The Inevstment Enviroment And Development Of Industry Upgrading Across The Stait

Traditional industries play an important role as the economic mainstreams in developing countries. In Taiwan, the fast increased economic development is significantly related to traditional industries over the last sixty years. In specific, upgrading industries and changes in the investment environment are two main factors that have an effective impact on Taiwan's economic growth. Since1988, there were more investors looking for other marketing in other developing countries to start new manufactories because of the environmental changes. In the same time, China underwent a significant economic reform focusing on economic reconstruction and investment environment reorganization to attract more business investors from other countries at the end of1978. Because of that, traditional industries in China were also recognized as a valuable factor to their economic growth. Within thirty years, China has become a world of manufactories. Nowadays, China has entered a new ear which is "global economy" as a world of consumer mainstream. A "World of manufactories" has gradually become a "world of consumer market."The purpose of this study was threefold. The SWOT analysis and historical comparison research design were used to answer the research questions;1. Under the certain investment environment, what are the advantages and disadvantages for traditional industries from the macro and regional point of view since the late1990s both in China and Taiwan.2. What are threats and positive opportunities that traditional industries may need to face once the government joined the World Trade Organization (WTO). In addition, the meaning and inevitability of investing business in China as well as the upgrading industries in China are analyzed.The findings of this study would be a useful and important component for developing relevant investment policies, to be a decision making reference to avoid over-optimistic attitude of foreign investment and to promote industrial upgrading. First of all, the findings of this study revealed that traditional industries underwent transition process in both Taiwan and China. The transition of traditional industries started earlier in Taiwan. But the environment of upgrading industries is wildly different. Secondly, from the macro point of view, the essential conditions (politics, regulations, taxation benefits) of business investment in both sides and overall economy environment (economic development, import and export, attraction of foreign capital and other assessment indicators) are better than before. Next, from the regional investment environment point of view, there are some similar conditions for regional traditional industries in both sides-Taiwan industrial park and Mainland special economic zone. Both sides have good geographic benefits, hold high potential investment capability, have similar industrial structures, value investment rights and interests safeguard and other facilities are becoming better. The main difference is in investment verification application policy. In Taiwan, there is a unified department for investment verification application and verification application process is efficient. On the other hand, the verification applications are based on the different investment amount, and the patterns in China. Thus, it would take vary time in reviewing application to get verified.In addition, there are less investment tax incentives and the threshold of rewarding is higher and labor costs are more expensive in Taiwan industrial park. Opposite to these conditions, In China, there are more investment tax incentives and less year limitations. The results from SWOT analysis are:shortage of high technicians, financing difficulty and competitive marketing in both China and Taiwan.The findings of this study suggest that related occupational sectors in both China and Taiwan should provide traditional industries training center, assist manufactories reforming, reduce enterprise management cost, build overall financial service system, offer industrial financing communication channels and provide correct information of enterprise investment. To enhance the business, forward the ability of international competitiveness, and promote industrial upgrading, manufacturers are in need to adjust their industrial organizational structures, reinforce abilities and capabilities of research development, support and provide field professionals, build the strategic alliance and value the staff continuous education.