China investment rules made stricter

This article was published by the Taiwan Headlines on March 23, 2006. It reports that starting on June 30, 2006, all China-bound projects exceeding US$20 million or involving sensitive technology will be required to go through a more rigorous approval process. The new policy is to ensure that cross-strait economic and trade relations are positive for Taiwan's economy.

Under the new policy, companies that are planning large-scale investments or transfers of key technology to China will have to increase their investment in Taiwan in proportion to their China-bound investment. They will also have to explain clearly what kind of technology they are planning to transfer. In general, all Taiwanese investors will have to sign an agreement with the government to allow for future inspections, in order to determine whether their operations in China are in compliance with Taiwanese regulations.

Currently, the Investment Commission under the Ministry of Economic Affairs is responsible for approving China-bound investments. All investment projects submitted after the end of June 2006 will have to comply with the new policy.

Meanwhile, regarding tourism exchanges, the government in Taiwan will seek to ink more memorandums of understanding in order to regulate capital flows in and out of the nation. In recent years Taiwan has already signed such memorandums with 18 countries, including Italy, France and the United Kingdom. The government will enter negotiations with China in 2006.