Investment protection talks between Taiwan and China break down

Oct 12, 2011, 8:01 GMT

Taipei - Taiwan officials said Wednesday that they could not agree with Chinese authorities on a pact to protect Taiwan investors in China.

The goal was to reach an agreement this week so that it could be signed when the heads of Taiwan's Straits Exchange Foundation (SEF) and China's Association for Relations across the Taiwan Strait meet in Tianjin, China on October 19-21.

'The two sides need more time for negotiations,' the SEF said.

There are reportedly two major issues of contention in the talks.

The first involves how disputes between Taiwanese businessmen and Chinese authorities are resolved.

Taiwan wants an international mechanism, because many of its businessmen do not trust the Chinese judicial system. But China has so far refused that condition, in line with its effort to prevent Taiwan from gaining an international forum for what it considers 'cross-strait' issues.

China also rejected a proposal to give notice to family members within 24 hours if a Taiwan businessman is detained.

SEF spokesman Ma Shao-chang said the difficulty talks reflect the thorny nature of Taiwan's status in China's eyes.

Asked if the disagreements are related to Taiwan's sovereignty issues, he responded, 'Basically, yes. Our negotiations are now getting more complex because many questions touch on that.'

Taiwan's business community has been pressuring its government to deliver on the pact so that they would no longer be disadvantaged when dealing with Chinese authorities.

Kao Wei-pang, the director of Taiwan's Victims of Investment in China Association, said many disputes stem from land and property issues. Local Chinese officials consider the land state-owned, and would refuse to give land titles or rights to many Taiwanese investors.

'If the land values increase on a factory, they can re-sell the land to a developer, and take it away from you,' Kao said.

He also cited cases of government-backed Chinese competitors physically going into Taiwanese-owned factories and stealing technology by carrying it off the premises.

'The Chinese government is in full control. Right now, only do business in China if you think you can outsmart the authorities and avoid all the pitfalls there,' he said.

Taiwanese officials doubt any agreement will be reached before national elections on January 14. President Ma Ying-jeou was hoping that an investment protection pact could boost his support among Taiwan's business community.

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