BEIJING – In another attempt by Beijing to show goodwill to Taiwan ahead of elections there on Jan. 11, China’s largely rubber-stamp parliament on Saturday revised a law to simplify investment procedures for Taiwanese companies.
China is Taiwan’s favorite investment destination. Taiwanese companies have invested more than $100 billion there since China began landmark economic reforms in the late 1970s, drawn by a common culture and low costs.
China has extended what it views as olive branches to Taiwan in the run-up to the election, including opening further sectors to Taiwanese investors, with the ultimate goal of enticing the island to accept Beijing’s control.
Taiwan’s government has warned against falling for China’s inducements and has called on China instead to grant its own people democracy and freedom of speech. China has never renounced the use of force to bring Taiwan under its control.
The revised law removes several layers of bureaucracy to simplify procedures for investment from Taiwan, with the aim of encouraging more of it.
Chinese Commerce Ministry official Jiang Chenghua told reporters the central government “paid great attention” to protecting and encouraging Taiwan investment and it has support from the highest levels, including President Xi Jinping.
“Although the revised clauses are not many, they are of great significance and are conducive to optimizing the investment environment for Taiwan compatriots in the mainland and to further expand economic and trade exchanges and cooperation between the two sides,” Jiang added.
The revision is designed to dovetail with a new foreign investor law that will come into force on Jan. 1. Chinese Commerce Minister Zhong Shan said earlier in the week that he wanted “our Taiwan compatriots to share the benefit of this great change.”
Taiwan says China has been stepping up its efforts to sway electors and is planning an anti-infiltration law to counter Chinese influence efforts, which could pass in the coming week.
Next month’s elections pit President Tsai Ing-wen of the pro-independence Democratic Progressive Party against Kaohsiung Mayor Han Kuo-yu of the main opposition party, Kuomintang, which favors close ties with China.
A petition to recall Han began on Thursday, with campaign initiators saying he should be ousted because he ran for president after only four months in office and has neglected the city’s affairs.
One initiator, Aaron Yin, said: “This is a historic moment. It’s the first time an elected leader of the special municipality is being recalled.”
Han said, “The campaign only shows the DPP is a sour loser,” referring to Tsai’s party, which lost all but six mayoral and county magistrate seats in the November 2018 elections. He attributed his electoral victory to Kaohsiung citizens’ realization that the DPP had done a poor job governing Taiwan’s third-largest city over the past 20 years.
China is Taiwan’s top trading partner, with trade totaling $226 billion in 2018. Taiwan runs a large trade surplus with China.
Taiwan has been trying to wean itself off its reliance on China and to encourage Taiwan companies to come back home or to shift their investments to other parts of the world, notably Southeast Asia.
Taiwan’s economy has benefited from its firms moving manufacturing back to the island to escape higher tariffs from the China-U.S. trade war, though the dispute has also caused some disruption for Taiwan’s economy.