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Jul 26, 1996 | 05:00 GMT

Taiwan Liberalizes Rules on Taiwanese Investment in China's Financial Sector

Taiwan has further liberalized rules on Taiwanese investment in China's financial sector, permitting investment in China's securities and insurance sector. For its part, China has offered to supply water to a Taiwanese controlled island, Quemoy, that has been a historical flashpoint between the two-governments. A short term thaw in relations is underway. But danger looms on the horizon. The U.S. plans to hand over the first group of F-16 fighters scheduled to be transferred to Taiwan in April, 1997. Coming shortly after Hong Kong day, this will be a major test of post-Hong Kong Chinese policy. Expect a cyclical low in relations by February, 1997.
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