TAIPEI, June 17 (Xinhua) -- Investors from Taiwan will be able to expand their investment in key mainland industries if a cross-Strait economic pact can be reached, said a mainland banker here Thursday.
Taiwan investors can join in the mainland's restructuring of ten major industries including car making, shipbuilding, chemical and machinery, that started last year, said Dai Xianglong, chairman of the National Council for Social Security Fund (SSF), at a seminar held in Taipei.
If the Economic Cooperation Framework Agreement (ECFA) can be reached, it will be a breakthrough for cross-Strait investment and trade, said Dai, who was the governor of the People's Bank of China from 1995 to 2002.
"Taiwan investors can have a stake in mainland state-owned enterprises, or even buy them completely," he said. "With the ECFA, I expect Taiwan's investment in the mainland will grow much faster than it has over the past few years."
But, he said mainland investment in the island will be limited to certain industries which the mainland already has an advantage in.
Business people from both sides are also likely to set up joint ventures, he said.
The two sides have just finished the third round of the experts meeting on the ECFA in Beijing last weekend. Both sides hope to complete the pact in June, though there are still some disagreements over the "early harvest program."
The ECFA is intended to normalize mainland-Taiwan economic ties and bring the two economies closer.
Taiwan's financial companies, particularly, will get new business if the ECFA is reached, Dai said.
Under the framework, Taiwan financial companies can set up branches, hold stakes in mainland banks and even operate business in Renminbi, he said.
Authorities on the two sides might increase the quota of qualified institutional investors and raise the investment ceiling for investors across the Strait if the ECFA is reached, he said.
With the ECFA, banks can exchange the Reminbi and New Taiwan Dollar directly without having to go through the U.S. dollar, he said.
At another forum held in Taipei Tuesday, Taiwan experts and local officials said they expect the ECFA to redistribute resources and restructure the economy across the Strait.
"It will give both sides a good chance to restructure their economies. They both strongly depend on export and labor-intensive industries which face some challenges now," said Bih Jane Liu, vice president of Chung-hua Institution for Economic Research, a think tank in Taiwan.
