20 Dec 2008
Dec. 20 (Bloomberg) -- China offered to help Taiwan cope with the deepening global financial crisis and proposed broader financial links at a forum that will set the stage for further government-level talks after a nine-year suspension.China is ready to help Taiwan and the two sides should discuss a financial supervisory mechanism for banks, securities and insurance firms as well as a currency-clearance mechanism, Jia Qinglin, a Politburo member, said at a forum in Shanghai.
Officials of Taiwan's ruling Kuomintang and their Chinese counterparts are meeting to hammer out a consensus on broadening financial ties as their economies face a worsening global recession. Taiwanese businessmen have already invested an estimated $150 billion in China and have been clamoring for Taiwan financial companies to be permitted to offer services to ease access to financing and capital.
"An agreement could enable us to upgrade our four securities representative offices in China to branches," said, Lin Shau-dai, chairman of Polaris Securities Co., Taiwan's largest online brokerage. "It might allow us to enter China's futures and asset management businesses, which are still banned for the moment."
Taiwanese banks and securities firms can only operate representative offices, which aren't permitted to offer any financial services. A consensus reached at the two-day meeting will likely form the basis for the governments of both sides to sign a memorandum of understanding on financial ties in the first half of next year.
Thawing Relations
The forum comes amid a thaw in ties after Taiwan and China on Dec. 15 ended a six decade-ban on direct transport and postal links. The resumption of links may boost the island's $380 billion economy, which is headed for its first recession in seven years.
Ties between Taipei and Beijing improved significantly since the KMT's Ma Ying-jeou took office in May and dropped the pro-independence stance of his predecessor Chen Shui-bian.
"We should jointly cooperate in seeking a practical model for dealing with the financial tsunami," KMT chairman Wu Poh- hsiung told the forum. "We have a concrete plan to support Taiwanese businessmen, who are facing increasing difficulties in access to financing."
Both sides should also give access to participation in public construction projects to bring in capital and experience in management and technology, Wu said.
Complimentary Ties
"We can now expect Taiwan and China to complement each other," said Jason Chang, chairman of Taiwan-listed Advanced Semiconductor Engineering Inc., the world's largest chip packaging and testing company. "We can unify China's huge funds and market and Taiwan's experience in liberalization and management talents."
The forum is the fourth annual summit since Chinese President and Communist Party leader Hu Jintao in 2005 met former Kuomintang Chairman Lien Chan, ending more than 60 years of hostility between the two political parties.
The KMT's Wu and Honorary Chairman Lien are leading a delegation of about 150 KMT officials, business executives and academics. Resumption of regular semi-official exchanges had been slow as both sides of the Taiwan Strait regarded each other with suspicion, even as almost 1 million Taiwanese already live and work in China.
Direct links had been banned since the end of a civil war in 1949, when Mao Zedong's victorious communist forces took control of China's government and drove Chiang Kai-shek's Nationalist army to Taiwan, where they've maintained a separate government since. The Chinese government still regards Taiwan part of its territory and aims hundreds of missiles at the island to prevent it from declaring independence.
