Beijing welcomes Taiwanese companies to list on the mainland to fuel their further expansion, said Li Bingcai, executive deputy director of the Taiwan Affairs Office of the State Council.

Li made the remark Wednesday at a symposium about the listing of Taiwanese companies on the Chinese mainland.

Ranking officials from the China Securities Regulatory Commission (CSRC) and the Ministry of Commerce attended the symposium to explain the listing procedures to Taiwanese companies.

Li expects the symposium will offer substantial help to Taiwanese companies that wish to launch an IPO but don't know much about the procedures.

Wang Jianmin, a professor with the Chinese Academy of Social Sciences, believes the symposium will assist Taiwan companies in moving through the listing process.

He believes more of them will seek A-share listings, as this will help to raise their profile on the mainland. Moreover, yuan proceeds can be used to finance local expansion.

A handful of Taiwanese firms have filed applications for listing with the CSRC, including Giant Manufacturing, Tingyi Holdings, Uni-President and Want Want.

An analyst from GF Securities said the Fuzhou plant of Chunghwa Picture Tubes (CPT), Taiwan's third-largest flat panel maker, is expected to go public on the Shanghai A-share market this year.

Chunghwa's initial public offering, if approved, will make it the second Taiwan company listing on the local yuan-dominated bourse.

The first is Zhejiang King Refrigeration, which raised 280 million yuan (US$33.8 million) last December.

King Refrigeration is also the first overseas-funded company listing on the A-share market since the Chinese government issued new guidelines in November 2001. Those provide a legal basis for overseas-funded companies seeking to list on the domestic market, and underscore the government's wish to see more Taiwan companies do business with the mainland.

CSRC rationed listings last year so as not to flood the struggling market with too many new shares, Wang said.

However, the local A-share market is recovering and also recorded a large increase in turnover, which may encourage the CSRC to allow an increase in IPOs, he added.

Trade between the Chinese mainland and Taiwan is expected to continue growing this year, in part owing to the mainland's investment environment pursuant to its World Trade Organization commitments, said Wang Xiaochuan, vice-director of the Taiwan, Hong Kong and Macao Affairs Department of the Ministry of Commerce.

He also called on Taiwan authorities to lift import and investment restrictions to benefit industries on both sides.

"In 2003, cross-Straits trade was on a fast track, booking a record US$58.4 billion. This momentum is likely to continue," he said.

Machinery and electronic products are the mainstays of the two-way trade, which accounted for 61.4 percent of the overall trade volume last year.

However, the mainland had a trade deficit with Taiwan that hit US$40 billion in 2003, a jump of about 31 percent over the previous year.

"Huge exports from Taiwan to the mainland offset its deficit with other trade partners," Wang said.

Taiwan's reluctance to implement a "direct trade link" and its restrictions on mainland products and investment are the major reasons leading to the trade imbalance, Wang said.

Meanwhile, the mainland approved 4,495 projects funded by Taiwan investors last year. They involved US$8.6 billion of contractual capital, up 27 percent year-on-year.

Currently, most mainland-Taiwan trade goes through Hong Kong, Macao or other places.

(China Daily February 26, 2004)