Several business leaders led by Formosa Plastic Group (台塑集團) Chairman Wang Yung-ching (王永慶) urged the government to lift its ban on direct cross-strait shipping and trade links as well as restrictions on cross-strait investment during a meeting with President Chen Shui-bian (陳水扁) yesterday.
At the two-hour meeting, the business people assured the president that investment in China would bolster domestic industries and not weaken them.
Arguing against claims that investment in China will drain the island's capital and hollow out local industry, they said the government could ask Taiwanese firms to keep their capital at home and use borrowed funds from abroad for overseas investment.
Chen did not comment on the suggestions.
Yesterday's meeting came after Wang and several other business leaders urged politicians to quickly negotiate an end to a month-long standoff that is threatening the economy between the new government and the opposition-controlled legislature.
Taiwan bans semiconductor firms from investing in China. It also bans infrastructural and other big projects worth over US$50 million in China.
Formosa Plastics, Taiwan's largest business conglomerate, was forced to suspend a project to build a petrochemical complex in China several years ago.
Taiwanese have invested more than US$40 billion in China. In addition to labor-intensive industries, many Taiwanese computer firms have set up assembly lines in China to take advantage of its low wages.
As both Taiwan and China are expected to be admitted to the WTO early next year, Taiwan has come under increasing pressure to remove its trade and investment barriers.
Chen Ming-tong (陳明通), vice chairman of the Mainland Affairs Council, said yesterday that the government is expected complete its evaluation of the policy on direct cross-strait shipping and trade links by the end of this year.
Under the government's plan, direct cross-strait shipping and trade links will be opened up on a gradual basis in conjunction with the development of cross-strait ties, Chen said.
Chen said Taiwan will first open its doors wider to Chinese imports and allow Chinese investment in the nation's services industry after both Taiwan and China are admitted into the WTO.
Taiwan will then negotiate with China on issues concerning direct cross-strait exchanges of personnel, capital and goods after it establishes its own safety mechanism on the exchanges, Chen added.
Also, Chen said the government is tempted to remove the restriction on investment in China to facilitate the government's better regulation of such cross-strait investments.
Taiwan is set to push ahead direct shipping links between its frontline islands of Kinmen and Matsu and two Chinese ports early next year as a litmus test before the links are opened up to the rest of Taiwan.
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