News / Asia

China-Taiwan Approve Investment Protection Pact

Chen Yunlin, left, shakes hands with Chiang Pin-kung, after signing investment protection pact, Taipei, Taiwan, August 9, 2012.
Chen Yunlin, left, shakes hands with Chiang Pin-kung, after signing investment protection pact, Taipei, Taiwan, August 9, 2012.
Ralph Jennings
TAIPEI — Long-time political rivals China and Taiwan signed a deal on Thursday that offers the first-ever legal guarantees to each other’s investors. The agreements reached by top negotiators in Taipei clear the way for wealthy-but-so-far-wary mainland Chinese investors to pump money into Taiwan. 

Beijing negotiator Chen Yunlin and his Taiwanese counterpart, Chiang Pin-kung, signed accords to up an arbitration mechanism, gradually open new investment areas and agree to notify the other side within 24 hours if an investor is arrested.

Talks on the protection deals had dragged in the past two years as China and Taiwan, with different legal systems, could not agree on arbitration details. China and Taiwan have no diplomatic relations, giving the protection accord crucial weight.

Chinese institutions interested in Taiwan had held back on fears that a change in the island government from pro-Beijing to anti-Beijing could threaten any investments. Tony Phoo, economist with Standard Chartered Bank in Taipei, says the protection deals will open doors to important Chinese investors.

“That’s definitely going to be helpful in terms of Taiwan’s ability for attracting more Chinese investment, especially from state-owned enterprises," he says. "Given the sensitivity of cross-Strait relations, we are of the view that the IPAs [investment protection agreements] serve as a push for the state-owned enterprises from China, especially those serious investors who are looking to invest in Taiwan.”

Market analysts expect Chinese investors to buy shares of listed Taiwanese companies. High-tech and tourism, a sector that depends largely on Chinese arrivals, would attract investors looking for quick gains. Taiwanese share prices are seen as undervalued despite strong company performances. Jack Huang, partner at the Jones Day law firm in Taipei, says China will buy stocks as well as seek partnerships with efficiently run Taiwanese companies, especially in technology.

“Quite a bit of the investment dollars, either from the Chinese companies or from the Chinese government wealth fund, they will find a decent percentage of that include Taiwan stocks," says Huang. "All things considered, Taiwan stocks are undervalued, Taiwan companies are fundamentally sound. There are Chinese companies and Taiwanese companies in the same line of business and, if they can join hands in one way or another, the scale increases.”

Analysts in Taiwan believe Beijing wants its money pumped into the island’s $431 billion economy to sell a later bid for political reunification. Beijing has claimed sovereignty over Taiwan since the Chinese civil war of the 1940s, when Mao Zedong’s Communists routed Chiang Kai-shek’s Nationalists. Taiwan has been self-ruled since then.

After the island’s president, Ma Ying-jeou, took office in 2008, he shelved political differences to focus on trade and economic deals. He sees business ties with the world's second-leading economy, China, as a way to keep Taiwan competitive against Asian countries that earlier had signed their own investment deals with Beijing. Since 2008, Taiwan and China have built up tourism and cut import tariffs on about 800 items.

Ma’s government has allowed Chinese investors to buy directly into Taiwanese firms in 247 sectors. They can also buy stocks -- up to a 10 percent share in most local firms.

Taiwan’s chief opposition party, which ruled from 2000 to 2008, fears that Chinese investment could force the island to depend too heavily on a political rival. China invested $1 billion in Taiwan in 2010 following a tariff reduction deal signed that year.  However, the amount fell in 2011 during a presidential campaign that could have returned the opposition to power. Ma Ying-jeou won a second term in January.
Taiwanese firms have been allowed to do business in China since the 1980s. For them, the accords signed on Thursday will extend protection in usually tough disputes about land rights and worker compensation claims. The agreements are expected to take effect by year’s end.

You May Like

Elusive Deal With Iran Could Yield Foreign Policy Legacy for Obama

A new Iranian leader -- and a strategic shift by the United States -- opens narrow window for nuclear agreement with Tehran More

Column: Saudi-Iran Meeting Could Boost Fight Against Islamic State

The fact that Iranians and Saudis are talking again does not guarantee a breakthrough, but it could make it easier to build a broad coalition against IS More

Thai Ruler Gives Top Cabinet Posts to Junta Inner Circle

Thailand's army chief has kept an iron grip on power as he extends the government, hand-picking an interim parliament that subsequently nominated him prime minister More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid