China, Taiwan sign agreements to boost cooperation

BEIJING — China and Taiwan signed three agreements Sunday that will enhance economic ties between the rivals and increase the frequency of flights, amid efforts by Taiwan’s president to improve relations with Beijing.

One agreement, signed at a meeting in the eastern Chinese city of Nanjing, sets the stage for financial services firms to open branches in each other’s territory, according to China’s official Xinhua News Agency.

A separate agreement will increase the number of direct flights between the two and open new routes to the Chinese mainland.

Taiwan and the mainland split in 1949 and have no formal ties, but investment and indirect trade have flourished since Taiwan eased its ban on contacts with China in the 1990s. The Taiwanese have long feared that China could gain control of its economy, but the current economic slowdown has forced the island to take bold market-opening measures.

Chen Yunlin, head of Beijing’s semiofficial Association for Relations Across the Taiwan Strait, said Sunday that the strengthening cooperation will help the two sides cope with the global economic downturn, which has severely hit both economies.

“The mainland will buy more products from Taiwan and send more tourists to the island, while encouraging more Taiwan enterprises to set up on the mainland to maintain stable development,” Chen said.

Sunday’s pact will enable financial services firms to establish branches in each other’s territory and allows for the creation of a currency-clearing mechanism, Xinhua said.

The two sides also agreed to increase the frequency of direct flights from 108 to 270 flights a week and open new routes to Taiwan from six mainland cities. A third agreement was signed to permit cooperation in criminal investigations.

Taiwan limits direct travel and shipping links for fear of domination by its giant neighbor. Beijing claims the democratic island as part of its territory and has threatened repeatedly to invade if it tries to make its de facto independence permanent or delays talks on uniting the two sides.

Negotiators also started to pave the way for investment by mainland companies to be allowed in the island, with Taiwan saying it would announce related guidelines and measures. Taiwanese officials say any investment agreement is likely to bar Chinese access to sectors deemed critical to the island’s security.

The talks were the third round of high-level negotiations between China and Taiwan since Taiwanese President Ma Ying-jeou took office last May. In the earlier rounds, they agreed to begin daily charter flights and direct sea and postal service and to increase the number of Chinese tourists visiting Taiwan. The next round of meetings is scheduled to be held in Taipei in the latter half of the year.

Ma is pushing for an agreement to ease trade barriers, which he says is needed to keep Taiwan competitive.

Taiwanese companies have invested more than $100 billion in the mainland and business leaders complain they are hurt by restrictions on finance and trade.

Associated Press writer Annie Huang in Taipei contributed to this report.