| Summary: | 碩士 === 淡江大學 === 大陸研究所 === 88 === Title of Thesis：Political Factors Affecting Taiwan
Investment in the Chinese Mainland
Key Words：Chinese mainland, Political factors, Taiwan businesses, Investment
Name of Institute：Graduate Institute of China Studies, Culture Education Division,
Tamkang University
Graduation date：June, 2000 Degree Conferred：Master’s
Name of student：Chang, Mei Ling
Advisor：Dr. Guo, Jiann Jong
Abstract：
Political relations between Taiwan and the Chinese mainland can be characterized as
“special” in nature. Although Taiwan businesses have no intention of getting involved in sensitive political issues when they invest on the Chinese mainland, they ultimately cannot avoid some involvement in the pursuit of operating efficiency. While examining the political factors and influences faced by Taiwan businesses when investing in the mainland this thesis attempts to isolate the gap in political factors between “actual “and ”perceived” considerations and the strategies of Taiwan businesses have for dealing with such political factors.
The findings of this study are:
The major political factors “actually” influencing investment by Taiwan businesses on the Chinese mainland, in descending order of importance, were:
1) Raw material localization policy;
2) Shifts in tax laws;
3) Infrastructure supply policies;
4) Import/export controls;
5) Bureaucratic red Tape; and
6) Conflicts between local tax break policies and investment limits of differing
regions.
The “perceived” political factors with respect to investment in the mainland by Taiwan businesses were, in descending order of importance:
1) Local tax break policies;
2) Stability of the political situation on the mainland;
3) Willingness of local governmental organizations and officials to cooperate;
4) Import/export controls;
5) Cross-strait relations; and
6) Continuity of policy.
Clearly, Taiwan businesses overestimated the influence of tax break policies and underestimated the severity of policy discontinuity.
The major political factors on the mainland affecting investment by Taiwan businesses were:
1) The raw material localization policy pervasively affected product delivery and quality and increased operation costs;
2) Utility, telecommunication and transportation infrastructure supply policies affected 75.9 percent of food enterprises and 67.7 percent of electronics enterprises.
3) Triangular responsibilities between state-owned enterprises and the unique politics of the bureaucracy that cause holds or delays in payments that indirectly affect Taiwan-owned enterprises in the service, beverage, petroleum, chemical, and medical industries are crucial factors in determining whether the investment is successful or not.
4) Fluctuations in mainland tax laws─Import taxes or value-added tariffs imposed on machine tools would affect 75.9 percent of Taiwan-owned businesses engaged in the machine tool, food and beverages industries;
5) Import/export controls─Controls on categories of exports or customs restrictions would affect 70.8 percent of Taiwan-owned businesses in the export textile, garment, rubber and plastic industries and 70 percent of those located in the Pearl River Delta area; and
6) Conflicts between local tax break policies and investment limits of differing regions─Compelling Taiwan businesses to set up production bases and operating divisions in every region would most profoundly affect 72.4 percent of Taiwan-owned businesses engaged in marketing distribution of foods and beverages on the mainland.
Over 1/3 of Taiwan businesses were unwilling to increase their investments on the mainland because of concerns about the inability of Taipei and Beijing to sign an Investment Safeguard Accord and so tended to be conservative about investing on the mainland.
The ROC government’s “go slow, be patient” investment policy with respect to the mainland affected the investment willingness of 23.8 percent of large-scale businesses and indirectly interfered with the investment plans of 15 percent of small- and medium -sized businesses.
51.2 percent of Taiwan businesses expressed concern about the development of US/PRC relations.
48 percent of Taiwan businesses felt that mainland accession to the WTO would benefit them.
The strategies employed by Taiwan businesses in response to political factors were as follows, in descending order:
1) Adaptation;
2) Control;
3) Politicization;
4) Withdrawal or regulatory avoidance; and
5) Dispersal
Over 50 percent of the funds invested in the Chinese mainland by Taiwan businesses amount to less than 25 percent of the parent’s companies’ paid in capital. This attests to a lack of confidence about making long —term investments in the mainland and an unwillingness among Taiwan businesses to invest on the mainland given indications that a solution to the cross-strait issue is unlikely in the short term.
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