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The Executive Yuan recently approved revisions to the "Negative List for Investments in Mainland China" that would relax prohibitions on investments in the four categories of infrastructure construction, manufacturing, services, and agriculture, as well as adjust the scope of prohibition on certain kinds of investments. Highlights of the revisions are listed below.
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The revisions moved the following items from the restricted category to the general category:
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Agriculture: (1) whole or split pork carcasses, fresh or refrigerated; (2) un-diced chicken, frozen or refrigerated.
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Manufacturing: polycrystalline silicon, other monolithic digital integrated circuits, other monolithic integrated circuits, and other hybrid integrated circuits.
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Services: banking, trust, financial leasing, venture capital, telecommunications (Type II Telecommunications General Business), and integrated circuit design.
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Infrastructure construction: (1) incinerators; (2) power generation (wind power, solar power)
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Adjustments to the scope of prohibitions and standard of review:
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Silicon wafers: Production of silicon wafers over 8 inches is still prohibited. The existing restriction that limits investments to a maximum of three 8-inch wafer factories will be continued, and the production technology used in these factories must be at least more than two generations behind the technology available domestically. Prohibitions on investments into the packaging and testing of wafers are now lifted, but amounts in excess of US$50 million must first be reviewed by the team of key technologies.
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TFT-LCD panels: Investments into the production of TFT-LCD panels will be regulated on an aggregate basis, and will be limited to a maximum of three factories. The technology in these factories must be at least more than one generation behind that of the investing company's domestic factories. Production of sixth generation or beyond panels is still prohibited. Production of panels with technology that equals or exceeds the technology of panels that the investing company is mass-producing domestically is also prohibited.
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The standard of review for the real estate investment industry has been relaxed. The limit on each investment has been raised to US$ 50 million. Total annual investments into Mainland China is capped at NT$ 50 billion. Legal persons investing in the Mainland's real estate development industry must be in good financial health, with a liquidity ratio over 100%, and, except for enterprises in the finance and insurance industries, a debt to total asset ratio of less than 70%. Individuals are prohibited from investing more than US$ 5 million per year in the Mainland's real estate development industry.
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