Soon after the decision, President Lee Teng-hui reiterated his concern about investors' eagerness to invest in communist China and urged enterprises to roll their money back into Taiwan instead of the island's long-time adversary. With increasing Taiwan funds flowing into China and decreasing investments in Taiwan, this ultimately will cause a hollowing-out of (Taiwan) industry, Lee told a closed meeting of the ruling Nationalist Party.
Lee said in August that Taiwan should review its policy of targeting communist China as a main market to avoid depending too heavily on its investment opportunities. The planned special economic zone, where free exchanges in personnel, information, liquidity and goods will be allowed, will be open to foreign countries but not to China, the agency said.
It said the government's decision was made at a closed-door meeting of officials from Taiwan's main bodies for economic planning and China affairs, the Council for Economic Planning and Development and the Mainland Affairs Council.