The 120 members of a high-profile Economic Development Advisory Committee unanimously urged the Taiwanese authorities to replace the current "go slow, be patient" policy with a scheme called "active opening, effective management", under which the limits on mainland-bound investment will be reviewed.

Taiwan leader Chen Shui-bian has guaranteed to implement all the results worked out by the committee during the ad hoc economic forum, which was convened to come to the rescue of the island's ailing economy.

The existing policy bans single investments worth more than US$50 million, and forbids cash injections in the infrastructure and advanced technology sectors.

A special group of Taiwan government officials, scholars and business representatives will be set up to screen the island's major mainland-bound investment applications.

"The US$50 million ceiling is no longer applicable," Tsai Ing-wen, chairwoman of the Mainland Affairs Council, told reporters.

She was speaking after the proposal was formally endorsed yesterday, the last day of the committee's three-day meeting.

According to the proposal, Taiwanese enterprises will also be allowed to invest directly on the mainland with the only condition being that the safety of such investments can be guaranteed by the mainland authorities.

Koo Chen-fu, Taiwan's top negotiator in dealings with the mainland, said the proposed lifting of the limits had "great significance" in that "beginning from economic integration, the two sides can increase exchanges from the other fronts".

The go-slow policy on investment has been in place since 1996 following fears that the island would become hostage economically should a war break out across the Taiwan Straits.

However with or without government approval, Taiwanese companies have poured about US$70 billion into the mainland since the island authorities first allowed civil exchanges between the two sides in 1987.

The committee said the government should also allow investors from the mainland into Taiwan's real estate market, but no timetable was provided.

It also recommended that mainland funds be allowed to invest in Taiwan's stock markets, but under "effective monitoring".

Most of the recommendations did not include timetables and were subject to "effective monitoring", which was not explained.

The committee did not agree on specific new policies that would end a five-decade ban on direct shipping and aviation links between the mainland and Taiwan. The group acknowledged that such a move requires bilateral negotiations.

Taiwan was separated from the mainland in 1949 when the Kuomintang party fled to the island after being defeated by the Chinese Communist Party.

(China Daily 08/27/2001)