Taiwanese traders invest in China under foreign-registered firms

TAIPEH, Taiwan – Taiwanese businessmen are using foreign-registered firms to invest in China, according to a top government official here said.

Thomas M.F. Yeh, Council for Economic Planning and Development vice chairman, told The STAR that about 20 to 30 million people are employed in companies operated by the Taiwanese in China.

"Taiwanese money in the Virgin Islands are being invested in China," he said.

Yeh said cross-straits (between Taiwan and China) trade amounted to $76.4 billion in 2005.

Last year, the actual Taiwanese investment in China was registered at $100 to $150 billion, he added.

"Taiwanese-owned Japanese firms are the leading investors in China," he said.

However, Yeh said many Taiwanese businessmen in China do not remit because of the high income tax in Taiwan.

Of the 23 million Taiwanese, around one million live and do business in China, he added.

Yeh said the Taiwanese enter China legally from another country with the acquiescense of the Chinese government, which issues them residency permits and allows them to do business.

China does not recognize passports issued by Taiwan, he added.

Despite increased Taiwanese investments in China, the Taiwan government does not favor economic integration with China, Yeh said.

China does not recognize Taiwan as an independent state and views it as a renegade province even if the island nation is a major economic power.

The Council for Economic Planning and Development serves as a financial and economic advisor to the Cabinet or Executive Yuan.

To help facilitate the Cabinet’s decision-making, the council integrates the views of the different government agencies.