Analysts hailed the specifics of banking links with China -- announced as an accessory to the government's small-three-links plan which will go into effect on Monday -- as they may serve as a precursor for increased financial integration between Taiwan and China.
"Any step towards greater economic integration on a level playing field is a positive move," said Neal Stovicek, head of equity research at National Securities Corp (
The Central Bank of China (
This latest move is seen as an attempt to aid the small-three-links policy between the two offshore islands and Fujian province, expected to go into effect on Monday.
Beijing, which promotes direct links, says the latest proposal "fails to live up to the expectations of Chinese people," despite the fact that the communist-led nation has not questioned its citizens regarding links issues.
Financial integration between the two sides is easier said than done. Taiwan's already unyielding stance towards captial flows will not help, analysts say.
"It would be difficult for the government not to monitor the capital flows," an analyst at a leading asset management house in Taipei, requesting anonymity, said. "The new regulation is more of a symbolic move than anything else."
Nevertheless, fears over possible financial firewalls may deter traders from remitting money to China.
"Much remains to be seen with regards to how the monetary arrangement actually works," said Spencer Chiu (
Taiwan's cautious approach towards capital flows however is particularly evident in its reluctance to allow direct exchange between the yuan and the NT dollar.
The Ministry of Finance (
You Ming-nan (
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