China and Taiwan, governed separately since a civil war six-decades ago, agreed to give each others companies greater access to their services markets as commercial ties deepen across the Taiwan Strait.
The agreement allows Taiwanese companies to take controlling stakes in China joint ventures, streamline approvals and expand geographic operations in sectors including banking, hospitals, construction and tourism, according to the text of the pact posted on Taiwan’s Straits Exchange Foundation website. It was signed today in Shanghai by the heads of the SEF and China’s Association for Relations Across the Taiwan Straits.
Economic ties have surged since Ma Ying-jeou became Taiwan’s president in 2008 and instituted policies to build relations with China. The sides in 2010 signed the Economic Cooperation Framework Agreement, or ECFA, which has paved the way for other pacts including one for investment protection reached last year, today’s services accord and another for agricultural and industrial goods still under discussion.
Today’s agreement “marks the first significant progress in the expansion of cross-strait commercial ties” since ECFA, Peter Kurz, head of Taiwan research at Citigroup Inc., wrote in a June 18 report. The financial industry will be the biggest beneficiaries, he wrote.
The services agreement signed today ratifies measures announced earlier that allow Chinese investors to hold larger stakes in Taiwan banks and establish pilot areas in which Taiwanese brokerages can hold controlling shares in China ventures, according to Kurz.
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