The government announced earlier this week that bans on investment in China for the domestic panel industry will soon be lifted, which is generally considered a wise move that will boost the global competitiveness of Taiwan's panel makers. However, experts also warn that the authorities should not underestimate the policy's potential impacts on the island's industrial structure.

The Ministry of Economic Affiars has announced the loosening of restrictions to let local panel companies to invest in China.

Local panel manufactures AUO and ChihMei are able to apply to invest in factories in China to make the 8.5 panels.

Though most are happy to see the change, but it seemed that they are all disappointed for the change came too late.

Last year, the government already allowed AUO to invest 7.5 panel manufacturing in China, however, those making the same products in China took all the operating licenses, while the government required the investment to be brand new factories and would not be in the forms of buying shares, which meant that AUO could not benefit from the policy change.

The updated change in policy means that AUO can buy shares of Long Fei 7.5 panel in China or set up a brand new 8.5 plant.

However, scholars pointed out that, one of the twin star program aims at the photonics industry in China, thus the government should start looking at the problem of industry transformation locally.

According to the new regulation, AUO and ChihMei must set up their own 8.5 panel manufacturing facility in Taiwan, at the same time, start new generation research and development plan before the Ministry is going to approve of their investment in China with a maximum of 3 plants each.

Some scholars pointed out that , Taiwan is loosening investment in China , allowing fund to go to the other side of the strait, while encourage Taiwanese business to invest in Taiwan to go IPO, which would drain fund in Taiwan, the Taiwanese manufacturing structure and economic performance are going to be greatly impacted.