leaders say that most of those with investments in China didn't register their assets with the government in the past and won't do so now

By Tsai Ting-i  /  STAFF REPORTER

Fri, Nov 09, 2001 - Page 24

As promised, the Chen administration has eased its investment policies relating to China with the adoption of its "proactive opening, effective management" strategy.

However, pundits doubt that many currently illegal investors will submit to the second leg -- or "effective management" -- of the government's new cross-strait investment regime. They also doubt whether that specific action is needed on direct links with China.

Over the past five years, however, a large number of Taiwanese citizens have invested in businesses in China without applying for permission and without reporting their activities to the government.

This is largely because of legal prohibitions under the "no haste, be patient" policy, which limited the types and size of investments businesses could make in the PRC. Also, businesses avoided registering to save time and money.

According to a number of private surveys, the number of Taiwanese citizens investing in China is currently estimated at between 300,000 to 500,000, yet the Investment Commission (投審會) of the Ministry of Economic Affairs (經濟部), only lists 23,754 registrations for legal investment projects in China. Instead of continuing feigned ignorance of the large number of illegal investments in China, the government lifted its partial ban Wednesday in an effort to encourage businesses to report investments in China and repatriate funds to Taiwan.

Tsai Ing-wen (蔡英文), chairwoman of the Mainland Affairs Council emphasized that the "effective management" leg of the new policy is designed to facilitate businesses' efforts in China.

She said it is a convenient way for Taiwanese investing in China to report their projects -- enhancing market mechanisms without limiting the companies' ability to profit from opportunities in China.

"Creating the management system is just like setting up traffic lights to control heavy traffic -- the purpose of setting up traffic lights is to help smooth traffic, not to stop it," Tsai said.