Taiwan and China will fully begin “early harvest” programs on Jan. 1 for the Economic Cooperation Framework Agreement (ECFA) that was signed in late June, which will allow faster access to China’s banking and insurance markets for local companies, a statement released by the Ministry of Economic Affairs said yesterday.
The latest opening is mostly for the service sector, including banking, insurance, securities and hospital operation, following the announcement earlier last month of a preliminary early harvest list.
This time, China is set to open 11 parts of the service sector to local firms starting next month, while Taiwan will open nine, the statement said.
“Taiwanese banks will take only one year to upgrade their Chinese representative offices to branches within one year after establishment, rather than two years, as it used to be,” said Chang Chun-fu (張俊福), deputy director of the Ministry of Economic Affairs’ Bureau of Foreign Trade by telephone, allowing local companies to rapidly expand their business to China.
Under the ECFA, Taiwanese banks will be allowed to provide services in yuan to their Taiwanese customers if their Chinese branch is profitable in the first year of operations and will be allowed to expand the yuan services to other customers after two years of profitable operations.
Entry barriers to China’s insurance market will be lowered as well. Taiwanese insurers will be allowed to enter the Chinese insurance market via a strategic alliance with local peers rather than on their own, in order to meet China’s capital requirement, according to the ministry’s statement.
Taiwanese insurance companies can establish insurance firms in China if the group or joint venture has capital of more than US$5 billion, has operated for 30 years and establishes an office in China for two years.
Taiwanese companies will also be permitted to operate hospitals or aircraft maintenance companies by themselves or through joint ventures with Chinese partners in some areas of China, such as Jiangsu Province, which has usually been the first Chinese base for Taiwanese corporations, the statement said.