China takes lion share of Taiwan's investment

China takes lion share of Taiwan's investment

TAIPEI (AFP): China is absorbing the majority of Taiwan's outbound investments despite Taipei's restrictions mainland investment, an official survey said on Monday.

According to the survey conducted by the economic ministry in the fourth quarter last year, 73.6 percent of 2,000 Taiwanese firms polled said they had invested in the mainland.

The ratio was 71.1 percent in 1998 and 69.1 percent in 1999 in similar surveys by the ministry, the paper said.

"More Taiwanese companies are moving to China in recent years because of its huge market potential and low-cost labor," the official said.

Meanwhile, local enterprises have been showing less interest in the Southeast Asian countries of Singapore, Malaysia, Thailand, Indonesia and the Philippines.

According to the survey, 23 percent of the polled companies said they had invested in the five Southeast Asian states, down 3.0 percentage points from an identical survey in the previous year.

Taiwan banned hi-tech investments and any venture worth more than US$50 million in China in 1996, following tensions associated with that year's presidential elections.

However, businesses have appealed for a loosening of the restrictions.

Taiwanese investment in China increased 21.3 percent year-on- year in the two months to February, totaling $443 million as more small- and medium-sized businesses moved their operations to the mainland, the investment commission said.

China-bound investment has been booming since Taipei allowed civil exchanges between the two rivals in 1987, and totals some $70 billion, according to the central bank.