Taiwan looks to China financial pact in October

Taiwan plans to sign an agreement with China in October that will
allow some of the mainland's huge pool of liquidity to start flowing
into the island's stockmarket, local media said Monday.
Representatives from the two sides could sign the memorandum of
understanding in Taiwan, China or Hong Kong, the Commercial Times
said, citing unnamed sources. Once it is signed, Chinese
institutional investors will be allowed to buy shares on the Taiwan
Stock Exchange, which has so far been closed to Chinese money,
according to the paper. banks will also be permitted to upgrade their
representative offices in China to branch status, meaning they can
start engaging in business for profit. Meanwhile, the Economic Daily
News reported that Taiwan expects to kick off negotiations on a
separate trade agreement with China in October. The island's new
premier Wu Den-yih, who took office last week, has asked his Cabinet
to prepares for negotiations on the pact, known as the Economic
Cooperation Framework Agreement, the paper said. Taiwan is waiting to
hear from China if it agrees to holding talks next month, the report
said. The pact is seen as key in maintaining Taiwan competitiveness
in the Chinese market at a time when other economies in the region are
all negotiating free-trade agreements with Beijing. Officials from
the economics ministry and government information office declined
comment when asked Monday to confirm the reports. President Ma
Ying-jeou of the China-friendly Kuomintang was voted to power last
year on a promise to bring about a better relationship with China,
which is increasingly seen as holding the key to the island's
economic future. Wu became premier in a cabinet reshuffle last week
after his predecessor resigned over criticism against the government
response to Typhoon Morakot in early August which left more than 600
people dead.