Taiwan's opposition Monday warned the island's government not to relax controls on investments in mainland China made by its high-tech industry.
President Ma Ying-jeou of the China-friendly Kuomintang said last week his administration has been considering allowing Taiwan's semiconductor companies to set up plants on the mainland, introducing the state-of-the-art technology.
The proposal was welcomed by local microchip makers, who have been pushing for a relaxation of controls under which they are permitted to invest only in mainland plants producing low-end, eight-inch microchips.
Ma's proposal has drawn severe criticism from the pro-independence Democratic Progressive Party (DPP).
"It may lead to massive outflow of cash and advanced technologies and make more people lose their jobs," DPP legislator Chen Ting-fei told reporters.
"Since its impacts would be grave and far-reaching, the government must not ease the controls," she said.
Kao Chih-peng, the DPP's parliamentary whip, demanded the government hold a public hearing on the issue before making its final decision.
Taiwan split from China in 1949, at the end of a civil war. Mainland-bound investments had been banned until the 1990s, when Taipei started easing restrictions.
Local businesses are now among the biggest foreign investors in mainland China, with an estimated 80 billion US dollars invested there.
Despite booming cross-strait business, Taipei imposes restrictions on high-tech investments amid concerns it could give China a technological advantage.
Hostilities across the strait have been on the wane since Ma came to power in May 2008, vowing to promote reconciliation and trade links.
In December, the two sides egan direct daily flights, postal and shipping services, in a move expected to strengthen trade ties.
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