Signing of the Cross-strait Investment Protection Agreement between Taipei and Beijing


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September 26, 2012

Taiwanese businesses have long represented a substantial portion of foreign or offshore investment into the Mainland China since China opened itself and moved towards a more market-oriented than planned economy in the 1980s. However, given the peculiar relations between Taipei and Beijing, Taiwanese businessmen (along with their foreign stakeholders) have experienced difficult situations in doing business in the Mainland China in terms of safety for the person and the investment, among other things. Since the cross-strait dialogue resumed in 2008 and certainly since the coming into effect of the Economic Cooperation Framework Agreement (ECFA) between Taipei and Beijing, there have been numerous rounds of negotiations due to the vast array of differences across the strait in administrative systems, socio-economic development of the two sides, and so forth. The contents were finalized and signed at the 8th of the Chiang-Chen Talks (representing Taiwan’s Straits Exchange Foundation (SEF) and Beijing’s Association for Relations Across the Taiwan Straits (ARATS) respectively), which was held on August 9, 2012. 

 

The material features of the Investment Protection Agreement seek to implement the following:

  1. greater scope of the definition of investors than usual international investment agreements, i.e. to include investors who invest in the Mainland China via a third country;
  2. standards of how investment and related personnel should be treated;
  3. guarantees on personal freedom and security for investment related personnel, e.g. family of investors must be notified through to-be-established mechanism if personal freedom is abridged in some way;
  4. transparent and reasonable levies and just compensation for taking of private property; and
  5. dispute settlement channels that focus on government vs government, private party vs government, and private party vs private party.

 

For further interested readers, please refer to the statement issued by the Taiwanese officials on August 3, 2012.