The Ministry of Economic Affairs (MOEA) has approved an investment plan by China Mobile Communications Corp. to set up an affiliate in Taiwan to run an electronic components wholesale business, but the Chinese telecommunications giant is not allowed to buy a stake in Taiwan's Far Eastone Telecommunications Co.

Fan Liang-tung, executive secretary of the Investment Commission, said Thursday that the government has not opened the telecommunications sector to Chinese investors.

Fan said the telecommunications sector was not included in the list of sectors that Taiwan's government would allow Chinese investments in.

While the MOEA is studying a second-stage of opening to Chinese investment, Fan said that the ministry is considering allowing investments in public infrastructure projects, but they are not considering do so for the telecommunications sector.

When China Mobile's plan to invest in Far Eastone was first reported last summer, it raised worries in Taiwan, and the MOEA was quick to express its concern to Far Eastone's management.

Fan said that through its affiliate in the Netherlands, Zong B.V., China Mobile applied for approval to set up an affiliate in Taiwan last November. On Dec. 11, the commission approved China Mobile's application for operating an electronic components wholesale business here.

A Hong Kong television company reported from Beijing Thursday that China Mobile's Chairman Wang Jianzhou said his company will buy a stake of Far Eastone through the newly-formed company and the plan is under review.

Wang and Far Eastone Chairman Douglas Hsu reached a strategic alliance agreement last April that gave China Mobile permission by Far Eastone to buy a 12 percent stake in the Taiwanese telecommunications company for NT$17.77 billion, despite the fact that the Taiwanese government has not opened the telecommunications sector to Chinese investors.

Far Eastone's management, meanwhile, reiterated that the company will abide by laws and regulations of the government in processing the case.

source:focustaiwan