China and Tawian are getting a long better now than I can ever remember--:shrug:
From Chineses paper--
Taiwan frees up financial ties with China
By Kathrin Hille in Taipei
Published: June 26 2008 23:16 | Last updated: June 26 2008 23:16
Taiwan?s government on Thursday announced a clutch of reforms to liberalise financial links with China in hopes of generating a economic boost that would counter a rapid drop in public support.
Since taking office as president last month after a landslide election victory, Ma Ying-jeou has moved quickly to fulfil a campaign pledge to close a deal with China to open regular non-stop passenger flight links and increase tourist flows from the mainland. But his opinion poll ratings have dropped, with observers blaming the slide on unrealistic expectations that the change in government would resolve economic problems overnight.
The cabinet said on Thursday that it would allow Taiwanese brokerages to invest in their Chinese peers; loosen restrictions on mutual funds buying Chinese and Hong Kong stocks; scrap rules that ban foreign institutional investors backed by Chinese capital from investing in the Taiwan market; open mutual listings of exchange-traded funds between Taiwan and Hong Kong; let Hong Kong-listed companies seek a second listing in Taipei; and allow the exchange of Chinese currency in Taiwan.
The promises, in particular the relaxation of restrictions on mutual funds, have the potential to revitalise Taiwan?s market.
?We found that we are the only country in the world that applies such China-specific restrictions and that this works against our goal of becoming an asset management and fund-raising centre,? said Susan Chang, deputy head of the island?s financial regulator.
The Taiwan stock market has tracked Mr Ma?s sliding ratings, retrenching back to levels last seen before his election victory in March. The Taiwan Weighted index closed at 7,811.80 points on Thursday, 19 per cent down from its level on the eve of Mr Ma?s inauguration.
According to an opinion poll published on Thursday by Global Views, a local magazine, 46 per cent of respondents were dissatisfied with the president?s performance and only 38 per cent were satisfied.
But the public has started to realise that further opening the economy to China may not save Taiwan from an increasingly challenging global economic environment. ?The key threat for the Taiwan economy ? as for most neighbours ? is inflation,? said Cheng Cheng-mount, an economist at Citigroup in Taipei.
Citing inflationary pressures, Taiwan?s central bank raised interest rates on Thursday for the 16th straight quarter, by 12.5 basis points to 3.625 per cent. Taiwan?s inflation rate was 3.71 per cent in May. The government aims to contain inflation at 3.3 per cent for the year.
Copyright The Financial Times Limited 2008
