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Saturday, February 05, 2000, updated at 21:37(GMT+8)
Business Taiwan Investment into Mainland Drops; Foreign Investment in Taiwan Increases

According to Taiwan's Investment Commission under the Ministry of Economic Affairs, Taiwan businessmen invested US$12.52 billion into mainland China in 1999. Taiwan investments into the electronic and electrical appliance industry reached US$5.37 billion, accounting for 43% of the total investments.

The statistics show that the US$12.52 billion Taiwan invested into China last year was US$2.66 billion or 17.54% less than 1998. Taiwan invested US$15.19 billion into China in 1998.

Some analysts think that the drop in investments from Taiwan could be related to the Asian financial crisis.

Investments into the mainland's electronics and electrical appliance industry reached US$5.37 billion in 1999, a 17.7% decrease compared with the year before. The main reason is because factories in Taiwan have cut the cost of capital, increasing their international competitiveness.

But, foreign and overseas Chinese investment in Taiwan increased 16% in 1999 compared with the previous year. This was the second highest increase since the government began allowing investment from abroad.

According to the IC statistics, the government approved 1,068 foreign and overseas Chinese investment projects in 1999, worth a combined total of US$4.185 billion. These figures represent a 16.34% increase in the number of projects and a 27.03 percent increase in the total value of investments from 1998 figures.

The statistics showed that a total of 683 foreign and overseas Chinese investment projects with a total value of US$4.3 billion were approved in 1997, hitting a new record high at the time. The figure represented a 73% increase over that of 1996.

The IC said the main reason why foreign and overseas Chinese investment in 1999 was so brisk was the government's large-scale loosening of restrictions on foreign investment in the local financial and insurance sectors and in the services and telecommunications industries in a bid to join the World Trade Organization as soon as possible.

The growth rate in the amount of foreign and overseas Chinese investment in Taiwan in 1999 was highest in the telecommunications industry. The official figures showed that the amount of foreign and overseas Chinese investment in the local telecommunications industry in 1999 was US$294 million, representing an increase of 501.13 percent over that of the previous year.

Meanwhile, Taiwan's electronics and electric appliance industry was still the most attractive to foreign and overseas Chinese investment. A total of US$1.033 billion worth of investment projects in this industry was approved last year, accounting for 24.69% of the total amount invested in Taiwan.

The IC's figures also showed that a total of 104 foreign and overseas Chinese investment projects worth a total of US$674.06 million were approved in December 1999.

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