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SCMP Reporter

MAINLAND firms are unlikely to be allowed to make direct investments in Taiwan in the short term, the head of a Taiwan business promotion group says.

Chinese Economic and Trade Association chairman Kein Ting's comments came amid growing demand to lift the investment barriers against mainland firms keen to enter Taiwan.

Taiwanese firms have been allowed to invest in China but mainland firms have been denied direct investment access to the island.

'From our point of view as a non-government organisation, we will be happy to see economic and trade co-operation at a deeper level,' Mr Ting said.

'This kind of co-operation definitely has its own merits.

'But looking objectively, there is concern in Taiwan that its safety will be affected if there is not a limit on mainland investment in Taiwan, given its geographical size and population.' Taiwan stipulates that mainland firms can invest in Taiwan indirectly through foreign intermediaries, but the mainland interest in the intermediate organisations cannot exceed 25 per cent.

Mr Ting said that even so, there had been few such investments.

He said it would take time for the relevant laws to be changed to allow a relaxation of controls over mainland investment in Taiwan.

Recent tense relations across the strait had dealt a blow to the confidence of Taiwanese business in investing on the mainland, Mr Ting said.

This contributed to a huge slide in the growth of Taiwanese investment on the mainland, already affected by practical problems including land use rights, arbitrary collection of fees, and safety of businessmen and their property.

'Politics has been a consideration but it is not the single most important factor,' Mr Ting said.

He was speaking after a press conference on the First Pacific Chinese Traders Convention, to be hosted by his association in December.

Mr Ting said he hoped the annual event would promote greater economic co-operation among all Chinese people.

The organisers were mainly from Taiwanese organisations, although some mainland companies, economic and trade organisations were also invited.

The convention, including seminars and a trade fair, was to be held in Macau and Hong Kong on December 6 and 7.

Mr Ting said Macau was selected as one of the locations to coincide with the opening of the Macau airport.



Keep trade limits, says business chief