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Taiwan Relaxes China Investment Restrictions - 2001-11-07


With just days to go before both China and Taiwan join the World Trade Organization, Taiwan has announced it is relaxing restrictions on investment in China.

The Taiwan government is loosening restrictions on investment in China, as both sides of the Taiwan Strait prepare to enter the World Trade Organization later this month.

One of the most significant changes is the scrapping of a $50 million cap on individual investment projects in China. Future investment amounts are to be determined on a case-by-case basis.

The head of Taiwan's Mainland Affairs Council, Tsai Ying-wen, says the old investment policy is being replaced with one stressing "aggressive opening" and "effective management" of risk.

She says that direct investment in China will be allowed, and that review procedures on some investments in China will be simplified. Individual investors will be able to invest a total of $80 million in China, instead of the current $60 million.

The government of Taiwan President Chen Shui-bian has faced pressure from the business community to remove investment restrictions. At the same time, it tries to balance concerns about the island's increasing reliance on trade and economic ties with China.

Many companies have moved factories to China in the past few decades to take advantage of its lower costs.

Taiwan and China have been administered separately since a civil war ending in 1949. Beijing claims sovereignty over Taiwan.

As the island prepares for elections at the end of the year, opposition leaders have criticized the government for not improving ties with China.

The economic policy changes are part of a list of recommendations made last summer by a panel of business leaders selected by President Chen.

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