Taiwan authority opened up the island to Chinese mainland investment Tuesday with 100 categories of manufacturing, service and infrastructure sectors in the initial opening-up list.

The move marks a historic breakthrough of decades-long hopes for two-way investments across the Taiwan Straits.

Under two new regulations in effect Tuesday, mainland individuals, companies and institutions can set up branch offices, wholly-owned or joint-venture companies on the island.

They have to get approval from Taiwan economic affairs authority in advance, according to the regulations.

Investment from firms based outside the Chinese mainland, in which mainland ownership is more than 30 percent, will also be regarded as mainland investment in Taiwan, the regulations said.

In the initial phase, the Taiwan authority allows mainland investment in 64 categories in manufacturing sector, 25 categories in service sector, and 11 categories in infrastructure sector on the island.

Mainland investment would "help Taiwan's economy prosper" and make international investors more confident in Taiwan market, said John Chen-Chung Deng, deputy head of Taiwan's economic affairs authority, at Tuesday's press conference.

The investment would help increase industry capital in Taiwan and make its financial market more vigorous, he said.

Through two-way cross-Straits investments, the two sides could jointly explore mainland and international markets, he told the press conference.

The formalization of cross-Straits investment is a long-term objective, he said. The opening-up will advance in a "gradual" way and "will be expanded as long as the initial investment bears fruits."

The Taiwan authority planned to send a team to the mainland to attract investment in the second half of this year, he said. Taiwan welcomes mainland companies to conduct investigations for investment on the island.

For the convenience of mainland investors in Taiwan, the relevant authority in Taiwan has also set down regulations on issues including medical service, education, financial need and house purchasing for both the investors and their family, according to the official.

BREAKTHROUGH IN TWO-WAY INVESTMENT

Experts said the move marks the end of the one-way flow of capital from Taiwan to the mainland, and is a basic indicator of the normalization of economic and trade ties between the two sides.

Zhang Yansheng, director of the Institute of Foreign Trade under the National Development and Reform Commission (NDRC), said the influx of mainland capital would greatly boost Taiwan's gross production value, tax income and employment.

The investment would not only benefit Taiwan companies harshly hit by the international financial turmoil, but also enhance competitiveness of mainland companies, he said.

Liu Xiaohong, deputy general manager of Quanjude (Group) Co. Ltd., a Beijing-based company that specializes in the famous Peking roast duck, said the newly announced regulations have cleared major obstacles and will accelerate the company's pace to open outlets in Taiwan.

Direct transport, postal service and trade was totally cut off between the two sides since the Chinese civil war ended in 1949.

On Jan. 1, 1979, the Standing Committee of the National People's Congress, or the top legislature, called for an early realization of the three direct cross-Straits links on transport, mail and trade in its "Message to Compatriots in Taiwan". After 1979, the mainland allowed Taiwan products to enter at lower tax rates or tax-exemption.

In July 1988, the State Council, or the Cabinet, issued regulations encouraging Taiwan compatriots to invest on the mainland.

The mainland has been the largest trade partner of Taiwan since 2003, with annual trading volume surpassing 100 billion U.S. dollars.

Tuesday's announcement came about two months after the mainland and Taiwan reached a historic consensus on allowing mainland companies to invest in Taiwan during talks between the two sides top negotiators on cross-Straits relations.

Source: Xinhua