STOCK MARKET WATCH -- Monday, 13 February 2012

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26. Taiwan fails to lure mainland investors

http://www.atimes.com/atimes/China_Business/NB14Cb03.html

TAIPEI - Taiwan has gradually opened up to investments from China since 2009. Relaxations have been hugely controversial over concerns that the former arch-enemy would use its money as a means to achieve backdoor unification. But as of today, a noteworthy flow of Chinese foreign direct investments (FDI) toward Taiwan is conspicuous by absence. Aggregated they had only reached some US$150 million at the end of last year, a Lilliputian


amount compared to 2011's total foreign investments in Taiwan of $9.53 billion. The Taiwanese government's red tape is not the only reason for the disappointing figure.

Those who have $150 million to spare could afford a fancy office tower on top of a Taipei subway station; or a massive cement factory in some Taiwanese backwater town; or two dozen topnotch helicopters. Anyway, $150 million is petty cash for China, the world's largest foreign exchange reserve holder with reserves as high as $3.2016 trillion, especially when considering that it's assessed Beijing would do almost anything to pocket Taiwan.

A comparison with other countries' FDI on the island makes the insignificance of the sum even clearer: Taiwan's largest investor last year, with investments worth $2.15 billion, were the Americans, while the Singaporeans came in second at $1.02 billion, followed by the Japanese at $0.97 billion. And in China, about 80,000 Taiwanese enterprises have invested with value totaling some astronomic $80 billion.

To make China inject cash into their economy, the Taiwanese implemented two waves of opening. Both of which were largely spurned.