A New China-Taiwan Agreement Protects Investors
August 09, 2012
Chen Yunlin, left, shakes hands with Chiang Pin-kung, after signing investment protection pact, Taipei, Taiwan, August 9, 2012.
This is the VOA Special English Economics Report.
China and Taiwan may disagree on political issues. But on Thursday they reached an agreement to protect investors. The agreement is important because China and Taiwan do not have diplomatic relations. China claims Taiwan as its territory. But Taiwan has been self-governing since nineteen forty-nine.
The sides agreed to open new industries to investment and to inform the other within twenty-four hours if an investor is arrested. Talks on the deal have lasted two years. But they have been slowed because of the different legal systems in the two areas.
Chinese negotiator Chen Yunlin and Chiang Pin-kung of Taiwan signed the agreements in Taipei. They set up a way to negotiate, or an arbitration mechanism. The deal also will open new areas of business and industry to investment.
Chinese interests had held back investment because of fears of a change in Taiwan’s government.
Market experts expect Chinese investors to buy shares of Taiwanese companies listed on Taiwan’s stock exchange. Experts think high-technology and travel industries will receive a lot of investment over the short term.
Taiwanese share prices are considered undervalued although companies are doing well. Jack Huang is a lawyer in Taipei. He says China will buy stocks and seek partnerships with Taiwanese companies, especially in technology.
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