Taiwan said Wednesday it would lift restrictions on mainland investments by domestic flat-panel and electronic chip manufacturers, the Wall Street Journal reported. At present, manufacturers from Taiwan are only to carry out final assembly in the mainland, using components made elsewhere. Under the planned reforms, flat-panel makers will be able to set up an unlimited number of “fifth generation” plants – factories that are able to make smaller panels used in mobile phones – in the mainland. For more advanced technologies, no more than three plants are permitted. Chip manufacturers are still limited to three plants in the mainland, using less-advanced technology than in Taiwan, although they can increase investment in mainland companies. The restrictions were introduced to prevent a hollowing out of Taiwan’s technology sector, but it has resulted in companies losing the competitive edge to rivals in the US, South Korea and Japan that can leverage the mainland’s lower production costs and growing consumer market.
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