TAIPEI: "The Ministry of Economic Affairs" (MOEA) remained tight-lipped yesterday on whether the government would lift restrictions on Taiwanese hi-tech investment on the mainland and said there is no timetable for such a move.

Responding to media reports the day before that the MOEA will conditionally allow TFT-LCD display panel makers and semiconductor industries to widen investment on the mainland, economics chief hih Yen-shiang said it is inappropriate for him to make any disclosure before the plan is finalized and approved by the Executive Yuan.

Shih, however, gave the assurance that the MOEA has proposed only liberalization measures that will be beneficial to Taiwan's long-term economic development.

"All factors, including Taiwan's priorities, globalization strategy, domestic employment and wage structures, were studied meticulously before the liberalization plan was proposed," he noted.

MOEA officials were quoted as reporting Sunday that restrictions on manufacturing operations of large TFT-LCD display panels are expected to be lifted, but the measure will exclude top technologies owned by specific companies, such as the 10th-generation TFT-LCD display manufacturing technology of AU Optronics Corp, one of the leading flat panel manufacturers in Taiwan.

The restrictions on the establishment of eight-inch silicon wafer foundries on the mainland using Taiwan's 0.18-micron process technology will be lifted across the board, but investments in more advanced technology at the 0.13-micron level and above will still be banned, MOEA officials said.

Other major aspects of the deregulation package include semiconductor testing and packing technology, naphtha cracking plants, semiconductor IC design and infrastructure development projects, according to the MOEA.

According to the Liberty Times yesterday, the Ma Ying-jeou administration's swift deregulation of Taiwan's hi-tech industry to allow Taiwanese companies to head west to the mainland will imperil the island's nascent economic recovery.

In the face of a high unemployment rate, dwindling wages and shrinking tax revenues at home, the government's imminent lifting of restrictions on investments on the mainland by Taiwanese hi-tech manufacturers is triggering a new wave of capital exodus and will cause a "sudden freeze" in the domestic economy, the daily said.

China Daily/CNA

(HK Edition 12/29/2009 page2)