Starting today, Chinese companies and investors will be allowed to submit investment proposals to the government, as a total of 100 industrial sectors have been opened to investments from across the Taiwan Strait, the Ministry of Economic Affairs said yesterday.
Chinese companies and investors can now invest in 64 sectors of Taiwan’s manufacturing industry, 25 sectors of the service industry and in 11 infrastructure projects, the ministry said.
The 64 manufacturing sectors range from textiles and rubber and plastic products, to less sensitive electronic components, home electronic products, farm and mining machines, cars and auto parts, bicycles and sports products.
The 25 service sectors include restaurants, retail, recycling and distribution of non-sensitive industrial, medical and farm products.
The 11 infrastructure projects include investment in ground facilities around air and sea ports, development of commercial ports and major tourist establishments.
“There will not be a complete opening of the Taiwanese economy to Chinese investment. This opening does not jeopardize the nation’s sovereignty,” Deputy Minister of Economic Affairs John Deng (鄧振中) told a press conference. “The government’s goal is for the normalization of cross-strait commerce in order to boost the local economy and increase employment opportunities.”
Deng said the ministry would adopt a stringent and gradual opening of Taiwan to Chinese investment. The ministry would also periodically evaluate the progress of the opening to determine possible precautionary measures and determine the pace at which future opening-up should proceed, he said.
Under the ministry’s regulations, Chinese firms that purchase up to 10 percent of a public company’s shares, either through a lump sum investment or in a number of transactions, will be considered a “direct investor.” Such an investment must adhere to procedures set forth in regulations for Chinese investments.
As for Chinese investment that is made possible via a third party or place, any investment in excess of 30 percent will be deemed a Chinese investment. A total capital investment that exceeds NT$80 million (US$2.4 million) will require the investor to reveal their financial statements to Taiwanese government agencies when requested, the ministry said.
It will take about a month for the ministry’s Investment Commission to review investment proposals submitted by Chinese companies or investors, Deng said, adding that it has yet to receive applications for investments in either Far EasTone Telecommunications Co (遠傳電信) or China Mobile Ltd (中國移動).
The latest relaxation will not allow for a Far EasTone-China Mobile deal or any other telecommunications investments proposed by Chinese investors, Deng said.
Other sectors that are still closed to Chinese investment include chip foundries, flat-panel display makers, solar energy companies and light-emitting-diode (LED) makers, he said.
China Mobile said yesterday it still “hopes” to complete its planned acquisition of a stake in Far EasTone, even after the Ministry of Economic Affairs said the telecommunications sector wasn’t open to investments by Chinese companies.
China Mobile’s views on its proposed investment in Far EasTone haven’t changed, the company said in a statement.
To date, accumulated Taiwanese investment in China is US$77.1 trillion, after the government allowed local businesses to invest in China in 1991, the ministry’s data showed.
In the first four months of this year, Taiwanese investment in China was US$22.2 trillion, down 39 percent from a year ago, a statistic that the ministry attributed to the global economic recession.
ADDITIONAL REPORTING BY BLOOMBERG AND DPA
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