By Richard Pearson, The China Post
In its 2001 White Paper released on Thursday, the American Chamber of Commerce in Taipei (AmCham) called on the government to continue efforts at making Taiwan’s financial market more open to foreign general and institutional investors.
AmCham’s 2001 White Paper, released to coincide with President Chen Shui-bian’s first year in office, outlined issues that the island’s most influential foreign business and lobbying group feels important to Taiwan’s continued economic well being and international competitiveness.
AmCham was especially concerned over the current registration procedures for Qualified Institutional Foreign Investors (QFII) that, it said, “remain complex and discourage investment.”
AmCham called for the eventual “replacement of the existing system with a unified system of registration for all foreign investors that would apply to both institutional and general foreign investors.” It said, however, that such a move should be preceded by a “once-for-all” system of registration to be adopted in the short term. Regarding the issue of securitization, AmCham praised the passage of the Trust Enterprise Law, the Financial Institutions Merger Law, amendments made to the Banking Law, and regulations relating to the establishment of asset management companies. The group also called for approval of additional regulations or modification of current ones to further develop securitization structures.
AmCham, however, criticized current professional licensing policies saying, “The (Capital Markets) Committee is discouraged that progress has not been made in liberalizing professional licensing requirements.” It called for licensing examinations to be given in English and recognition to be accorded to foreign experience and accreditation. AmCham was worried about the government’s ability to handle non-performing bank loans and bankruptcy reform. According to the white paper, authorities have not meaningfully addressed either of those issues, “both of which are of critical importance to a sound banking system.” It said that regulations that discriminate against foreign banking firms should be scrapped. “Foreign bank exclusion from regulatory permissions such as mini branch operation is inappropriate and does not serve Taiwan’s international image,” said the report. AmCham said that the onerous regulatory regime that built up during the decades of KMT rule has for years restricted international business.
Discriminatory regulations in the pharmaceutical industry were also met with criticism by the white paper, which said that significant roadblocks in the form of testing requirements and registration time lines stand in the way of foreign participants. It noted that current policies lead to higher prices for drugs in Taiwan.
Regarding the telecommunications sector, AmCham called on the government “without delay to formally implement its stated intention to increase the direct foreign share holding limit for Type I service operators.” It also called for the cap on direct and indirect foreign investment to be raised “to the greatest extent possible, and ultimately to 100 percent.” While recognizing President Chen’s goal of building a “Green Silicon Island,” producing a knowledge-based economy, and developing Taiwan as a global logistics center, AmCham said that all of these depend on the government’s ability to develop and improve the island’s business environment.