Government to liberalize cross-strait finance deals

Taiwan will soon liberalize cross-strait financial dealings amid burgeoning China-bound investments, a local Chinese-language daily reported yesterday. The cabinet would initially allow local banks' offshore banking units to offer financial services to Taiwanese businesses in China, the paper quoted Vice Premier Lai In-jaw (賴英照) as saying.

The liberalization, proposed by the central bank and the finance ministry, would soon be adopted, Lai told the paper without giving more detail.

Thirty-eight local banks are operating offshore banking units. Taiwan currently bars domestic banks from making business dealings in China.

Lai said local banks would also soon be permitted to open representative offices in China to gather market information and familiarize themselves with Chinese regulations.

Lai said the moves, part of the island's financial reforms, were mainly aimed at providing local banks with more access to the financial conditions of the Chinese operations of their Taiwan clients.

Taiwan has already allowed local insurance companies to open representative offices there since March last year. Four life insurers and eight property insurers have received the green light from Taipei for their mainland operations.

Meanwhile in related news, the Investment Commission under the Ministry of Economic Affairs approved 13 investment projects by local corporations to indirectly invest in China worth a total of US$100 million, the agency announced yesterday in a statement.

Applications by Asustek Computer Inc (華碩電腦) and VIA Technologies Inc (威盛電子), which were previously put on hold by the Investment Commission, were approved this time.

Asustek plans to remit US$25 million to increase its investment in a Chinese power supply producer and distributor, while VIA's application to remit US$12.78 million in setting a wholesale and retail business company in China received the go-ahead.

The Investment Commission yesterday also approved Ruentex Construction & Development Co's (潤泰建設) application to increase its investment in a Chinese retailer by US$8.4 million and China Synthetic Rubber Corp (中國合成橡膠) got approval to invest US$6 million to set up a chemical company in China.

Taiwan government forbids direct investment in China but domestic companies and individuals have invested about US$50 billion in China over the past decade, according to an estimate by Perng Fai-nan (彭淮南), Governor of the central bank.