Financial Reforms Open China to the Taiwanese

Jan. 16 marks the beginning of the next stage of engagement between Taiwan and China. That's when three long-awaited memoranda of understanding (MOU) come into effect liberalizing financial ties across the Taiwan Strait. The agreements, signed on Nov. 16 by Taiwan's Financial Supervisory Commission (FSC) Chairman Sean Chen and three counterpart agencies that oversee Beijing's banking, insurance, and securities sectors, allow financial institutions in both countries to set up liaison offices or upgrade such offices into branches.

But the MOUs are only the beginning. Compared with other countries, Taiwan is entering the China market late in the game, and the many hurdles set up by Chinese regulators for foreign players to enter their market have made it difficult for them to be competitive. That's one reason Taiwanese are now focusing on a proposed free-trade deal with the mainland called the Economic Cooperation Framework Agreement (ECFA), which will determine how each side will get preferential treatment beyond the WTO framework. In an interview, Chen speaks confidently of what Taiwan's government will achieve through its negotiations. "A level playing field is what we are going to achieve," he says.