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.