Six-decade ban on mainland investors lifted
Taiwan lifted its six-decade-old ban on mainland investors yesterday by opening up 100 manufacturing and service sectors in a bid to spark its sagging economy.
The move is part of Taiwanese President Ma Ying-jeou's efforts to normalise economic links with the mainland, which he launched after taking office in May last year.
The pro-independence camp, however, said the move would result in the mainland controlling Taiwan's economy in the future and would hurt local industries, which would face tough competition after mainland investors acquired their technologies.
The deputy minister of economics, John Deng Cheng-chung, said mainland investors would be allowed to invest in 64 categories of local manufacturing industries, 25 categories of local services and 11 categories of infrastructure projects.
'Beginning July 1 [today], interested mainland investors can apply to the Investment Commission for investments in the 100 sectors,' Mr Deng said.
The categories opened for mainland investors are less sensitive sectors, ranging from textiles and plastic industries to computer components, mobile phones, car making, peripheral and ground facilities of air and sea ports as well as development of commercial ports and resort hotels.
'For key industries like hi-tech and services like first-category telecommunications, they remain barred,' said Mr Deng, ruling out mainland investors' hopes in the foundry and flat panel display industries as well as China Mobile's plan to buy a 12-per cent stake in Taiwan's third-largest telecom operator, Far EasTone.
Mr Deng said mainland investors were allowed to invest only in the second-category telecommunication industry, related only to reselling and value-added communication services. Even so they are not allowed more than 50 per cent.
He said Taiwan also banned nine business institutions and their subsidiaries that are controlled by the People's Liberation Army from investing for security reasons. Other mainland investors are also not permitted to invest in businesses or services that would result in monopolising the local market in Taiwan.
While investors are allowed to invest in local stocks, they cannot hold more than 10 per cent of a listed company's total share value. They are permitted to buy offices and homes and build factories, but investments in local properties remain banned.
Taiwan's economy contracted by a record 10.2 per cent year-on-year in the first quarter of this year. Its one-way investments on the mainland are estimated to have exceeded US$150 billion. The official amount is US$77.1 billion.
