Breaking News, World News and Taiwan News.

Updated Thursday, March 18, 2010 10:57 am TWN, By Janet Ong, Bloomberg

Sponsors
▪	Get the best deals for Guangzhou Hotels or choose from more than 10,000 hotels in 499 Chinese cities.
▪	Find great real time deals on China Flights. Book flights to China or China domestic flights 24/7.
▪	Buy china wholesale products from reliable chinese wholesalers on DHgate.com!
▪	Save 75% for all hotels in Shanghai, Beijing and whole China. Lowest rates for Flights in China.

Cathay Financial plans to accelerate expansion

TAIPEI, Taiwan -- Cathay Financial Holding Co., Taiwan's biggest publicly traded financial services company, will accelerate expansion in China after the island's regulators announced cross-strait investment rules for financial companies.

Cathay Financial plans to apply to the island's regulator to upgrade its banking unit's representative office in Shanghai to a branch allowing it to offer banking services to corporate clients, President Chen Tsu-pei said by phone yesterday. Taiwan's parliament needs to give final approval before the Financial Supervisory Commission can start accepting applications, he said.

Taiwan's government Tuesday announced details of an accord with China on investments in financial companies across the Taiwan Strait, the latest agreement to underscore warming ties six decades after a civil war. Taiwan President Ma Ying-jeou is seeking closer ties with the island's biggest trading partner to bolster an economic recovery.

“We aim to boost our banking presence in the mainland, which is our weakest link as we already have life and property insurance ventures in China,” Chen said. “This is the first step and we aim to build up our banking operations in Shanghai before considering expanding into other cities in China.”

The Taipei-based company plans to invest at least 200 million yuan, in accordance with Chinese regulations, for the upgrade, Chen said.

Cathay Financial rose 3.6 percent in Taipei trading yesterday.

Taiwanese banks, insurers and stock and futures brokerages will each be allowed to invest in one Chinese counterpart and vice versa, the Financial Supervisory Commission said Tuesday. Domestic banks will be allowed to invest as much as 15 percent of their net worth in China, while mainland banks can set up representative offices and branches in Taiwan, or acquire a maximum 5 percent stake in Taiwanese counterparts.

Cathay Financial in 2005 formed a life insurance venture with Shanghai based China Eastern Air Holding Co. and two years later formed a property and casualty insurance venture in the mainland.

Taiwan and China have been ruled separately since Chiang Kai-shek's Kuomintang, or Nationalists, fled to the island after being defeated by Mao Zedong's Communists in 1949. China regards Taiwan as part of its territory.

Subscribe to The China Post and save 25%. Click here