Why Does the Government Forbid Foreigners to Buy Taipei 101 Shares?

Why Does the Government Forbid Foreigners to Buy Taipei 101 Shares?
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
January 23, 2015

Executive Summary: Over the past year the government has interacted with the Chamber of Commerce and listened to advice from foreigners. We think every business should use the AmCham sentiment survey and white paper as a policy reference, and demand that the National Development Council and Ministry of Economic Affairs respond affirmatively. Regulations must be relaxed. That is a priority. That will create an environment more favorable to investment. Only then can we inject new vitality into the economy. Only then can we end Taiwan's economic stagnation.

Full Text Below:

Taiwan's economy this year may be slightly better than it was last year. The American Chamber of Commerce recently released its "2015 Business Climate Survey". American businessmen are optimistic about Taiwan's economy. The survey revealed that 70% of respondents believe this year will be as profitable as last year. Respondents were willing to increase investments and personnel recruitment in Taiwan. But American businessmen also hoped the government would loosen its regulations and change its politics as soon as possible, in order to reduce uncertainty. This survey gives us much to contemplate.

First of all we must point out that Taiwan's economic fundamentals are not bad. Taiwan has clearly been in recession for nearly 10 years. But its foundations have not been eroded. Certain structural problems however must be addressed before prosperity can be restored. The American Chamber of Commerce business sentiment survey is published every January. Last year's survey complained that regulations on Taiwan were stifling growth. They were tantamount to trade barriers. It feared this would affect Taiwan's participation in regional economic integration. Premier Jiang Yi Hua tried to reconcile domestic legislation with international requirements. Laws affecting trade must undergo regulatory impact assessments. Complaints have been lodged regarding nearly 300 regulations. These must be relaxed.

In June, the American Chamber of Commerce issued its White Paper. It affirmed the various ministries' efforts at self-examination. It cited a number of important developments. It praised regulatory reform. But this year it complained that over the past five years, interpretations of the regulations have been inconsistent, administrative efficiency has been low, and regulations remain outdated. These problems continue to plague foreign investors, in particular inconsistent regulations. As many as 60% of the companies complained about "serious impacts on business operations." Members also hoped that the government would reduce political unrest, clarify its policy toward the Mainland, narrow differences between local and international regulations and standards, and increase transparency in rulemaking. These would mitigate the negative impact of other factors.

According to the United Nations Conference on Trade and Development (UNCTAD), in 2011 Taiwan absorbed direct investment (FDI) amounting to a negative $ 1.96 billion, placing it next to last in the world. This year shows slight improvement. But it remains ranked near the bottom. Once upon a time, Taiwan was a model for attracting foreign investment. Today, it has been reduced to this.

The 2014 World Bank publication "Doing Business 2015 Global Report" was issued on October 29. Among the 189 economies surveyed for ease of doing business, Taiwan ranked 19th, one place lower than before, and well behind Korea's 5th place showing. Our worst showing was in the execution of contracts, scoring only 57.75 points and ranking 93rd, bringing up the rear. This is a very serious and embarrassing phenomenon, one that we must attach great importance to and confront.

The market economy is a kind of exchange system. In Adam Smith's "The Wealth of Nations" he focused on the "invisible hand" and how it successfully operated in the marketplace. In 1991, Nobel Prize winner Ronald Coase argued for clear definitions of property ownership, to reduce transaction costs, enable market participants to engage in trade, and achieve economic efficiency.

Coase's theorem is rooted in legal autonomy, consultations, and economic freedom. In 1993 Nobel Prize winner Douglass North reminded us that copyright laws protect the interests of inventors, encourage people to invest, and result in more inventions and innovation.

Institutional innovation for long-term economic growth is even more important than technical invention. In 2009 Nobel Prize Oliver Williamson used transaction costs to explain corporate governance and development. He underscored the importance of property rights and the rule of law in modern economy and society.

As we can see, Taiwan must pay attention to the rule of law and to appropriate regulations. Consider another example that recent foreign investors consider outrageous. The Ting Hsin Group decided to sell its stake in the Taipei 101 Building to the Malaysian based 101 Corporation. But the Ministry of Finance, the Central Bank, and the FSC unanimously opposed the sale. Finance Minister Chang Sheng-ho argued that the IOI Group invested 25.1 billion NT, of which 24.4 billion NT was debt. He said this would weaken Taipei 101's capital. The IOI Group completed additional documents addressing government concerns. But Minister Chang reiterated his opposition anyway. The Treasury was at a loss for words. It repeated its "Taiwan's Gateway must belong to us” rhetoric.

In order to express opposition to Wei Chuan, Taiwan has moved toward populism. We must ask: Why can't Taipei 101 be sold to foreign investors? What excuse is the government offering for its intervention? The government says it is safeguarding the public interest. It says public perceptions and public expectations oppose selling Taipei 101 to foreigners. But these are the same reasons for rejecting foreign investments by KKR years ago. The spectre of KKR has returned. The government wants to buy Taipei 101. But it wants to pay lower than market prices. Meanwhile, the Malaysian IOI purchase price is twice the market price.

The Ministry of Finance even declared that before Wei Chuan sells, it must first provide notice. But as long as a transaction is legal, it is supposed to be confidential. The Ministry of Finance is currently the second largest shareholder. It cannot be both a player and referee. If Taiwan is to move towards the rule of law, everything must be handled according to law.

Taiwan has a shallow dish economy. Openness is crucial. The government must be committed to improving the investment environment and removing investment barriers. Over the past year the government has interacted with the Chamber of Commerce and listened to advice from foreigners. We think every business should use the AmCham sentiment survey and white paper as a policy reference, and demand that the National Development Council and Ministry of Economic Affairs respond affirmatively. Regulations must be relaxed. That is a priority. That will create an environment more favorable to investment. Only then can we inject new vitality into the economy. Only then can we end Taiwan's economic stagnation.

社論－政府憑什麼不准外資買101股權
2015年01月23日 04:10
本報訊

台灣經濟今年可能比去年稍好，美國商會最近發表《2015商業景氣調查》，顯示美商對今年台灣經濟樂觀，7成受訪企業認為去年獲利今年可望延續，也願意加強在台投資及增聘人員。但美商希望政府能在法規及政治上盡速作出調整，減少不確定性。此份調查帶給我們很多的省思及建議。

首先我們要指出，台灣經濟基礎不差，近10年雖然明顯衰退，根基卻未受到腐蝕，但有一些結構性問題必須面對，才能再造繁榮。美國商會每年一月發表商業景氣調查，去年的調查就抱怨台灣法規「卡卡」，形同設下技術性貿易障礙，恐影響台灣參與區域經濟整合進程。行政院長江宜樺當時大動作要求國內法規要與國際調和，涉及經貿的新法律案出爐前要經過法規影響評估、現有近300條遭抱怨法規，也要適度鬆綁。

到了6月，美國商會的白皮書中，肯定部會的正面檢討，並列舉多項重要進展，讚許法規調和的進步。但今年的抱怨說這5年來，法規解釋不一致性、行政效能不彰和法規不合時宜等，仍然持續困擾外資企業，特別是法規不一致問題，有60%企業認為「已嚴重影響企業營運」。會員也期待我政府能積極降低政治不安定性、對中國政策的不明確性、縮小本地法規標準與國際間的差異、提升法規制定的透明度，來減緩其他負面因素可能帶來的影響。

另外，根據聯合國貿易暨發展會議（UNCTAD），2011年台灣吸收的直接投資（FDI）金額，竟然為負19.6億美元，名列全球倒數第2。這兩年稍有改善，卻也都還是排在倒數。曾幾何時，吸引外資典範的台灣，竟然淪落到此。

而2014年世界銀行於10月29日公布《2015年全球經商環境報告》評比結果，在 189個受調查國家中，計算各國經商便利度，台灣為19名，比過去退步1名，遠遠落後韓國第5名。我國表現最差的就是契約的執行，得分僅57.75分排名93，到了後段班。這是一個十分嚴肅與難堪的現象，應該高度重視並面對。

市場經濟是一種交換制度。亞當斯密在《國富論》中就很注重「一隻看不見的手」能在市場上順利運作。1991年得諾貝爾獎的寇斯（Ronald Coase）主張產權的歸屬清楚，能減低交易成本，使市場參與者能夠進行交易，達到經濟效率。

寇斯定理是依法自治，自我協商，自由經濟的根本。1993年獲得諾貝爾獎的諾斯（Douglass North）則提醒我們，專利法保障了發明者的利益，因而鼓勵更多人投入，才會出現更重大的發明與創新。

而制度創新對經濟的長期成長，甚至比技術發明還重要。2009年得諾貝爾獎的威廉森（Oliver Williamson） 把交易成本說，深入應用來解釋公司治理及發展。由此可見產權與法治在現代經濟社會的重要性。

準此，台灣應該要注重法規的合宜與法治的精神。再舉最近外資認為離譜的例子。頂新集團決定將台北101大樓股權售予馬來西亞外資IOI，但財政部、中央銀行、金管會三大財金部會首長一致反對，財政部長張盛和認為，IOI集團投資251億元，其中244億元是貸款，恐造成台北101資本弱化。在IOI集團針對政府疑慮事項完成補件後，張部長日前依然重申反對的立場，看來財政部吃了螺絲釘，堅持「台灣的門面」要屬於自己。

台灣為了反頂新，已經走向民粹。我們要問101為何不能賣給外資？政府憑什麼干預？政府以公共利益、社會觀感及民眾期待等理由要將101的股權出售區別於一般外人投資，這些都是當年否決合法外資KKR投資國巨的理由，現在陰影又重現。政府雖然想買，但只想用比市價更低的價格購買，而馬來西亞IOI購買價格卻是市價的兩倍。

財政部甚至表示頂新要賣之前應該先告知，但交易只要不違法，本來就應該保密。財政部目前也是第二大股東，不能球員兼裁判。台灣要走向法治，一切應該依法辦理。

台灣是淺碟子經濟體，唯有開放才是王道。政府應致力於改善投資環境，排除投資障礙。過去政府每年是有與外僑商會互動並聽取外商意見。我們建議應將美國商會每次的商業景氣調查與白皮書作為施政參考，要求國發會與經濟部積極回應。未來更應將法規鬆綁列為當務之急，營造更有利投資環境，才能注入經濟新活力，帶領台灣突破悶經濟。