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By Christine Gaylican, Opalesque Asia :
A so-called cross-strait financial Memorandum of Understanding (MOU) has been signed last night that will allow mainland China-based finance companies to set up financial branches and liaison offices in Taiwan.
This was confirmed by separate statements received by Opalesque from the offices of the Taiwan's Financial Supervisory Commission chairman Sean Chen and from Liu Mingkang, head of the China Banking Regulatory Commission.
The MOU, which will take effect on January 16, 2010, highlights also that the Chinese QDII investment limit will be raised from 3% to 10%, translating into US$ 1.2bn-3bn, which could be invested in Taiwan.
Bank of China and Industrial & Commercial Bank of China are vying to be the first lenders to open branches there. Taiwan has accounted for as much as US$ 200bn of investment in mainland China and has 100,000 companies operating there.
Nevertheless, analysts are concerned of some unspecified details in the MOU especially if Taiwan-based financial companies can set up branches and subsidiaries easily in mainland territories.
Unspecified details raise concerns
According to an analyst from MF Global Singapore Pte Ltd, the financial industry in Taiwan is awaiting the final details of the Economic Cooperation Framework Agreement (ECFA), which is still being negotiated. The EDFA will outline more specific details on the market entrance requirements, investment restrict...................... To view our full article Click here
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