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Updated Saturday, January 16, 2010 10:18 am TWN, The China Post news staff

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Chinese capital coming

For investments in companies providing other financial services, the stake to be held by each QDII should not surpass a 5 percent limit while the total stakes of all QDIIs will be confined to 10 percent.

For investments in listed natural gas companies and enterprises directly invested by the Ministry of Economic Affairs, the stakes held by each QDII and all QDIIs are all limited to 10 percent.

The stakes held by each QDII and all QDIIs in listed companies offering shipping services are all limited to 8 percent.

The financial supervisory authorities in China have so far approved a combined capital of NT$370 billion in terms of net value raised by all QDIIs.

Two of the QDIIs set up in China have already received approval from the SFC for investments in Taiwan's stock market.

Concerning other financial interchanges reached between the two sides across the Taiwan Strait, SFC officials said the details are still being reviewed by the Cabinet.

Although the principles of allowing the establishment of offices and branches by financial institutions on each other's market and cross-stockholding among the institutions were set in the MOU, the details are still under review since the government is taking a more prudent and meticulous approach, they said.

However, many other matters like QDII investments, exchange of financial data and information, and interchange of personnel in the financial sectors between Taiwan and China will take effect immediately, they explained.

Wang Li-jung, a senior economist and researcher at the Chung-Hua Institution for Economic Research (CIER), a leading think tank in Taiwan, suggested that SFC seek special deals for QDIIs based in Taiwan.

According to the QDIIs rules set by Beijing's finance authorities, Taiwan has only two securities investment and consulting firms meeting the criterion of owning at least US$5 billion in capital in order to make investments in China's stock market.

Taiwan will have nine qualified investors if the Chinese side can readjust the capital requirement to US$4 billion for investment firms based in Taiwan, she said.

The special considerations for Taiwan firms' capital requirement should be included in the agenda of future cross-strait negotiations, she suggested.

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