Success in Nanjing

P.K. Chiang, chairman of the Straits Exchange Foundation (SEF), signed the agreements on financial cooperation, regular flights across the Taiwan Strait, and joint efforts to fight crime with his Chinese counterpart Chen Yunlin at the former capital of the Republic of China in the afternoon. Chen, chairman of the Association for Relations Across the Taiwan Strait (ARATS), spoke before the signing, pledging more foreign direct investment in Taiwan and welcoming Taiwan entrepreneurs to invest in China.

SEF and ARATS are quasi-governmental organizations charged with the conduct of relations between the two sides of the strait.

They met for the third time since President Ma Ying-jeou was inaugurated in May of last year, easing the tensions across the strait, while his predecessor Chen Shui-bian carried on his policy of creeping independence for Taiwan.

Under the agreement on financial cooperation, both sides would set up a regulatory framework for financial services firms to invest and do business in each other's markets.

On-site inspection would be allowed, financial information exchanged and settlement of accounts set in place.

They also agreed to gradually establish a clearing system between the Taiwan dollar and China's renminbi currency.

Agreement was also reached in principle to allow certain forms of Chinese investment in Taiwan.

At present, no Taiwan banks, securities firms or insurance companies are allowed to open branches in China. They will be able to sign memorandums of understanding to expand their business. Regular flights could start after the agreement goes into force. They will increase to 270 weekly flights. Currently, only 208 chartered flights are made per week.

Moreover, six airports in China would be opened to flights from Taiwan, including ones in Ningpo, Nanzhang, Zinan and Harbin.

One new air route each is allowed in the north and the south. Direct flights will be allowed between Taiwan and Beijing, as well as Manchuria, to ease heavy air traffic over Shanghai. Flights from Taiwan may pass the air traffic control zone of Guangzhou in the south. But no agreement was reached on Taiwan's connecting flights rights in China.

Data will be exchanged between Taiwan and China to jointly fight crime. China would also extradite criminals wanted in Taiwan and help investigate crimes committed by Taiwan suspects residing on the Chinese mainland.

Most of the criminals and suspects are wanted for smuggling, embezzlement, dope-trafficking and money forgery.

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