Formosa Group, Hon Hai eye more Taiwan investment

TAIPEI, April 8 (Reuters) - Taiwan's top petrochemical and electronics firms said they may make major new investments at home, but the chemicals firm said direct transport links with China promised by the incoming administration would be a deciding factor, media reported on Tuesday.

Formosa Plastics Group, parent of Formosa Plastics Corp (1301.TW) and Formosa Petrochemical (6505.TW), could consider building an ethylene plant in the Taiwan city of Mailiao instead of the eastern China city of Ningbo, Taiwan's two business dailies reported, quoting group Chairman Wang Yung-ching.

"Making it here and there is the same," Wang said, in reference to the choice between Mailiao and Ningbo. "If we have the (direct) links, then it won't be necessary to invest in Ningbo."

The papers also quoted Terry Gou, chairman of Hon Hai Group, parent of Hon Hai Precision Industry (2317.TW), as saying his company would invest in a software park in the south Taiwan port city of Kaohsiung.

The reports said Guo also promised to use Kaohsiung's port for transshipment of goods from its Asia manufacturing facilities to other parts of the world.

Hon Hai shares were up 0.8 percent and Formosa Petrochemical was up 1.7 percent at midday in Taiwan, both bucking the broader market index , which was down 0.34 percent.

Wang and Gou, two of Taiwan's top business leaders, made their comments as they met on Monday evening with president-elect Ma Ying-jeou, who made improving Taiwan's economy by forging closer ties with China a central issue in his campaign.

Ma is aiming to speed up implementation of passenger, cargo and mail links between Taiwan and China.

Direct movement of goods and people across the Taiwan Strait is now limited or non-existent, with all travel and shipments having to pass through third locations such as Hong Kong.

Ma, who takes office in May, has said he would like to implement regular weekend cross-strait charter flights by July.

China has claimed sovereignty over self-ruled Taiwan since the Chinese civil war ended in 1949, and Beijing has threatened to use force against the island if it formally declares statehood.

Despite sometimes tense political relations, however, China has become the favourite investment destination of Taiwan firms, who have pumped up to $100 billion into their mainland operations over the last two decades.

The same businesses complain that investment restrictions and the absence of direct transport links put them at a competitive disadvantage and, in some cases, have kept them from investing more in their home market. (Reporting by Doug Young; Editing by Edmund Klamann)