The government has actively promoted negotiations for the Cross-Strait Investment Protection Agreement while keeping with the principles of "putting Taiwan first for the benefit of the people" and "parity, dignity, and reciprocity." At the Eighth Round of Chiang-Chen Talks held on August 9, 2012, the SEF and the ARATS signed the Cross-Strait Investment Protection and Promotion Agreement (hereinafter referred to as the "Investment Protection Agreement). The agreement took effect on February 1, 2013. On September 30 the same year, the SEF and the ARATS exchanged letters in which listed "cross-strait investment dispute settlement bodies" and "subrogation agencies" to actively implement the agreement and enhance protections for Taiwanese companies. The agreement established a variety of investment dispute settlement mechanisms; it is an important foundation to protecting the Taiwanese investment interests and is the first step towards securing Taiwan's business investments in the Mainland. The agreement provides comprehensive and institutionalized protection for Taiwanese business investments and strengthens the investment environment.
(1) Creating comprehensive investment protection
1. The closeness of cross-strait economic and trade relations and Mainland-bound investment by Taiwanese enterprises have driven demand for trade with Taiwan. It has also affected domestic industries and related employment. The Investment Protection Agreement not only directly protects Taiwan businesspeople in mainland China, but also indirectly protects the interests of Taiwanese industries and personnel linked to these Taiwanese businesspeople and Taiwan-invested enterprises in the Mainland. The government therefore has promoted signing of the agreement with consideration to overall interests.
2. The Investment Protection Agreement comprehensively protects the property rights, management rights, personal safety, and other related rights and interests of Taiwanese businesspeople in the Mainland. These protections are also effective retroactively, meaning that investments made before the agreement came into effect are also covered under the scope of the pact and protected by the relevant provisions of the agreement. The agreement also applies uniformly to all industries and will positively benefit investments in all industries.
(2) Institutionalizing investment protections
Prior to the signing of the Investment Protection Agreement, the protection of the investment rights and interests of Taiwanese businesspeople in the Mainland was dependent mainly on the Law of the People's Republic of China on the Protection of Investment of Taiwan Compatriots and its Enforcement Rules. However, the law has been inconsistently implemented in different areas and may be changed at any time, thus it is consequently unable to truly protect Taiwanese businesspeople in the Mainland. The Cross-Strait Investment Protection Agreement provides institutionalized protection for the investment interests of Taiwanese businesspeople whereby the competent authorities of the two sides monitor the implementation of the agreement and all relevant affairs. Through communication channels established under the agreement, the competent authorities will be better able to understand and handle related cases and problems involving the rights and interests of Taiwanese businesspeople, and thus better protect the legitimate investment interests of Taiwanese businesspeople.
(3) Strengthening the investment environment
The signing of the Cross-Strait Investment Protection Agreement will help to create a sound investment environment through measures related to transparency of investment regulations and protection of rights and interests. The agreement will apply to both Taiwanese companies and Mainland companies. Thus, even though Mainland companies will receive treatment on par with that afforded to foreign companies, the agreement will still have a positive impact on promoting Mainland investment in Taiwan and will also facilitate two-way investment across the Strait. Furthermore, the agreement will help attract foreign investment to Taiwan, benefit Taiwan's economic development, and increase Taiwan's overall competitiveness.