If Taiwan is to have any hope of drawing its share of foreign direct investment in the future, the government must act now and relax regulations governing investment in local companies, financial experts said yesterday.
"When it comes to inviting foreign investment, many people will first think of simply luring multinational firms to set foot here," Du Ying-tzyong (
While having foreign investors come here is good, "pushing Taiwanese companies to be listed in international markets is the best and the fastest way to bring in foreign cash," Du said.
Du made the remarks at a forum held yesterday at the Taipei International Convention Center. The event was a prelude to the 2003 Taiwan Business Alliance Conference which will be held at the Taipei International Convention Center later this month.
Du said foreign investors are increasing their purchases in the nation's US$340 billion stock market. For the first nine months, qualified foreign institutional investors (QFII) have accounted for 16 percent of Taiwanese stock purchases, up from 8.9 percent in May 2000, he said.
In addition, Taiwanese enterprises have attracted approximately US$11.1 billion in foreign capital between January and last month, up from US$7.7 billion a year ago, Du said.
The government this month abolished a 12-year-old rule that limited each QFII to owning only US$3 billion in TAIEX-listed shares. But the government needs to do more to allow for healthier development in domestic capital markets, Du said.
Paul Lo (
With the myriad regulations, "we feel that we are being controlled like state-owned banks," he said.
Lenders in Taiwan are seeking merger and acquisition targets as the government pushes for consolidation in the industry. And Lo said the government should encourage more mergers and acquisitions among major banks to compete with foreign financial conglomerates.
"Besides, privatization of state-run banks ought to proceed faster," he said.
Aside from the issue of financial regulations, another common refrain was voiced at the conference: cultivating talent to perpetuate Taiwan's advantages in attracting foreign investment.
"Quality workers are the impetus behind the high-tech industry," Siemens Ltd President Leslie Lok (駱一華) said. "Methods of improving technological know-how through education and training is therefore important when facing competition from all over the world."
At the conference, Premier Yu Shyi-kun said the government would meticulously review the opinions of the speakers as part of its efforts to improve the nation's investment environment.
"The government has been working hard to lift restrictions on the financial sector, but it takes time to amend various laws and regulations," Yu said. "As for education, we've proposed several education initiatives over the past few years, and I believe their positive effect would be felt once they were put into practice."
While admitting some improvement was still needed in the financial sector and with the education system, Yu pointed out that now is the best time for foreign investors to invest in Taiwan's markets.
Assuming the recovery of the global economy continues, Taiwan's GDP growth rate is expected to reach 3.06 percent this year, and continue to grow to 3.81 percent next year, Yu said.
The Economist Intelligence Unit, a UK-based research firm, is even more optimistic about Tai-wan's economy, predicting that GDP growth will acccelerate to 5.4 percent next year, Yu said.
"I believe these positive forecasts -- as well as various tax incentives -- will help lure foreign capital and help Taiwan's economy prosper," Yu said.
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