* To allow Taiwan firms to hold majority stake in China
* Says welcomes Taiwan pensions to invest in China via RQFII
* No timetable given on steps to boost financial ties with
* Cross-strait financial ties lag closer ties in
(Adds comments, details)
By Faith Hung
TAIPEI, Jan 29 China will allot investment
quotas of up to 100 billion yuan ($16 billion) for Taiwanese
seeking to put money into its financial markets under the
Renminbi Qualified Foreign Institutional Investor (RQFII)
programme, China's securities regulator said on Tuesday.
A China Securities Regulatory Commission (CSRC) official
also announced a series of measures to open its securities and
futures markets to Taiwan, following an unprecedented meeting
between the commission's chairman Guo Shuqing and Taiwan's top
financial regulator earlier in the day.
"This is a big breakthrough in cross-strait financial ties,"
Tong Daochi, director of the CSRC's international department,
told a briefing for reporters in Taipei. "Now that we are here,
we are sincere and determined."
The two sides have been moving to bolster their ties in the
financial sector, which have lagged the closer cooperation in
manufacturing and other areas due to Taiwanese concerns over
influence by China, its one-time political foe.
China's central bank and Bank of China's
Taipei branch signed a clearing agreement last week
for yuan transactions in Taiwan, completing the last step for
the launch of yuan-based transactions in Taiwan next month.
The Taiwanese will become the first offshore individual
investors granted access to China's mainland markets, under the
measures announced on Tuesday. The RQFII and QFII quotas,
established to allow foreigners to participate in China's
overseas markets, are now limited to institutions.
China will also allow Taiwanese brokerages to own as much as
51 percent of their joint ventures with Chinese counterparts in
Shanghai, Fujian and Shenzhen, Tong said.
In addition, Taiwan's financial firms will be allowed to own
a majority stake in mutual fund tie-ups with Chinese companies,
he said, adding that China welcomes Taiwanese pension funds to
invest in the mainland under the RQFII programme.
Tong did not give a timetable for putting the measures into
Taiwan, for its part, will double the limit for Chinese
citizens' total investment in Taiwan, under China's qualified
domestic institutional investor (QDII) programme, to $1 billion,
said Thomas Huang, the head of Taiwan's securities regulator.
Guo had told a forum in Hong Kong on Jan. 14 that he was in
talks with some investor groups about allowing offshore retail
investors into the mainland's A-share market. He also said China
could still increase its foreign investor quotas by up to 10
China introduced the RQFII scheme, which allows overseas
investors to deploy offshore yuan in mainland markets, at the
end of 2011 with an initial quota of 20 billion yuan and raised
that to 70 billion yuan last year.
It operates alongside the QFII programme, which gives
foreign institutional investors access to onshore yuan and the
Chinese capital markets through a quota.
($1 = 6.2226 Chinese yuan)
(Editing by Edmund Klamann)