TAIPEI: Taiwan may ease restrictions on technology investments on the mainland, "presidential" office spokesman Wang Yu-chi said in a phone interview yesterday.

Taiwan may allow its companies to invest on the mainland if similar technologies already exist there, Wang said yesterday, confirming comments made by Taiwan leader Ma Ying-jeou Sunday and reported by the Wall Street Journal.

A relaxation of investment restrictions on the mainland will allow Taiwan companies to increase production in the world's most populous market. Taiwan's current rules are aimed at averting a loss of technology and money to the mainland.

Taipei is evaluating a plan to let local liquid-crystal display and semiconductor companies set up plants on the mainland and buy stakes in businesses there, Huang Hsien-lin, an official with the economic affairs authorities said September 29. He declined to give a time frame for such a move.

Taiwan opened up 64 sectors in manufacturing, 25 in services and 11 public infrastructure projects to mainland investment in June.

Taiwan Semiconductor Manufacturing Co, the world's biggest custom-chip maker and AU Optronics Corp, Taiwan's largest maker of liquid-crystal displays, have facilities on the mainland using older technology and producing less-advanced products than are available in Taiwan.

Incoming capital

Semiconductor investment by Taiwan firms on the mainland is allowed on the condition that technology there is at least two generations behind what is available on the island, and must first meet Taiwan regulatory approval.

Taiwan will conduct a review of its policies on mainland investment entering the island by year end, the official Central News Agency reported on its website, citing an interview yesterday with economic affairs chief Shih Yen-shiang.

Taiwan would welcome big chunks of mainland investment into the island, with the government intending to gradually open doors to mainland investment, Shih was cited as saying.

In another development, aviation officials on both sides of the Taiwan Straits plan to meet by the end of the year to discuss issues including the carriage of transit cargo on regular cross-Straits flights, the Central News Agency reported on its website, citing Lee Lung-wen, director-general of the Civil Aeronautics Administration.

Taiwan hopes to convince Beijing to allow carriage of goods bound for third destinations on current direct flights across the strait, Lee was cited as saying.

Bloomberg News

(HK Edition 11/03/2009 page2)