Taiwan businessman Wei Jen Tiao is looking forward to an Economic Cooperation Framework Agreement (ECFA) that will finally give him full access to the mainland's huge fund market.
Having established the first representative office of Taiwan's non-banking financial services on the mainland in 1997, Tiao has been anticipating the day his company, CSC International Holdings Ltd, will be allowed to do business in Shanghai.
"We are in discussions with potential business partners and will hopefully start a joint venture and then a fund company after a memorandum of understanding on financial supervisory cooperation (between Taiwan and the mainland) is signed in July," he said. "But there could still be differences on market access conditions, and how big our business can be depends on how open the mainland market will be."
An ECFA is expected to stipulate the standards of the opening.
"I think the meeting between President Hu Jintao and Kuomintang Chairman Wu Poh-hsiung will at least set up a time line to sign the ECFA. I hope it will be completed within this year because businesses across the Straits are in urgent need of such an incentive to stimulate recovery from the crisis."
Currently, trades between the mainland and Taiwan are carried out mainly according to agreements with the World Trade Organization (WTO).
Because the process is handled through the buffer of the WTO, parties sometimes are left feeling there is imbalance in the trading, according to Tiao, chief representative of the CSC International Holdings Ltd Shanghai Representative Office.
"An ECFA will solve the problem," he said.
Tiao believes that with non-Kuomintang businessmen and politicians participating, the political atmosphere in Taiwan will improve.
Shih-Ming Simon Tu, executive director of Shanghai Shengong Environmental Protection Co Ltd, believes an ECFA will establish normalized exchanges across the Straits for industry, investment, civil affairs and infrastructure and largely benefit both sides in social and economic development.
"It will help businessmen on taxation, on establishing standards, i.e. on finance and telecom, on investing in the other side and in cultural exchanges."
Noting that the cross-Straits exchange has improved dramatically in the past year since the last meeting between Hu and Wu, Tu said he expects the ECFA will be signed soon.
"I hope the ECFA will be signed early next year. But, before it is signed, I hope entrepreneurs will be allowed to participate in it and give suggestions. In that way, the ECFA will better meet our needs."
Taiwan is the fourth-biggest investor in the mainland after Hong Kong, Japan and the US. More than 500,000 people from Taiwan live in the Yangtze River Delta, investing $80 billion yuan in more than 350,000 projects. The companies provide millions of jobs and play a key role in the area's development.
In Shanghai, Taiwan's investment represents 15 percent of investment from all overseas groups.
(China Daily May 27, 2009)
