On Wednesday, the Ministry of Economic Affairs announced that Taiwan's Government will now allow that Island's flat-panel manufacturers to carry out production in China, and also allow chip makers to invest in their Chinese counterparts.

Now, makers of flat-panels can invest and set-up "fifth-generation" production units of less advanced plats, as has been confirmed by the Ministry. These plants can produce panels for computer displays.

The sector's most advanced manufacturing unit uses tenth generation technology and can make TV panels which are larger than 60 inches. If, the Ministry has specified, manufacturers want to go ahead and set up "sixth-generation" plants across China, the technology used in the unit must be less advanced that the one which is employed in Taiwan.

Also, the Ministry said that contract chip manufacturers will now be allowed to either invest in, or purchase, their Chinese peers. While confirming that the current restrictions would "soon" be lifted, Minister of Economic Affairs Shih Yen-Shiang refused to give a specific timeline.