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.