March 11, 2017 11:21 pm JST

China urges Taiwan to open itself to more mainland investment

Beijing denies that it uses market access as a stick and carrot

CHENG TING-FANG, Nikkei staff writer

Miao Wei, China's minister of industry and information technology, talks of mainland investment in Taiwan and unification on March 11. (Photo by Akira Kodaka)

BEIJING -- China's minister of industry and information technology on Saturday urged Taiwan to be more open to mainland investment. He said this would strengthen ties and put the two sides on a path toward unification.

"We are very open to investment from Taiwan, and many Taiwanese companies have made a lot of money here," Miao Wei said. "We hope that openness should be more two-sided instead of one-sided."

He made the comments during a press conference on the sidelines of the annual meeting of the National People's Congress, the country's parliament.

"We hope Taiwan could be more open to Chinese companies," Miao said. "This would be beneficial to both sides and also support our goal to facilitate unification and achieve the aim of one China."

China and Taiwan split amid a civil war in 1949, but Beijing continues to claim the self-ruling, democratic republic as its own. China has not renounced the use of force as a possible means to bring about unification.

Ties between Taipei and Beijing have cooled significantly since Taiwanese President Tsai Ing-wen of the pro-independence Democratic Progressive Party took office last May. Chinese officials view her as leading the island away from Beijing's pull.

Miao was answering a question that touched on technology competition between China and Taiwan as well as on Beijing-backed Tsinghua Unigroup's recent unsuccessful bids to acquire 25% stakes in three Taiwanese chip assemblers -- Siliconware Precision Industries Co., Powertech Technology and ChipMOS Technologies.

Miao said his ministry will continue to encourage Taiwanese investment in the mainland. This includes the $3 billion that Taiwan Semiconductor Mfg. (TSMC) is pouring into an advanced chip facility in the southern Chinese city of Nanjing. In addition, United Microelectronics is involved in a project in the southern coastal province of Fujian.

TSMC is the world's No. 1 contract chipmaker; UMC is No. 3.

Foreign, Chinese

Miao also denied that his ministry discriminates against foreign companies in terms of market access. He also denied that the government has set time frames in which it wants domestic companies to achieve certain market share goals.

"We are only developing our own technologies to meet our needs," Miao said, "especially when some Western countries are imposing sanctions or embargoes on sales of some products and equipment to us. Otherwise, how can we grow our own economic development and how can we protect our own companies?

"Foreign companies and domestic companies are and will be treated equally."

Miao was responding to criticism from the European Union Chamber of Commerce in China. The chamber recently issued a report that said Beijing's "Made in China 2025" initiative could help Chinese companies gain unfair advantages in the domestic market and force out foreign companies.

The initiative, a decade-long project, was launched two years ago as part of Beijing's plan to become a global technology powerhouse by 2025.

One aim is to slash China's reliance on imports from companies like Boeing, Airbus, General Electric, Siemens, Toyota, Toshiba, Samsung Electronics, Qualcomm, TSMC and Intel. It would do this by producing its own information technology, jets, chips and electrical vehicles.

Big international and Taiwanese companies worry that the initiative could knock them to the back of the line in a protectionist China. They are also concerned that they could be forced to manufacture in China and transfer technologies in exchange for market access.

Regardless of what Beijing says of its policies, foreign companies feel squeezed in China. A Taiwanese tech executive once told the Nikkei Asian Review, "We made some investments to set up a facility in China to avoid any unfavorable conditions that the Chinese government might impose in the future, including a ban on imports."

Asia300

Taiwan Semiconductor Manufacturing Co., Ltd.

Taiwan

Market(Ticker): TAI(2330)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 162,790.56M
Shares: 25,930.38M
Asia300

United Microelectronics Corp.

Taiwan

Market(Ticker): TAI(2303)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 4,963.88M
Shares: 12,624.31M
Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 283,305.98M
Shares: 159.91M

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