Wang Yung-ching, chairman of Taiwan's petrochemical giant Formosa Plastics Group, said Taipei's "patience over haste" mainland investment policy had hurt local industries.

"Taiwan businesses are very worried," the 81-year-old Wang told the Taipei Foreign Correspondents Club.

"They are worried about their future and whether they will be able to stay competitive.

"All I hope is the government will make some mild change in its policy... Renowned international companies have started to invest in petrochemical projects in the mainland. We fear we will lose our opportunity if we invest later."

Taipei, a rival with Beijing since the Communists won the Chinese civil war in 1949 and drove the defeated nationalists into exile on the island, bans direct investment and trade withChina.

It also bars local firms from investing in mainland infrastructure and strategic industries, including petrochemical and power plant projects.Since a political thaw began in the late 1980s, some 30,000 Taiwan firms have poured some $38 billion into the mainland through "indirect" investment, making Taiwan one of China's top overseas investors and China one of Taiwan's most important markets.

In the first seven months of 1998, Taiwan's indirect investment in China grew 21.6 per cent to $928.66 million from the same 1997 period, the official figures showed.

Worried that its economy may become overdependent on its adversary's economy, Taiwan has called for "patience over haste" in mainland investment and encouraged investors to go to Southeast Asia instead.

Wang abandoned plans for a $6-billion petrochemical complex in China's coastal Fujian in 1992 under pressure from the government.

He said that his group would be forced to sell its stake in a $3-billion China thermal power plant in Fujian'sZhangzhou if Taipei did not ease its ban.

Wang said Formosa had originally committed to hold 60 per cent in the power plant, but the investment had been put on hold due to the government's objection.

The project is currently financed by Formosa's foreign partners which hold the remaining 40 per cent.He said that the group would begin selling its stake to interested foreign parties if the government did not revise its policy soon.

"The project cannot be discontinued. If the government's policy does not change by the time the funds run out, we have no choice but to transfer our stake to someone else.