More Than One Restriction Needs to Be Relaxed

More Than One Restriction Needs to Be Relaxed
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
July 16, 2008

Limits on mainland investment have been in place for over 11 years. This week, after Minister of Economic Affairs Yin Chi-ming reports to President Ma Ying-jeou, the Executive Yuan is expected to formally relax restrictions. The relaxation will be of considerable magnitude. This means the government is willing to lift restrictions, to give businesses more space, and to allow Taiwan to compete directly with the mainland. Such courage and self-confidence should be affirmed. Next, the government should ascertain Taiwan's role in the cross-Strait division of labor, and improve Taiwan's investment environment and competitiveness.

Even more importantly, in addition to relaxing restrictions and lifting limits on investment in the mainland, the government must change the mindset that imposed these controls and restrictions in the first place.

Government has basically confirmed that it will adopt its previous "regressive approach." The 40% ceiling for net business investments on the mainland will be relaxed to 60%. But businesses with operational headquarters on Taiwan will be exempt from any limits. This provision means that in practice most medium and large-scale businesses will be nearly free of all limits on maximum investment. Future restrictions on business investment in the mainland, will apply mainly to specific industries based on technology restrictions.

Cross-Strait investment policy over the past few years was the result of a series of links in a chain. Basically, high tech and other highly capitalized, large scale industries, were prohibited or restricted from investing in the mainland from early on. This includes the petrochemical, automotive, and semiconductor industries. Later on, after repeated appeals from industry insiders, they were gradually opened up. In terms of funding, the government used the regressive approach. The ceiling was set at 40% of total net worth. All restrictions and controls originated from concerns over capital outflows. They hoped that restrictions on enterprises would increase investment in Taiwan, and simultaneously prevent the mainland from acquiring Taiwan's capital and technology, from making rapid progress, and from posing a threat to Taiwan.

Over the past 10 years, these policies must be adjudged a total failure. They inflicted no damage upon the mainland, but enormous damage upon Taiwan. The mainland enjoyed rapid double-digit growth and progress. It received 50 to 60 billion US dollars a year in foreign direct investment. Its economy and technology has progressed to the point where it is already able to implement better environmental protection and labour conditions.

What about Taiwan? Did it benefit? Excessively harsh and unreasonable restrictions on certain types of investments led to a loss of mainland development and growth opportunities for Taiwan-based enterprises in the automotive, petrochemical, and semiconductor industries. Because the government lifted restrictions at a snail's pace, Taiwan-based businesses missed these precious opportunities. Instead, small and medium-sized traditional industries that the government never paid any attention to, were not subject to such limitations. They benefitted from the mainland's growth and became large scale enterprises.

The 40% restriction on total investment, hobbled the development of businesses on the mainland. Even the development of industries with no technological relationship to national security, such as department stores and the food industries, were strangled to death by these restrictions. Many Taiwan businessmen with successful developments on the mainland needed additional capital for expansion. . To raise this capital they had to list on the stock market. But due to the 40% ceiling on investments they could not list on the TAIEX. So they listed in Hong Kong, Singapore or on the mainland. Those who understand capital markets know that given today's globalization, wherever a business lists, that's where its roots are. Where it sets up factories is secondary. The government imposed a 40% ceiling on investments on the mainland, thinking it could force businesses to sink their roots on Taiwan. Instead, the result was everyone was uprooted, forced to go to Hong Kong, Singapore, and the mainland and sink their roots there. One link in the chain links to the next. Together they strangled these businesses to death. Taiwan's economy is now on life support. Capital markets have atrophied. What is such a policy, but the height of absurdity?

The government should also relax existing restrictions on various industries. Apart from a small number of industries and technologies that have a real impact on national security, restrictions on the rest should all be lifted. Frankly, we don't see how housebound bureaucrats, who sit in their offices, far from the marketplace, who have never had to compete for their survival, are qualified to make decisions on behalf of those fighting on the frontlines, competing in the global economy. Who are they do decide which investments or technologies may be transferred to the mainland, or that the time is not right for any particular investment. The government should not be so lacking in confidence. it should not assume that any relaxation will lead to a mass exodus. The government recently announced its intention to allow businesses to build 12" wafer plants on the mainland. The response of Taiwan manufacturers was that they would wait for the appropriate time to make any such investments. Obviously, these industries have their own considerations and timing.

Based on government's dismal record in "managing" business investments, and its controlling and restrictive mindset, we ought to say "No more!" The government should focus on rebuilding Taiwan's investment environment and enhancing its competitiveness. It must improve or upgrade the infrastructure, the government's administrative efficiency, the legal system, tax rates, human resources, and even the environment. If it does a good job, businesses will naturally want to stay.

For businesses, liberalization means they are no longer bound hand and foot. It means they have more opportunities, and also more challenges. Isn't that true for government as well?

中時電子報
中國時報 　2008.07.16
該鬆綁放寬者豈祇一項？
中時社論

　在經濟部長尹啟銘向總統馬英九報告確認後，綁住企業十一年以上的大陸投資金額上限，可望在本周行政院會中正式通過放寬鬆綁。這次放寬的幅度相當大，代表政府願意解除行政限制，給予企業更大的空間，同時也讓台灣的投資環境，直接面對與大陸的競爭，這種勇氣與自信，值得肯定。政府接著就要為台灣在兩岸分工互補中尋找定位，並全力提升台灣的投資環境與競爭力。

　而更重要的是我們必須強調，政府要鬆綁、放寬者，不祇是區區的一個投資大陸金額限制規定，更重要的是過去那種管理、管制、限制的心態，更要「放寬、鬆綁」。

　政府原則上已確定，過去以「累退方式」訂定、以企業淨值四○％為赴大陸投資金額上限之規定，將放寬為一律以六○％為上限；但對在台設營運總部的企業，則將不設金額限制。此一規定，在實務上，則是對大部分中大型企業而言，幾乎都可脫離投資金額上限的限制了。未來，企業赴大陸投資的限制，主要將是來自針對各產業類別、種類與技術層次的限制。

　回顧過去幾年的兩岸投資政策，幾乎是由一環扣一環的限制所構成。基本面上，對稍具技術性與資本較大之產業，早期幾乎全部列為禁止或限制類，如石化、汽車、半導體…等，後來在業者一再陳情下才逐漸開放；資金面上，對企業以累退方式計算，最高不得超過淨值的四 ○％上限。所有限制與管制，其基本出發點就是擔心台灣資金外流、期望藉著限制手段讓企業增加在台投資；同時也要避免大陸取得台灣的技術與資金而快速進步，對台灣造成威脅。

　冉冉十多年過去，這些政策的結果與效果，可說完全失敗。我們可以總結一句：未必損人卻必定不利己。大陸仍快速以兩位數的成長率成長與進步，每年從全球吸收了五、六百億美元的外人直接投資；整個經濟體與技術的進步已經到可以實施更好的環保與勞工條件。

　台灣呢？受惠了嗎？因為對投資類別過分嚴苛且不合理的限制，國內企業失去一個在大陸發展壯大的機會；從汽車、石化、到半導體等科技產業，全部都因政府限制與開放的牛步化，使國內企業坐失先機。反而有些政府從來不放在心上、未受到限制的中小型傳統企業，藉著大陸成長為大型企業。

　四○％的投資金額限制，則限死了企業在大陸的發展腳步，即使與技術層次、國家安全毫無關係的百貨、食品等產業，在大陸積極拓展之際，也被這個緊箍咒限死。而更嚴重者，許多在大陸發展有成的台商，在企業需要上市籌資以進一步壯大時，卻因四○％上限而無法回台上市，選擇在港、星或大陸掛牌。懂資本市場的人都知道，在全球化的今日，企業在哪裡掛牌，根就在哪裡，在哪設廠反而次要。結果是：政府訂四○％上限想逼企業根留台灣，結果卻是大夥連根拔起，跑去港、星、大陸生根了。一環扣一環，整死企業、也搞得台灣經濟奄奄一息、資本市場相對萎縮；這種政策，豈不荒謬？

　而當放寬金額限制之後，政府亦該同時大幅放寬現有各種產業類別之限制。除了極少數的確對國家安全有影響之產業與技術外，其餘限制全部都該解除。坦白說，我們無法想像、或認同，那些坐辦公室、與市場距離遙遠、從來甭接受競爭試煉的「宅男公務員」，可代那些第一線拚鬥、與全球競爭的企業決定哪些投資、哪些技術，是可以登陸；哪些則「尚未到適當的投資時機」。政府，更不該信心缺乏到以為有任何放寬後，企業會「跑光光」。日前政府宣布有意開放企業赴大陸投資十二吋晶圓廠，結果國內廠商都表示將待「適當時機再去投資設廠」，顯然，企業自有其市場考量與步調。

　看看過去政府「管理」企業投資行為的成果，政府過去那種管理、管制、限制的心態與態度，可以休矣！未來，政府應專注在打造台灣的投資環境與競爭力上，從基礎建設、行政效率、法令制度、到稅率、人力資源、甚至生活環境，都需改善提升。作得好，企業自然留下來。

　開放，對企業而言，當手腳不被綁住時，是更多的機會，但也是更多的挑戰。對政府而言，又何嘗不是如此？