The Democratic Progressive Party (DPP) caucus said yesterday it opposed the government’s plan to enlarge a state-owned venture capital fund and allow companies to use the fund to invest in China.
Council for Economic Planning and Development Chairman Chen Tian-jy (陳添枝) announced on Thursday that the government would increase the value of the National Development Fund (國發基金) five-fold to NT$1 trillion (US$29.95 billion) to help local enterprises amid the global financial crisis.
To enlarge the National Development Fund, the government said it would borrow up to NT$800 billion from the Postal Savings Fund run by stated-owned Chunghwa Post Co.
DPP caucus whip William Lai (賴清德) told a press conference the government had previously stated that the National Development Fund could not be used for investments in China, but in a meeting held on Aug. 10 the Cabinet decided to allow a company that receives a loan from the fund to use up to 20 percent of its total net worth for investments in China.
Lai said the government has been steadily raising the cap on China-bound investment by local enterprises and now it wanted to expand the nation’s investment in China even further by investing the public’s savings there, which would worsen the situation where “money enters China, leaving Taiwan with debts.”
The legislator said that previous Chinese Nationalist Party (KMT) administrations had used various state-owned funds to help tycoons, such as Wang You-theng (王又曾), Chu An-hsiung (朱安雄), Tseng Cheng-jen (曾正仁) and several others, which had resulted in the embezzlement of public money.
“As the government plans to use people’s savings to profit local businesses, has it asked the public’s opinion on the matter?” DPP Legislator Lee Chun-yee (李俊毅) asked.
The government had not even informed the legislature before announcing the decision, he said.
A run on Chunghwa Post might occur because of the government’s decision and Chunghwa Post could then go bust, he said.
Chen said the government would offer financial assistance to companies in strategic industries that were vital to the nation’s long-term economic development. These mainly included companies in the manufacturing sector and some service and financial industries.
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