Mainland policy aims to retain competitiveness

The China Post staff

The “go slow, be patient” policy is not intended to ban industries from going to the mainland, but is a defensive measure to prevent Taiwan’s competitiveness from being eroded, the island’s top mainland policy maker said yesterday.

Tsai Ing-wen, head of the Mainland Affairs Council, said yesterday the government has never forbidden Taiwan businesses from going to the mainland, nor has it strictly banned local companies from setting up factories there.

The restrictions stipulated under the policy, she said, apply only to listed companies, but not the old-economy companies.

The policy bans any Taiwan investments valued over US$50 million in major infrastructure projects on the mainland.

Tsai made the remarks during a trip to a group of business people in Kaohsiung, addressing a groundswell call for the government to ease what many critics call an “over restrictive” policy.

Tsai said the government is “deeply concerned” about the potential damage to Taiwan’s economy if local capital floods out to the mainland.

“The government’s concerns are that once the restrictions are lifted, our economic dynamics and momentum will taper off quickly,” she said.

She added the government is now discussing measures to allow some high-tech industries to set up plants in mainland China.

Tsai said the government is deeply concerned that while only small and medium sized companies are migrating to the mainland now, high-tech companies and listed companies will follow suit some time in the future.

An exodus of local companies is dangerous for Taiwan before the island manages to develop a new industrial policy, she said.

The government has the responsibility to take care of the public, and is mulling over a series of measures to make sure Taiwan investors in the mainland will repatriate cash to the island.

Meanwhile, Tsai’s deputy, Lin Chong-pin, told a weekly press conference yesterday that the government would not rule out partially easing the ban on direct transportation across the Taiwan Strait if the relationship improves.

The mandatory elements to make this possible, however, are that Beijing must show sufficient goodwill and friendliness and must be willing to resume negotiations that have long been stalled.

Introducing direct transport links between both sides is an inevitable issue for Taiwan, but it requires due diligence, careful planning, and a friendly relationship to make it possible.