The nation's investment watchdog yesterday announced the revision of rules governing major China-bound investments, part of measures to implement the government's "active management, effective opening" policy toward cross-strait business.
The new rules -- which were to take effect immediately -- define "major investments" as any investment over US$100 million, or accumulated investments over US$200 million with any single increment greater than US$60 million, by Taiwanese individuals, corporations or groups, the Investment Commission under the Ministry of Economic Affairs said in a statement yesterday.
"We are tightening Chinese investment controls as we have found recently that an increasing number of projects are large and could have a greater impact on the nation's economy," Huang Chin-tan (
When asked to specify examples, Huang said that the investment plans of some of Taiwan's larger companies such as AU Optronics Corp (
Investments in core industries or technologies regulated by the commission are categorized as "major investments" as well, the commission's statement said.
The core industries and technologies include 8-inch or under wafer manufacturing, chip packaging and testing and middle- stream manufacturing of TFT-LCD modules of 4 inches or under, the statement said.
Major investments will require authorization by government departments led by the economics ministry, the statement said.
Those who apply to make major investments in China are also required to make commitments to ensure the interests of Taiwan's economy. They include pledges to return a percentage of profits back to Taiwan, and the submission of details on technology transfer, in which companies need to demonstrate how they will safeguard against the transfer of sensitive technology and protect intellectual property rights.
The companies also need to list equipment they plan to export to China, their planned investments in Taiwan over the next three years, their level of investment in foreign countries other than China, the proportion of world-to-China investment and the impact on employment that will occur in Taiwan as a result of the project, the statement said.
Earlier yesterday, President Chen Shui-bian (陳水扁) expressed opposition to the proposal to lift the 40 percent cap on China-bound investment by Taiwanese companies.
"Many people recently have been talking about whether the ceiling on China-bound investment should be relaxed," Chen said. "I've always thought such a proposal is like putting the cart before the horse."
Chen made the remarks while meeting with this year's winners of the model entrepreneurs award at the Presidential Office yesterday.
Chen's statement also came at a time when market watchers have been speculating whether the government would relax its China-bound investment restrictions.
Last month saw the attempted acquisition of Advanced Semiconductor Engineering Inc (ASE,
But Chen said yesterday that the focus of the business investment issue should be on how to increase investment in Taiwan rather than how to increase investment in China.
He cited the planned joint investment by Powerchip Semiconductor Corp (
Earlier this month, both Powerchip and Elpida announced they would together invest between NT$450 billion and NT$500 billion (US$13.93 billion-US$15.48 billion) to build four plants in central Taiwan to make 12-inch chips over the next five years.
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