Taiwan Proposes to Invest one Billion Dlrs in U.S.

Taiwan’s Economic Ministry has approved an ambitious proposal calling for a one billion U.S. Dollar investment by private and public companies in the United States over the next five years, ministry officials said.

John Ni, director of the Ministry’s Industrial Development and Investment Centre (IDIC), said under the IDIC proposal, Taiwanese firms would be encouraged to set up factories and invest in property and securities markets in the U.S..

Taiwan’s 1986 investment in the U.S. Totalled 46 mln U.S. Dlrs, official statistics show.

The investment was mainly in the electronics, food, service and trading sectors.

The new proposal, approved by Economic Minister Lee Ta-hai yesterday, calls for investment of 80 mln U.S. Dlrs in 1987, 120 mln in 1988, 160 mln in 1989, 240 mln in 1990 and 400 mln in 1991, he told Reuters.

It will be discussed soon by officials of the Finance Ministry, the Central Bank and the Council for Economic Planning and Development before being submitted to the cabinet for final approval, he said.

“This is the first ambitious proposal with government initiatives to encourage our businessmen to invest in America,” Lee said.

He said government incentives to prospective Taiwanese investors would include bank loans and a five-year income tax holiday. Applications for investing in the U.S. Would also be simplified.

A ministry spokesman told reporters the proposed investment would be helpful in creating job opportunities for Americans and avoiding U.S. Import quotas or restrictions on Taiwanese products.

The plan will also help reduce Taiwan’s trade surplus with the U.S., Which rose to a record 13.6 billion U.S. Dlrs in 1986, up from 10.2 billion in 1985, the spokesman said.

The rising surplus has enabled Taiwan to accumulate some 54 billion U.S. Dlrs in foreign exchange reserves.

Economists described the proposal as a significant step by the government to head off U.S. Protectionism.

“Time is running out for us. Taiwan has lagged far behind Japan and South Korea in encouraging its businessmen to invest abroad,” said Hou Chia-chi, economics professor at Soochow University.