Taiwan: Republic of China - interview on foreign investment and business climate with government representative Mou-Shih Ding - Special Advertising Section - includes related articles - Interview

Nation's Business, Oct, 1994

The Office of the U.S. Trade Representative has recognized our efforts in this regard by removing Taiwan from its Priority Watch List under the Special 301 provisions of the 1988 Omnibus Trade and Competitiveness Act.

In what industries would the ROC government especially like to attract foreign investors? What's behind those choices?

I am pleased to say that U.S. business is already heavily involved in the fields of pollution control, automated production equipment, computers, telecommunications, household furnishings and appliances, transportation, high-tech instruments, petrochemicals, and processed foods. We would be happy to see even more U.S. involvement.

As I noted, we are currently implementing our Six-Year National Development Plan, which consists of 632 projects. We are particularly interested in attracting foreign investment in the areas of transportation and communication, environmental protection, energy, and medical care. In fact, these are four areas in which the U.S. is very competitive.

Of the total budget for the sixyear plan, nearly one-third, or $72.2 billion, will be spent on transportation and communication projects. Energy-related projects will account for 9.6 percent, or $20 billion, and environmentalprotection projects for 4.3 percent, or $9.6 billion.

We have also set aside $2.46 billion for improving medical-care facilities and services.

Bythe end of 1992, some 30 U.S. companies had won nearly $1.2 billion of six-year-plan contracts in Taiwan. We hope to see a continuation of these trends.

The ROC is among the world's richest nations and has many very economically healthy companies. Where are these Taiwan companies investing now, and is there opportunity for U.S. investors to piggy-back?

ROC businesses have established extensive economic links in Malaysia, Thailand, Indonesia, Vietnam, the Philippines, and mainland China. Trade between Taiwan and Thailand, Malaysia, Singapore, Indonesia, and the Philippines topped $16.7 billion in 1993, with a $2.3 billion surplus in Taiwan's favor. These ties make the ROC extremely valuable to U.S. companies as a springboard for investing in the fast-growing Asia-Pacific region.

In 1993, we were the world's second-largest investor in mainland China. Our estimated cumulative indirect investment in the mainland is between $6 billion and $10 billion; annual indirect trade between Taiwan and mainland China is estimated at $15 billion. Though the level of economic exchanges remains high, many companies are finding that investing in mainland China carries significant risks.

Mainland authorities have not been able to protect Taiwan investments adequately. In March of this year, 24 tourists from Taiwan were murdered at the Thousand Island Lake resort. Mainland authorities have yet to clarify this incident in a satisfactory manner.

There are indications that Taiwan investments may be slowing down as a result of these concerns.

As a counterweight to the heavy investment in the mainland, the ROC government is encouraging businesses to "Go South" and invest in the fast-growing economies of Southeast Asia. The ROC already is among the top sources of foreign investment in this region.