Time 'not yet ripe' to lift capital ban

Taiwan's top mainland policy planning body yesterday said the time was not yet ripe for the Government to lift the ban on mainland capital, but a gradual removal would be inevitable after both Taipei and Beijing joined the World Trade Organisation (WTO).

'We have to consider the national security problem before allowing mainland capital funds to enter Taiwan,' said Fu Tu-cheng, economics director of the cabinet-level Mainland Affairs Council, at a public hearing in Taipei.

Mr Fu's comment came after the new deputy of the central bank, Chen Shih-meng, said the Government should allow a certain amount of mainland capital to flow into Taiwan for selected investment projects.

Mr Chen said investment from the mainland would contribute to Taiwan's security because investors there would be more concerned about the island's social stability and economic prosperity if their financial interests were tied to the island.

Mr Chen later revised his comment, saying such a relaxation should only be developed gradually. Mr Fu said opening the door to mainland capital would be inevitable once the island joined the WTO.

Taiwan, which has applied for WTO membership in the past decade, is expected to join the world body possibly early next year, depending on the progress of Beijing's bid. Most WTO members have agreed that Taiwan should join right after Beijing gains accession.