Hong Kong and China lift investment in Taiwan
Easing of tensions across the strait in recent years sees an inflow of US$308 million in new investment, Taiwanese official tells seminar
Mainland and Hong Kong investments in Taiwan have soared over the past three years, albeit from a small base, as cross-strait political tensions have eased.
Since Taiwanese authorities permitted mainland investment on June 30, 2009, US$308 million had flowed in as of July 31 this year, according to Chen Guang-pi, director of the commercial division of the Taipei Economic and Cultural Office in Hong Kong.
There are 284 mainland investment projects in Taiwan in sectors such as banking, computers, electronics and wholesale goods.
Mainland investment in Taiwan surged from US$37 million in 2009 to US$94 million in 2010, dropping to US$43 million last year, but rebounding to US$133 million in the first seven months this year, Chen said at a Hong Kong General Chamber of Commerce seminar yesterday.
The mainland accounted for a tiny portion of investments, given that Taiwan hoped to attract NT$1 trillion (US$34 billion) of investments this year, excluding that of the Taiwan government, Chen admitted.
"We hope and believe Chinese investments in Taiwan will grow rapidly in future because cross-strait ties are getting closer," he said.
Last year, Taiwanese investment in the mainland rose 7.12 per cent to US$13.1 billion, a slower growth rate than 2010, Chen said. The mainland has become Taiwan's biggest overseas investment target, with US$111 billion flowing in from 1991 to 2011.
The Sino-Japanese tensions over the Diaoyu islands and historical baggage between Beijing and Taipei should not have a negative impact on cross-strait investment, according to Matt Chuang, executive vice-president of Bank SinoPac. "The Diaoyu islands crisis should bring Taiwan and China closer together," he said.
Mainland investments in Taiwan had been banned for decades due to Taiwan and mainland hostilities.
Meanwhile, Hong Kong investments in Taiwan jumped 137 per cent to US$400 million last year, while Taiwanese investments in the city grew 4 per cent to US$250 million, David Lie, vice-chairman of the Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council, said.
Hong Kong's exports to Taiwan jumped 24 per cent to US$11 billion last year, while imports from Taiwan grew 7 per cent to US$31 billion, Lie said, admitting the scale of trade and investment between Hong Kong and Taiwan was modest.
He hoped that within three years, Hong Kong and Taiwan would sign an economic co-operation agreement, with his council in discussions with the authorities in Hong Kong and Taiwan since last year.
By setting up Hong Kong-based companies or British Virgin Islands companies out of Hong Kong, Taiwanese firms could get around mainland restrictions on Taiwanese investment, Lie said. "Hong Kong financing is very convenient," he added.