A new bill approved by Taiwan's legislature Saturday will let the government buy billions of dollars in stock to help protect financial markets against hostile moves by China.
Critics say the idea violates free market principles.
The plan will also allow the government to head off speculation by foreign funds, he said. That prompted China to repeat threats to retake the island and triggered a sell-off in the Taiwanese stock market. Taiwan and China split amid a civil war in 1949, but Beijing insists the sides will reunify, by force if necessary. The money for the stabilization plan will come from government pension funds, the labor insurance fund and bank loans using government-owned stocks as collateral, officials said. A committee of scholars and members from various political parties will be set up to oversee operations.