Taiwan liberalises some links with China

Taiwan’s government on Tuesday announced moves to liberalise cross-Strait economic ties with China, lifting key restrictions on semiconductor technology investment and on business travel to the island by mainland nationals.

The measures, to be implemented within a month, meet longstanding demands by local and foreign businesses and follow an economic reform conference last week that appeared initially to have failed to produce a strong mandate for deregulation.

The Taiwanese government said the Ministry of Economic Affairs would allow investment by Taiwanese chipmakers in China to include 0.18 micron technology, a mainstream production technology that most Chinese semiconductor companies have already acquired but Taiwanese have until now been banned from using on the mainland.

Restrictions governing business travel of Chinese citizens to Taiwan will be “greatly relaxed”, with multinational companies allowed to bring Chinese employees to Taiwan for work or training, said Joseph Wu, the administration’s top China policy official.

Currently, Chinese nationals who intend to visit the island on business can only come in groups of fewer than 30, and the authorities take several months to approve visas. Foreign companies say these onerous procedures are one reason for the shrinking foreign business presence in Taiwan.

Mr Wu said Microsoft, the US software group, was considering holding a regional event in Taiwan and bringing up to 300 Chinese, and that the government would relax the regulations to meet such requirements.

Reform of Taiwan’s overall cap on mainland investments would take more time but was also planned, he said.

The restriction, which in 1997 replaced a total ban on investment in China, has become one of the heaviest burdens on the island’s corporate sector but has failed to limit companies’ dependence on the mainland.

More than 70 per cent of Taiwan’s outward foreign direct investment last year went to China.

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