AIIB brings greater in­vest­ment op­por­tu­ni­ties: MOEA

The China Post - - TAIWAN BUSINESS - BY JOHN LIU

By join­ing the Asian In­fra­struc­ture In­vest­ment Bank (AIIB) and thus help de­vel­op­ing coun­tries build in­fra­struc­ture, Tai­wan will have ac­cess to greater in­vest­ment op­por­tu­ni­ties, ac­cord­ing to a Min­istry of Eco­nomic Af­fairs’ (MOEA) anal­y­sis.

Be­com­ing a mem­ber, in a nut­shell, will do more good than harm, said Eco­nomics Min­is­ter John Deng ( ).

The MOEA handed in its eval­u­a­tion re­port on the AIIB to the Leg­isla­tive Yuan yes­ter­day. The re­port was al­legedly re­port­edly on March 18 be­fore Taipei for­mally sub­mit­ted its let­ter of in­tent on March 31 — the ap­pli­ca­tion cut­off date.

The re­port out­lines the benefits, strat­egy and dis­ad­van­tages of join­ing the AIIB.

In terms of the benefits, the MOEA said as an im­por­tant Asian econ­omy with abun­dant cap­i­tal re­serves, Tai­wan will be able to con­trib­ute in re­gional in­fra­struc­ture in­vest­ment by join­ing the AIIB. Through ac­tive par­tic­i­pa­tion, Tai­wan can also stave off the risk of be­ing marginal­ized in the in­ter­na­tional com­mu­nity.

The ef­fort will bring new trade, med­i­cal knowl­edge, in­for­ma­tion tech­nol­ogy and en­vi­ron­men­tre­lated in­vest­ment op­por­tu­ni­ties, among oth­ers.

The MOEA pointed out th­ese op­por­tu­ni­ties will be a great fit to lo­cal in­sur­ance firms’ fi­nan­cial needs. With plenty of cash on hand, th­ese com­pa­nies are look­ing for in­vest­ment tar­gets with a re­li­able re­turn in the long run. In­fra­struc­ture projects re­quire a great cap­i­tal in­put and have solid longterm re­turn on in­vest­ment.

Re­la­tions with the US and Ja­pan

May Take a Hit

On the strat­egy side, the MOEA said the for­ma­tion of the AIIB is trans­form­ing mem­ber na­tions’ re- la­tion­ships, from the Asia-Pa­cific Eco­nomic Co­op­er­a­tion (APEC) to the Free Trade Area of the Asi­aPa­cific (FTAAP). This will be an op­por­tune mo­ment to ini­ti­ate dis­cus­sion on Tai­wan’s re­gional eco­nomic in­te­gra­tion, be­fore fur­ther ex­plor­ing Tai­wan’s strat­egy and routes to join the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship (RCEP).

On the neg­a­tive side, the MOEA holds that sid­ing with the AIIB may hurt Tai­wan’s re­la­tions with Wash­ing­ton and Tokyo.

The min­istry fears it will have an ad­verse im­pact on talks with the U.S. on the Trade and In­vest­ment Frame­work Agree­ment ( TIFA), mak­ing it harder for the na­tion to join the Trans-Pa­cific Part­ner­ship (TPP).

The AIIB is per­ceived as a ri­val to the In­ter­na­tional Mon­e­tary Fund (IMF) and the Asian Devel­op­ment Bank (ADB). The lat­ter is headed by Ja­pan, which is also the largest cap­i­tal con­trib­u­tor.

The gov­ern­ment must take into ac­count how Ja­pan views Tai­wan’s par­tic­i­pa­tion in the AIIB, as it may im­pact the two na­tions’ co­op­er­a­tion re­la­tions and Tai­wan’s role in the ADB.

In re­sponse to Demo­cratic Pro­gres­sive Party law­maker Chen Ming-wen’s ( ) ques­tion on the U.S.’ re­sponse to Tai­wan’s ap­pli­ca­tion to the AIIB, Deng quoted the Min­istry of For­eign Af­fairs say­ing that the United States has ap­proved the move.

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