Reuters

TAIPEI, July 29 (Reuters)- Taiwan on Wednesday strongly condemned atrocities carried out against ethnic Chinese during last May's riots in Indonesia, saying the violence harmed local desire to invest there just when investment was needed most.

Foreign minister Jason Hu summoned Indonesia's representative in Taipei to express the government's grave concern over the attacks that have aroused popular anger in Taiwan.

``On behalf of the government, I strongly condemn such barbaric violence,'' Hu was quoted in a ministry statement as telling Djoko Muljunto, chairman of the Indonesian Economic and Trade Office to Taipei.

``We urge the Indonesian government to protect lives and properties of the Taiwan businessmen and overseas Chinese and to prevent the racial issues from getting out of control again.''

The office is Jakarta's de facto embassy in the absence of formal ties. Indonesia recognises Taipei's arch-rival, the communist People's Republic of China in Beijing, not the exiled Republic of China on Taiwan.

Beijing too has voiced strong concern and urged Jakarta to investigate the violence.

Hu said Taipei would offer assistance to ethnic Chinese who wanted to receive medical care in Taiwan.

Indonesian human rights groups have said about 1,200 people were killed-- and more than 150 women raped-- during the May 13-15 riots, which led to the resignation of strongman Suharto.

Ethnic Chinese have long been a target of mob violence in Moslem-majority Indonesia, resented for their perceived wealth.

Though they make up only four percent of Indonesia's 200 million population, ethnic Chinese control the bulk of its non-land wealth and were prominent among the victims of looting, arson, beatings and rape during the May riots.

Extensive media coverage of the rapes of Chinese women has triggered fury in Taiwan and other Chinese communities around the world, with various groups posting information and

grievances on the Internet.

In Taipei, activists have demonstrated against violence while business leaders have urged investors to withdraw.

Economic Minister Wang Chih-kang said Taipei no longer would actively promote investment in Indonesia-- in effect weakening a strategy of steering Taiwan capital away from rival China.

Wang said crisis-battered Indonesia was paying a price for tolerating ethnic violence.

``The incidents have seriously affected Taiwan businessmen's investment willingness. Indonesia will face negative consequences,'' Wang said.

Taiwan investment in Indonesia shrank an annualised 70 percent or more in the first half of 1998, Wang's ministry said.

Top economic policymaker Chiang Pin-kung said Taiwan did not plan to alter its longstanding ``southbound'' policy of promoting investment in Southeast Asia rather than China.

Several tycoons nevertheless have urged Taiwan investors to withdraw from Indonesia, and ruling Nationalist Party financial chief Liu Tai-ying said he too had soured on Indonesia.

``Indonesia will be our lowest priority,'' said Liu, who oversees the party's US$3 billion investment portfolio and is chairman of venture capital giant China Development Corp, an active investor in Southeast Asia.

General Chamber of Commerce chief Wang You-tseng bluntly urged investors to leave.

``If Indonesia cannot protect investors, we recommend that they withdraw their investments,'' Wang said.

Activists led by Taiwan's opposition New Party handed a letter of protest to Indonesia's office in Taipei, demanding Jakarta apologise for the attacks, conduct a thorough investigation and compensate all victims.