Taiwan, China to Meet for Talks This Weekend

TAIPEI, Taiwan, April 23 -- In a stride toward economic integration, Taiwanese and Chinese negotiators will meet this weekend to conclude agreements paving the way for Taiwanese banks to operate on the mainland and for an expansion of direct flights between Taiwan and China.

The talks in Nanjing are expected to yield a legal cooperation accord that will enable the historic enemies to work together in fighting crime. There also will be discussions on lifting restrictions on Chinese investments in Taiwan's real estate, services and manufacturing sectors.

"It's a demonstration of continuous political goodwill and determination to strengthen economic ties," Andrew Yang, secretary general of the Chinese Council of Advanced Policy Studies, said in Taiwan.

The talks reflect Taiwanese President Ma Ying-jeou's policy of lowering tensions with Beijing by focusing on practical business issues. Taiwan also hopes the accords will stimulate its export-oriented economy, which has been ravaged by the global financial crisis.

Taiwanese financial firms have been clamoring to enter China's fast-growing market. Their executives say Taiwanese banks, some of which have offices in China but cannot offer banking services there, particularly could serve the estimated 1 million Taiwanese businesspeople based in China.

But implementation of the accords is likely to be slow as China and Taiwan work to remove almost 60 years of stiff restrictions. The talks are in their third round, and analysts said that unlike accords signed last year for daily charter flights and expanded tourism, some of the new agreements are complex and unlikely to bring immediate results.

"The difficulties and challenges will increase," said Chu Jingtao, an expert on Taiwan at the Chinese Academy of Social Sciences in Beijing.

The broad financial cooperation agreement, which will cover banking, securities and futures, insurance and a currency exchange and clearance mechanism, is expected only to clear the way for more detailed negotiations. It will allow Chinese and Taiwanese regulatory agencies to draft memorandums of understanding for particular industries, the Taiwanese Mainland Affairs Council said.

Even instituting regular, direct flights is proving to be difficult. Taipei would like to triple its existing 108 weekly charter flights and expand to more than one Chinese destination. But senior Taiwanese officials recently said that Chinese airlines do not want to give up their monopolies and that Hong Kong, which receives the lion's share of China-bound flights from Taiwan, is concerned about damage to its tourist industry.

Researcher Zhang Jie in Beijing contributed to this report.