Taiwan minister

Taiwan minister
heads for KL
to boost trade
ties with ASEAN

Agence France-Presse
Taipei

Finance minister Lin Yi-fu left for Malaysia here Sunday as part
of Taiwanese efforts to enhance economic ties with Southeast Asia
following ASEAN and China's agreement to form a free trade area,
an official said.

Lin will first fly to Penang, a key Taiwanese investment base
in Malaysia, and then on Tuesday move on to Kuala Lumpur where he
will hold a ministerial-level meeting on trade and investment
issues, an economic ministry official said.

"It is the economic ministry's second fact-finding group this
year to explore Southeast Asia's investment climate after the
government renewed the 'go south' policy," the official said,
adding that they last visited the Philippines in October.

The "go south" policy, initiated by former president Lee Teng-
hui, aims to diversify Taiwanese investments from China to
Southeast Asia.

Taiwan is Malaysia's third biggest foreign capital supplier,
with accumulated investment running up to US$9.2 billion,
according to ministry data.

After wrapping up his Malaysia visit, Lin will fly on to
Thailand to exchange views on how to improve trade and investment
between the two countries, the official said.

As the third biggest foreign investor in Thailand, Taiwan has
funneled $10.5 billion in various investment projects there.

The trips follow a historic agreement forged by Chinese Prime
Minister Zhu Rongji and Southeast Asian leaders to create the
world's biggest free trade area embracing 1.7 billion people and
two-way trade worth $1.2 trillion.

The free trade area should be completed in 2010 between China
and the six original members of Association of Southeast Asian
Nations (ASEAN) -- Brunei, Malaysia, Indonesia, the Philippines,
Singapore and Thailand and eventually create a trade area with an
economy worth almost two trillion dollars.

Taiwan President Chen Shui-bian earlier this year recommended
that Taiwan, the US and Japan forge a regional free trade
alliance to diversify the island's overseas projects, which were
focused on rival China.

The president said free trade pacts between the three major
economies could help check Taiwan's capital flow to China, which
is fast emerging as a "magnet" to those looking for investment
opportunities around the world.

Taiwan has been ruled separately from mainland China since the
end of the Chinese civil war in 1949.

The communist government in Beijing considers the island an
inalienable part of its territory, and has repeatedly threatened
to use military force to re-take the island if it moves toward
full independence.