Taipei (AsiaNews/Agencies) – Taiwan lifted a six-decade-old ban on mainland investors yesterday by opening up 100 manufacturing, service and infrastructure sectors. This has sparked criticism from Taiwanese nationalists who believe that the decision would result in the mainland controlling Taiwan's economy and local industries would face tough competition after mainland investors acquired their technologies.
In order to allay such concerns the current Taiwanese government said that mainland investors would be allowed to invest only in less sensitive sectors like textiles, plastic, computer components, mobile phones, 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 Taiwan’s Deputy Minister of Economics John Deng Cheng-chung.
However, on the long run as mutual trust and cooperation grow Taiwan is expected to lift all restrictions.
In the meantime nine business institutions and their subsidiaries that are controlled by the People's Liberation Army are banned 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 however permitted to buy offices and homes and build factories.
All this is happening after decades of tensions between Taiwan and China began easing following current Taiwanese President Ma Ying-jeou took over. Elected in May 2008 he abandoned his predecessor’s pro-independence stance.
Now the two countries are trying to renew ties, especially in the economic field. For Chinese companies Taiwan is a market that offers many opportunities. For the island Chinese investments are a key to lift its economy out of the doldrums after it contracted 10.24 per cent in the first quarter of this year.
By contrast, the island’s benchmark stock index rose 23.4 per cent over the same period on speculation that closer ties with the mainland will aid the economy.
In the first four months of this year, Taiwanese investment in China was US$ 22.2 trillion, down 39 per cent from a year ago, a statistic that Taiwan’s Ministry of Economic Affairs attributed to the global economic recession.