21st Century Foundation





The Relaxation of Cross-Strait Mutual Investments in Telecommunications Services

Release date / 2010-08-23

     The cross-strait relationship has recently marked a new era thanks to a combination of noteworthy initiatives taken by Taiwan to promote cross-strait cooperation and partially deregulate cross-strait investments and China’s continuing economic development. In particular, such new initiatives as cross-strait cooperation in industrial standards, the Building Bridges Project, ECFA (Economic Cooperation Framework Agreement), and partial deregulations of Chinese investment to Taiwan have recently been launched, mainly from the Taiwan side and have been met with cautious yet positive responses from Mainland China.

    One the one hand, such initiatives may provide ample opportunities for Taiwan to transform its industries and economy with new business models and competitive advantages. On the other hand, increased interaction between Mainland China and Taiwan in trade (both manufacturing and services) and investments may arouse concerns over the national, economic, social, and information security in Taiwan.

    Set against the above backdrop, this study sets out to seriously and systematically examine policy issues regarding cross-strait investment in the telecommunications (telecom) sector. Specifically, the study addresses three main issues: firstly, whether or not and how to, if necessary, deregulate Chinese telecom investment to Taiwan in a stepwise manner; secondly whether or not and how to, if necessary, deregulate Taiwanese telecom investment to Mainland China in a stepwise manner; and thirdly what the above deregulations mean to Taiwan in terms of industrial development, macroeconomic development, and social and national security. To deal with all of these issues, the research team has employed industrial and policy analyses, a questionnaire survey, interviews with the firms and government agencies involved, and macroeconomic analyses of the Input-Output Analysis of the Taiwanese and Chinese Economies. Compiling results of all of these analyses, we have managed to form a comprehensive set of background information required for the decision-making on the part of the NCC. We go further with reference to the current investment and regulatory regimes and the new factor of ECFA to put forward in details our policy recommendations to the NCC. 

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