Restrictions on foreign investment in Taiwan will see significant easing, said Premier Sean Chen today in response to President Ma Ying-jeou's National Day pledge that investment obstacles be cleared.
In the future, liberalization will be the norm and control will be the exception, Chen remarked. Labor restrictions will also be changed to reflect the times, so long as new investments are introduced and local employment increased. It is important to strike a balance between promoting investments and protecting labor rights, he added.
The premier commended the Ministry of Economic Affairs (MOEA) for its recent efforts in boosting inbound investments. Two weeks ago, 20 overseas Taiwanese firms indicated their willingness to invest NT$38 billion (US$1.27 billion) in Taiwan. A business conference held by the MOEA also attracted investments of NT$126.6 billion (US$4.22 billion) from foreign businesses. As for mainland Chinese capital, the MOEA will speedily relax limitations on the fourth wave of opening up to mainland investment.
The Council for Economic Planning and Development has recently rolled out plans encouraging Taiwanese businesspeople on the mainland to invest back in Taiwan. The Mainland Affairs Council (MAC) and the MOEA will help implement the programs simultaneously, said the premier.
Aside from the manufacturing industry, Chen said, it is imperative to draw investment to the service industry, particularly financial services. Although the renminbi (RMB) is not freely convertible in Taiwan, domestic financial institutions should not overlook its importance. In fact, the government has already assigned priority to developing cross-strait financial services in the Economic Power-Up Plan, including the creation of a Taiwan-centric wealth management platform for local residents as well as a cross-strait currency mechanism. The premier urged domestic financial institutions to ready themselves and take advantage of all business opportunities to catch up to Hong Kong and Singapore on this front.
Premier Chen also said those in the services and financial services industries should be more open toward the influx of overseas investments. If, for instance, the ceiling on mainland equity participation in Taiwanese banks were to be raised, it would be done so with both national security and interests in mind. A management-rather-than-restriction approach will be used to maximize benefits while controlling risks.
Further, the premier instructed the Financial Supervisory Commission (FSC) to pay closer attention to Hong Kong and Singapore, Taiwan's main competitors in the region. The FSC and related agencies were asked to study the possibility of listing "T-shares" (Taiwanese companies registered in mainland China and traded on the Taiwan Stock Exchange), similar to H-shares in Hong Kong: Would T-shares fuel Taiwan's capital market in the same manner? How would T-shares differ from H-shares? When RMB services become available, can T-shares be cleared in RMB as well?
Chen also pointed to the gold depository model used in Singapore: How would such an institute benefit Taiwan in light of the people's preference and the high-tech industry's need for the precious metal? The premier encouraged all agencies to stay open and positive toward the above issues.