Taiwan business sees high risk to invest in mainland China

Asian Economic News, July 22, 2003

TAIPEI, July 15 Kyodo

A group of mainland-based Taiwan business people warned Tuesday that risks of investing in China will increase in years to come if the country fails to improve public security as well as its shoddy judicial system.

The meeting, attended by some 50 representatives of enterprises currently doing business in mainland China, follows the death of four Taiwan people in late June, including a three-member family in Shanghai and a single young man in Guangdong Province, who were believed murdered by local gangsters.

''We are here to share some of our own experiences so that people will not misjudge the situation in such an enormous market, where we think risks are still high if the social order does not improve,'' said Kao Wei-bang, a Shanghai-based entrepreneur who initiated the meeting after hearing about many mishaps and complaints.

''Besides life-threatening issues, some dirty tricks that have happened to many Taiwanese victims for the past decade when dealing with local officials should also be taken very seriously,'' he said.

Pao Yang-po, deputy chairman of Taiwan Business Association in Chongqing of Sichuan Province, claimed the biggest mistake he made throughout his life was to begin his real estate business in China 10 years ago.

''I have spent the past seven years filing lawsuits against many local residents who see rules, credit or promises as nothing,'' he said, echoing sentiments of others who asked not to be identified.

''If you are naive enough to believe the judicial system will stand by those who abide by the law, you are so wrong because most of the time local officials not only take bribes but also take sides and treat Taiwan people badly,'' Pao said, noting that many Taiwan people have even been jailed.

According to official statistics, up to 57,000 Taiwan enterprises have set up shop in China.

However, given that China still regards the island as part of its territory, Taiwan businesses are governed only by Law on the Protection of Investment of Taiwan Compatriots instead of other international laws.

''Many Taiwan business people have suffered from great losses in view of the domestic law which can be interpreted differently or modified any time by local governments,'' lawyer Wu Shi-tze told the group.

''Maybe we should forget about the belief that people on both sides share the same language and culture and hence understand each other easily,'' Wu said.

The only government representative in charge of cross-strait affairs present at the meeting merely suggested that Taiwan business people should learn how to better protect themselves and also collect more information before embarking on trips to the mainland.

''Unfortunately, many disputes will not be settled if China decides not to reopen negotiations with Taiwan,'' said Liu Te-hsun, deputy chairman of the cabinet-level Mainland Affairs Council.