Privileges assured for Taiwan investors
( 2002-09-10 00:30 ) (1 )

Taiwan business people were reassured Monday that their preferential privileges in the mainland will not be undermined.

That was the message sent out by officials attending Monday's Taiwan Merchant Investment Forum at the ongoing Sixth China International Fair for Trade and Investment (CIFIT).

"We will protect the investors' legal rights and make our investment policies consistent and stable,'' reiterated Wang Liaoping, director of the Department of Taiwan, Hong Kong and Macao Affairs with the Ministry of Foreign Trade and Economic Co-operation (MOFTEC).

He also called for more Taiwan investors to take advantage of the mainland's superior business environment to invest more.

According to MOFTEC, 2,700 Taiwan-funded companies were set up in the mainland in the seven months to July this year, up 18 per cent from the figures for the same period a year earlier.

The actual utilized investment from Taiwan was US$2.1 billion during the period, registering a year-on-year growth of 28 per cent.

MOFTEC also said that by the end of July this year, 53,500 Taiwan-funded projects had been approved by the central government, with a total contracted investment value of US$60 billion.

The thriving mainland market was so important to Taiwan's economy that the mainland has already overtaken the United States as the largest export destination for the island's products. Taiwan has become mainland's fourth largest trading partner.

The trade across the Taiwan Straits last year stood at US$32.3 billion.

In the first seven months of this year, the figure topped US$23.5 billion, up 33 per cent compared to the figures for the same period of last year.

"It is expected to reach US$40 billion by the end of this year,'' Wang said.

"That shows that Taiwan's economy is closely integrated with the mainland market,'' said Li Fei, a professor of the Taiwan Affairs Institute of Xiamen University.

"Hence, the `three direct links' are an imperative issue for cross-Straits' economic co-operation, which is vital for the island's current and future economy,'' he said.

"Political disagreement should not be allowed to become a barrier to trade between the two sides,'' Li said.

The delay of the long-awaited "three direct links'' in mail, trade and shipping services is a result of political factors, he said.

Most recently, Chen Shui-bian's "one country on each side'' remark on August 3 has again stirred up cross-Straits tension.

"Chen's remark was not supported by the majority of Taiwan people,'' said Chen Chien-nan, president of the Taiwan Merchant Investment Association in Fuzhou.

He said that it was very important for both sides across the Straits to maintain a stable economic partnership.

"I don't think Chen's advocates will have any influence on Taiwan investors who are eyeing the mainland market,''Chen said.

"It is mutually beneficial for the two sides to co-operate with each other, and I'm happy to see economic co-operation between the two sides moving ahead step by step,'' he said.

As for Chen Shui-bian's encouraging more investment in Southeast Asian countries such as Malaysia and Singapore, Jason Huang, deputy secretary-general of the Taiwan Merchant Association in Shenzhen, said: "Investors go to the places where they can make a profit and where there are good prospects for long term development.''

MOFTEC official Wang Liaoping said the restrictions put on the mainland products by the Taiwan side have caused a great loss for the mainland.

According to him, the trade deficit with Taiwan was US$22 billion last year. The figure for the past two decades has accumulated to a total of US$1.17 trillion.

"Both sides' entry into the WTO has laid a sound foundation for our further co-operation,'' Wang said.

"Non-discriminative and free trade policies should be put in full swing,'' he said.

"Regional co-operation is an inevitable trend and more free and fair trade will benefit people on both sides.'' said Hu Jingyan, director of the Foreign Investment Department of the MOFTEC.

He also said China encourages more overseas investors to invest in China, in compliance with the Foreign Investment Directive issued in April this year.

The opening of service sectors, the logistics and service trade sectors in particular, has been highlighted to attract more overseas investment.

"As for mergers and acquisitions, related laws and regulations are being drafted and expected to be unveiled this year,'' Hu said.

"We won't change our preferential tax policies to attract overseas investment for a long time,'' the State Taxation Administration announced Monday.

"Although there are some taxation differences between domestic and overseas companies at present, the system is bound to become modernized to accord with international practices,'' he said.