TAIPEI, Sept 21: China-bound investments approved by Taipei authorities in the first eight months of this year amounted to US$2.36 billion a 34.8 per cent increase over the same period of 2001, the economic ministry said on Saturday.

Inbound investments, however, dipped 45.9 per cent to two billion dollars during the same period amid global recession, the ministry said.

The value of approved overseas investment projects other than those in China fell 34.2 per cent to $1.9 billion, it said.

Various relaxations adopted by Taipei - simplifying the application process, widening the list of items allowed for investment and opening direct investment negotiations with the mainland - had provided local businesses more incentives, it said.

Investors were also attracted by the various liberalization moves that China had taken since it was admitted to the World Trade Organization in late 2001, it added.

A record $425 million of mainland-bound projects were approved by the Investment Commission in August, the ministry said.

Economic authorities estimated the total value of mainland-bound investments this year at between $3.5 billion to four billion, as compared with $2.78 billion in 2001, $2.6 billion in 2000 and $1.25 billion in 1999.

Some 44.5 per cent of the approved projects in the first eight months were on electronics and electrical appliances, followed by 8.4 per cent on basic metals and 5.75 per cent on plastics.

Observers have estimated that some $70 billion of capital had been channeled to the mainland for various investments with or without approval of Taipei government.

Taipei had permitted local businesses to invest in China only through third parties until the middle of this year when it allowed direct mainland-bound investments.

Taipei has banned official contact with China and direct exchanges in transport and trade between the two sides since the former ruling Kuomintang fled here in 1949 after losing a civil war to Chinese communists. —AFP