Taiwan plans to lift ban on Chinese investments

The Taiwan government is planning to lift a ban on Chinese investment in Taiwan. Under the draft proposal, a company with Chinese ownership of less than 50 percent would be allowed to invest directly in Taiwan similarly to any other foreign investor. Above that level, the company would be considered a Chinese owned company and would be subjected to greater restrictions, the Apple Daily reported.

Even wholly owned Chinese companies would be allowed to invest in certain Taiwanese industries or in joint-venture partnerships with a Taiwanese company. An Economics Ministry official quoted in the Apple Daily noted that “after the proposed relaxation, even Chinese national enterprises can invest in Taiwan.” Chinese investment in industries such as solar energy, automobiles and wind power will be welcomed.

Due to national security concerns, mainland companies will not be able to invest in Taiwan’s national defense, certain monopoly businesses or sensitive high-tech areas. Restrictions will also apply to the financial and telecommunications sectors because of the need to modify laws and regulations, and the complicated review process among government agencies.

Business leaders and academics welcome the plan, saying that the two sides should engage in mutual investment now that relations across the Taiwan Strait have thawed somewhat. Cross-strait investments will be one of the main topics on the table when the Straits Exchange Foundation (SEF) and the Association for Relations Across the Taiwan Strait (ARATS), that represent Taiwan and China respectively, meet in Nanking (China) at the end of April.