Protection of technology urged

This article was written by Shih Ying-ying and published by the Taiwan Journal on February 17, 2006. It reports that according to officials from the Mainland Affairs Council, it has now become necessary to manage investments in China in order to protect Taiwan's hard-earned technological expertise from hemorrhaging across the Taiwan Strait.

In recent years, Chinese authorities have been asking Taiwanese investors to introduce new agricultural strains and technologies to southeastern China's Fujian province, in order to accelerate the region's economic development. Officials in Taiwan warn that such an approach would allow China to gain access to several cutting-edge agricultural technologies and eventually completely destroy Taiwan's agriculture.

Official statistics show that Taiwanese investment in China is currently estimated at US$50 billion. However, statistics compiled by the semi-official Straits Exchange Foundation show that the investments amount to US$150 billion, while other analysts put the real number somewhere in the US$280-billion range. This is despite the fact that the profits of China-based Taiwanese businesses have declined by 30 percent over the past three years.

Taiwanese businesses are urged to consider diversifying their investments in emerging markets such as India, Vietnam and Mexico. Taiwanese companies should also consider their investments in China carefully, as issues such as trade and transport policies and the protection of intellectual property rights are still in need of negotiation between the two sides.