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China Times: Why foreign investors are not coming to Taiwan
Central News Agency
2014-01-23 11:53 AM
According to the 2014 Index of Economic Freedom released by the U.S.-based Heritage Foundation, Taiwan's ranking is up three notches from last year to reach 17th, the best showing ever achieved by the country. Over the past five years, Taiwan's ranking has risen 18 places, which demonstrates that the country's efforts to promote economic liberalization have shown results. With such great improvements, then, why has Taiwan's attraction to foreign investors not increased? Why are Taiwan's foreign indirect investment inflows lagging significantly behind its main competitors in Asia, with the country's overall economy remaining in a state of stagnation? Alderman Fiona Woolf, lord mayor of the City of London, who serves as the global ambassador for U.K.-based financial and business services, made penetrative comments on the issue during a recent visit to Taiwan. Woolf said Taiwan's regulations for the financial industry are too strict and that without food services and products, Taiwan will be difficult to place itself as an offshore Chinese yuan center. She suggested that Taiwan liberalize its financial services to put itself on par with other financial centers around the world. Foreign investors in Taiwan are generally critical of the lack of clear rules in Taiwan, with government agencies using too much administrative discretion. Companies are often investigated on suspicion of having Chinese capital. The review process for applications to launch new financial products usually takes over six months, and these applications are often rejected. On a proposal to include the financial industry in the free economic pilot zone project, the central bank has set down "three noes." It requires that the services provided within the zones cannot involve Taiwan dollar-denominated products, derivatives linked to Taiwan's interest and exchange rates, or Taiwan-dollar investment portfolios. With all these restrictions, how can financial services develop? Why would investors come to Taiwan when they can put their money in Hong Kong and Singapore? All the problems mentioned above are impeding Taiwan's progress and costing Taiwan opportunities. Taiwan's sluggish economy was not formed in a day. (Editorial abstract -- Jan. 23, 2014) (By Y.F. Low)
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