Mainland authorities unveil financial support for cross-Straits integration

The People's Bank of China (PBC), the central bank, and the State Administration of Foreign Exchange (SAFE) on Thursday jointly released a policy package to enhance financial integration across the Taiwan Straits and support investment and financing for Taiwan island-founded enterprises operating in Fujian Province.

The measures aim to implement a guideline on building a cross-Straits integrated development demonstration zone, which focuses on optimizing the financial environment, improving trade and investment facilitation, and strengthening financial risk prevention and control.

The two departments emphasized that these measures are part of broader efforts to support cross-Straits exchanges and economic integration. They pledged to ensure thorough implementation and to continue expanding financial support for the demonstration zone in Fujian.

According to the policy package, banks in Fujian are now permitted to handle cross-boundary yuan transactions related to legal home purchases by Taiwan compatriots.

To promote high-standard trade liberalization, eligible banks may process current-account foreign exchange transactions for qualified enterprises under simplified review procedures. Services trade payments exceeding $50,000 may be verified after transactions, rather than requiring advance tax documentation. Banks are encouraged to support new forms of cross-boundary trade with innovative financial services and are allowed to settle trade imbalances on a net basis with certain overseas partners.

In the area of cross-boundary investment and financing, Taiwan-invested enterprises in Fujian can carry out domestic equity reinvestment without the need for additional registration. Companies meeting the criteria are allowed to establish integrated cash pools for the yuan and foreign currencies, enabling centralized fund management and settlement.

The measures also propose strengthening the financial markets that serve both sides of the Straits. Taiwan-invested firms are encouraged to list on the mainland equity markets, including via upgraded platforms such as the "Taiwan Board" of the Straits Equity Exchange Center.

Regulators will monitor the pilot programs closely, conduct risk assessments, and adjust operations based on real-time developments. Efforts will also be made to improve early warning systems and safeguard against cross-boundary financial risks, according to the agencies.