China Allows Taiwan Investors To Buy
State Enterprises
SHANGHAI, Dec 13, 1999 -- (Agence France
Presse) China on Monday announced detailed new
regulations on Taiwan investment that for the first
time allow investors from the island to acquire state
enterprises.
The rules -- which add detail to the 1994 Law on
the Protection of Investment of Taiwan Compatriots
-- took effect on Monday after being signed by
Premier Zhu Rongji, official media reported.
They specify that Taiwan investors "can purchase small state-owned
enterprises," the Shanghai News said.
An official with the Trade Ministry's department on Taiwan, Hong Kong and
Macau confirmed that the provision ends a blanket ban on state-sector
purchases by parties from Taiwan.
The regulations are part of a decade-long campaign by Beijing to improve
relations with Taipei by encouraging indirect trade and investment ties
between the two politically estranged sides.
While China maintains control over big, profitable state enterprises, it has
increasingly been seeking overseas capital to help overhaul smaller firms that
otherwise might face bankruptcy.
The new rules also specify that Taiwan investors can also take part in
development of state-controlled natural resources and purchases of stocks,
bonds and real estate.
Without providing details, reports said the regulations promise preferential
tax rates for Taiwan investors, especially for projects in China's relatively
backward central and western regions.
The rules also bar local governments from imposing higher fees on
Taiwan-invested enterprises than those levied from domestic firms.
The Trade Ministry must process applications for the establishment of
Taiwan-invested enterprises on the mainland within 45 days, they say.
More than 40,000 companies in Taiwan have poured an estimated 40 billion
US dollars into China for various projects.
The two sides have been governed separately since the end of a civil war in
1949, when Chiang Kai-shek's defeated forces fled to Taiwan to set up a
non-communist enclave. ((c) 1999 Agence France Presse) * * * * * * * * * * * * * *