Taiwan investors in RI warned of China

Taiwan investors in RI warned of China

TAIPEI, Taiwan (AP): Officials warned Taiwanese investors in turbulent Indonesia yesterday against moving their money to China, saying the Asian giant's economy was on shaky ground.

Defending a policy of limiting Taiwanese investment in its hostile neighbor, Lin Chong-pin, vice chief of the Cabinet's Mainland Affairs Council, urged investors to "think hard" before moving their money to the mainland.

"The Chinese economy is entering a period of uncertainty," Lin said. "Investors need to consider the situation there... especially exports and growth rates."

Southeast Asia and China are the two largest recipients of Taiwanese investment, and the warning has political overtones.

China considers Taiwan a renegade province subject to being reincorporated by force. Taiwan limits certain investments to prevent the island nation from becoming captive by allowing its economy to become too dependent on the mainland.

The Indonesian crisis is expected to prompt a pullout from Indonesia by some Taiwanese investors and cause others to look elsewhere for new projects. Taiwanese who have invested more than US$13 billion in Indonesia have been panicked by last week's rioting in which 500 people were killed.

The Foreign Ministry has encouraged Taiwanese in Indonesia to return home until the unrest dies down. News reports say those remaining have set up patrols and barricades around their residences.

Taiwan has promoted investment in Indonesia and other Southeast Asian countries as an alternative to China, where Taiwanese have invested up to US$30 billion.

And the government has earmarked US$1.2 billion to shore up Taiwanese investments and help Southeast Asia weather the crisis in currencies and markets that struck last year.

However, Taiwanese businesses have proved cautious on Southeast Asia. Their investment in the region fell 85 percent to US$11.6 million in the first three months of the year, the Economics Ministry said. Taiwanese companies have invested a total of US$37 billion in Thailand, Malaysia, the Philippines, Indonesia, Singapore, Vietnam and Cambodia.

At the same time, investment in China grew. The US$347.2 million invested in the mainland in the first three months of 1998 was a 26-percent increase over the same period last year.