Taiwan to curb Chinese investment in key sectors
Posted: 23 November 2009 1404 hrs

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TAIPEI: Taiwan plans to restrict Chinese stock investment in strategic sectors, as it seeks to keep control of its economy amid rapidly growing ties with the mainland, local media said on Monday.

Chinese institutional investors will be allowed to hold no more than a total of 10 per cent in listed companies in the telecommunications, aviation and finance industries, the Commercial Times reported, citing unnamed sources.

The paper also said the Financial Supervisory Commission will meet with relevant agencies soon to discuss what cap should be set on Chinese investments in less-vital sectors, according to the paper.

The report was published a week after Taiwan and China signed three landmark memorandums paving the way for growing cooperation in banking, insurance and securities.

The agreements, which will go into effect in January, will enable Chinese institutional investors to buy shares in Taiwan's stock market for the first time.

The announcement of the signing was met with criticism that Taiwan's government had acted too fast, without ensuring proper debate about the implications of the wide-ranging pacts.

In particular, the opposition Democratic Progressive Party, which favours formal independence from the mainland, has voiced concern that too close relations with China could cost the island its de-facto self-rule.

China and Taiwan have been governed separately since the end of a civil war in 1949, but Beijing still considers the island part of its territory, awaiting reunification.

However, relations have improved significantly since the China-friendly politician Ma Ying-jeou became president last year, with last week's memorandum being just one example of warming ties.

The Financial Supervisory Commission declined comment on Monday morning when contacted by AFP.


- AFP/so