The China Post Staff
Easing current restrictions on cross-strait investment will not solve existing problems haunting business ties across the strait once and for all, Taiwan’s top economic planner said yesterday.
“We will be less hesitant to remove the ‘no haste, be patient’ policy if Beijing is willing to openly denounce any attempts that will put Taiwan’s economy in an unfavorable position,” said Chen Po-chih, head of the island’s Council for Economic Planning and Development. The policy bans investments in the mainland’s infrastructure projects or any single investment plans exceeding US$50 million.
Chen asked Beijing not to engage in unfair competition that will on the one hand hurt Taiwan investors’ interests, and on the other hand sap foreign capital from Taiwan. The economist was speaking to a seminar on financial and economic relations between Taiwan, mainland China and the United States.
In the same tone, Chen Shih-meng, deputy governor of the central bank, said that there should be certain restrictions on cross-strait investment so as to ensure Taiwan’s economic position. While many local companies are enthusiastic about a removal of the “no haste, be patient” policy, the two officials’ remarks undoubtedly doused hopes that the policy relaxation will come anytime soon. The council’s Chen said the policy’s opening will promise no panacea to current problems surrounding trade and investment relations between Taiwan and mainland China.
“Theoretically or practically, it is unrealistic to expect easing the policy to solve all the trade problems between the two sides,” he said.
Giving an example, Chen said a local entrepreneur, whom he did not identify, has recently changed his notion that putting money in mainland China is better than investing in southeast Asian countries.
The business heavyweight, according to Chen, was previously obsessed with the thought that Taiwan people are smarter than mainland Chinese, and that investment in the mainland promised sure profits. In contrast, the entrepreneur believed that southeast Asian people are more cunning than mainland Chinese and are more difficult to control.
“But recently, he seemed to have changed his mind,” said Chen. The government, Chen added, has to take into consideration the implications for outflows of local resources and capital if the current restriction on trade with the mainland is scrapped. Although mainland China is undeniably a huge market, many of its policies are not transparent enough, thus putting Taiwan and the mainland in an asymmetric trade relationship.
Taiwan’s economic reliance on the mainland is far heavier than that of any other country, exposing the island to more risks that it may not be able to afford, he said.
Taiwan has been hesitant about opening itself to full-fledged business contacts with the mainland, worried that these could eventually hollow out the island’s limited capital pool. Beijing, in contrast, recently said it is already fully prepared for engaging in direct business and transport contacts with Taiwan, and asked the island to remove the “no haste, be patient” policy.