BEIJING (Reuters) – China’s largely rubber stamp parliament revised a law on Saturday to simplify investment procedures for Taiwan companies, in another attempt by Beijing to show goodwill to the Chinese-claimed island ahead of elections there on Jan. 11.
China, with its 1.3 billion people, is Taiwan’s favourite investment destination with Taiwan companies investing more than $100 billion there since China began landmark economic reforms in the late 1970s, drawn by a common culture and low costs.
China has extended what it views as olive branches to Taiwan in the run-up to the election, including opening further sectors to Taiwanese investors, with the ultimate goal of enticing the island to accept Beijing’s control.
Taiwan’s government has warned against falling for China’s inducements and has called on China instead to grant its own people democracy and freedom of speech. China has never renounced the use of force to bring Taiwan under its control.
The revised law removes several layers of bureaucracy to simplify procedures for investment from Taiwan, with the aim of encouraging more of it.
China is Taiwan’s top trading partner, with trade totalling $226 billion in 2018. Taiwan runs a large trade surplus with China.
Taiwan has been trying to wean itself off its reliance on China and to encourage Taiwan companies to come back home or to shift their investments to other parts of the world, notably Southeast Asia.
Taiwan’s economy has benefited from its firms moving manufacturing back to the island to escape higher tariffs from the China-U.S. trade war, though the dispute has also caused some disruption for Taiwan’s economy.
Source: Reuters
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