Taiwan Authorities to Open Direct Taiwan Investment in Mainland

According to report from Taipei by People Online correspondents Yao Xiaomin and Wu Xia, on the morning of November 7, Taiwan "Administrative Yuan" adopted the executive plan for the "implementation of investment in the mainland, active opening, and effective management" put forward by the department concerned, formally liberalizing direct investment in the mainland and abolishing the investment ceiling of US$50 million. Thus far, the "no haste, be patient" policy, which had been in force for five years and was criticized and censured by domestic and overseas public opinions, formally came to an end in history.

The "no haste, be patient" policy was put forward by Lee Teng-hui at the Taiwan "administrators meeting" in September 1996, his aim was to block and cool down rising heat of investing in the mainland by Taiwan businessmen. Practice over the past few years has proved that this policy violates the economic law, goes against popular will and has thus aroused strong condemnation and opposition by Taiwan businesspeople and public opinions inside and outside the Island. In August this year, Taiwan "economic development meeting" reached a consensus on relaxing the "no haste, be patient", and adjusting the policy of investing in the mainland.

After the conclusion of the "Administrative Yuan" meeting, Taiwan "Mainland Affairs Council" chairman Tsai Ying-wen, "economic minister" Lin Hsin-yi, and "information bureau" director Su Cheng-ping immediately held a press conference at which they clearly explained matters about implementing the policy of "active opening and effective management" on investing in the mainland.

The main contents of the present policy adjustment are:

--Opening direct investment, there is no need for enterprises to set up a subsidiary company in a third place.

--Abolishing the regulation on the ceiling of accumulative total investment amount of US$50 million for individual case.

--Relaxing the ceiling of accumulative total investment made in the mainland by individuals and small and medium-sized enterprises, with 60 million new Taiwan dollars being adjusted to 80 million.

--Simplifying the classification of industries for investment in the mainland, the current "prohibition category", "permission category" and "category for special case check" were to be simplified into "prohibition category" and "general category". Those not belonging to the "prohibition category" can all go to invest in the mainland so long as they go through the procedures for individual case check.

--Relaxing control on the use of funds of listing and counter companies.

--Branches of international banking businesses are allowed to conduct direct banking business contacts with the mainland financial institutions and their overseas branches, with the mainland legal persons, organizations and other institutions.

However, this policy still contains various restrictions on the Taiwan business investment and uncertain factors, for example, high-tech industries and infrastructure construction enterprises going to invest in the mainland are placed under strict control; , the current regulations on the ceiling of accumulative total or proportion of investment made in the mainland by individuals and enterprises are still retained; establishing an investment trend regulatory mechanism, whereby the competent department will regularly or, when necessary, invite relevant organizations to examine and deliberate various factors, so as to decide where or not to readjust the standard for the accumulative total investment amount made by individual enterprises, etc.

Lin Hsin-yi disclosed that a plan will be worked out before December 31 this year for the policy of opening enterprises' direct investment in the mainland and will be put into effect on January 1, next year.

By People's Daily Online

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