Taiwan has invested USD 40 billion in China

January 20, 2005

Taiwanese businesses initiated 32,990 investment projects in China from 1991 to the end of November 2004, for accumulated investments of USD 40.4 billion, according to figures released by the MOEA Investment Commission. What's more, from 2002 to November 2004, over half of Taiwan's foreign investment went to China, making China the number one destination for Taiwan's foreign investment.

In 2004 up to the end of November, the Investment Commission approved 1,839 investment projects with a combined value of USD 6.16 billion in China.

Over the last four years the five places most popular among Taiwanese businesses for investment in China have been the provinces of Jiangsu, Guangdong, Zhejiang, Fujian and Hebei. The five sectors attracting the greatest amount of Taiwanese investment have been electronics manufacturing, basic metals manufacturing, chemical products manufacturing, plastics products manufacturing, and precision instruments manufacturing.

Taiwan's government has placed certain restrictions on investment by Taiwanese enterprises in China so as to prevent an excessive outflow of capital and high-tech know-how. The only high-tech industry Taiwanese businesses are presently permitted to invest in is the integrated circuit industry. As for the TFT-LCD display industry, the MOEA only allows Taiwanese companies to invest in low-tech molding work and assembly in China; investment in display panel manufacturing is not permitted. Taiwan also remains cautious about letting the petrochemical industry invest in the construction of light oil refineries in China, and has yet to approve such an investment project.

The MOEA says it applies three main principles in the evaluation of investment projects in China. A project is more likely to receive approval if it boosts Taiwan's competitiveness and improves its global logistics management capabilities. Investment restrictions are not enforced if an enterprise has no room for further development within Taiwan and investment in China is the only option for continued development. However, if the MOEA determines that even a small amount of core technology will be transferred or leaked, it will apply its most stringent approval evaluation standards.

(Central News Agency)

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