China and Taiwan plan to set up a cross-strait equity exchange center in the mainland’s southeastern province of Fujian as relations between the two sides improve.
The center may be funded by 10 institutions including China’s state-owned Xiamen Jinyuan Investment Group and a unit of Taiwan’s SinoPac Financial Holdings Co., SinoPac Chief Financial Officer Michael Chang said by phone today.
“It’s an exchange for junior shares, aiming to help early stage or small companies in China to raise funds,” he said.
The announcement follows other signals of strengthening links between the two sides. China and Taiwan can consider starting military exchanges to ease concerns over military security, the official Xinhua News Agency reported yesterday, citing a summary from a cross-strait non-governmental peace forum.
Other funders of the equity-exchange center include Xiamen Rural Commercial Bank, Guosen Securities Co. and Citic Securities Co., China National Radio reported today, citing Wang Juan, the center’s manager.
The plan is still at an early stage and SinoPac needs Taiwanese financial regulator’s approval for the investment, SinoPac’s Chang said.
“From SinoPac’s standpoint, we aim to help mid- to small Taiwan companies in China to raise funds by equity or debt, as it’s hard for Taiwanese companies to list A shares,” he said. SinoPac is the only Taiwan company involved, and after the project gets under way it plans to invite other businesses from the island to join, according to Chang.
China’s President Xi Jinping seeks to address a six-decade division with Taiwan after forging closer economic ties.
China doesn’t object to trade ties between Taiwan and the European Union, Hua Chunying, a Chinese foreign ministry spokeswoman, said yesterday in a statement posted on the ministry’s website. Hua was responding to the announcement that the EU may start investment agreement discussions with the island. Still, China rejects official relationships between the two parties, she said.
Taiwan’s President Ma Ying-jeou, whose approval rating has fallen to below 10 percent, has called for boosting political trust with China through closer communication.
Improved ties with China has helped bolster Taiwan’s economic growth as tourist spending surged and trade increased under Ma’s administration. Ma, who came to power in 2008, must balance improved relations with concerns that the mainland would dominate its smaller neighbor.
“After these five years of effort, the Taiwan Strait today has become one of the most peaceful waterways and most prosperous passageways in Asia,” according to Ma’s National Day address on his website. “The two sides should utilize frequent contacts and interaction to boost political trust, and should continue expanding and deepening exchanges in a variety of fields to further the people’s welfare.”
— With assistance by Feifei Shen, and Cindy Wang