Negotiators from the Chinese mainland and Taiwan signed a service trade agreement on Friday that is expected to further strengthen cross-Strait economic ties.
The agreement was inked by the Association for Relations Across the Taiwan Straits (ARATS) and the Straits Exchange Foundation (SEF).
The ARATS and SEF are authorized by the mainland and Taiwan, respectively, to handle cross-Strait affairs.
According to the service trade agreement, the Chinese mainland will open 80 service sectors to Taiwan, while Taiwan will open 64 sectors to the mainland.
Under the agreement, the threshold for market access will be lowered for service providers from both sides and more favorable policies will be formulated to boost cross-Strait cooperation in the service industry.
ARATS President Chen Deming said the agreement "marks a new level for cross-Strait economic and trade cooperation and complies with the trend of the world's economic development."
The sectors to be opened include those related to commerce, telecommunications, construction, distribution, environment, health, tourism, entertainment, culture, sports, transportation and finance.
Highlights of the agreement include the mainland relaxing its restrictions on Taiwan investors in setting up financial companies, nursing homes, health institutions and construction enterprises.
Taiwanese businesses are allowed to invest in call centers, online data processing and transaction, while Taiwanese banks will be able to set up branches in coastal Fujian Province and establish village and county-level banks.
On the Taiwan side, it will allow qualified mainland banks to set up more branches in the island and raise the ceilings for mainland companies' investment in its financial institutions.
The agreement will further normalize and liberalize the service trade between the Chinese mainland and Taiwan, as well as promote the opening-up of mutual markets in the service sector, the ARATS and SEF said in a joint press release.
The agreement is one of several follow-up agreements to the Economic Cooperation Framework Agreement (ECFA), a comprehensive cross-Strait economic pact signed in 2010. The pact is intended to reduce tariffs and commercial barriers between the Chinese mainland and Taiwan.
GOODWILL & SINCERITY Regarding market opening, the mainland's offer is bigger than its WTO commitments, ARATS Executive Vice President Zheng Lizhong said at a press conference after the signing ceremony.
Chen Deming said the pact has demonstrated the mainland's "good will and sincerity" towards Taiwanese compatriots.
Zheng, who believed the coverage and scale of the market opening under the agreement is "unprecedented" for the mainland, said the pact will raise both sides' capacity to engage in global competition in the service sector.
He forecasts that strengthened cross-Strait cooperation in the service sector will create more businesses and jobs.
SEF Chairman Lin Join-sane said earlier in the day the agreement will optimize the investment and trade environment on both sides, and facilitate their economic integration with other economies, both individually and jointly.
Sheng Jiuyuan, executive director of the Shanghai-based Pudong Research Center on Taiwan Economics, believed the agreement is also a boon to the mainland, which has been devoted to nurturing a favorable environment for the growth of its service industry in its 12th Five-year Plan for 2011-2015.
Chang Chun-fu, an official with the island's economic authorities, said the service sector accounted for nearly 70 percent of total economic output.
The expansion of cross-Strait service trade is expected to increase its total economic output by 0.57 percent, or 220 billion new Taiwan dollars (about 7,297.84 million U.S. dollars), based on the figure of 2012.
Official statistics showed that the added value of the tertiary sector accounted for about 44 percent of the mainland's GDP, lagging behind that of Taiwan whose service sector output accounted for about 68 percent of its GDP.
The agreement stipulates basic service trade principles, rights and obligations, the orientation of development and relevant working mechanisms for both sides.
According to Zheng Lizhong, the service trade pact will allow the two sides to negotiate on further expansion and opening of their market to each other.
MORE NEGOTIATIONS TO FOLLOW Friday marked the first time for Chen Deming and Lin Join-sane to sit down at a negotiating table since taking office as chief negotiators on cross-Strait affairs. Chen became president of ARATS in April 2013, and Lin was elected SEF chairman in September 2012.
During their talks, Chen said he hoped ARATS and SEF could "make new contributions" in promoting the peaceful development of cross-Strait relations, on the basis of mutual political trust and good cooperation.
Both the ARATS and SEF have vowed to proceed with other follow-up agreements to the ECFA.
Negotiations on a commodity trade agreement and a dispute settlement agreement under the ECFA are expected to be completed before the end of 2013, and a pact to avoid double taxation is expected to be signed in the later half of this year.
The ARATS and SEF have also agreed to address shortages of fresh water in Kinmen and move ahead with talks on the establishment of offices on each other's side.
The two sides will hold talks on agreements regarding cross-Strait cooperation on earthquake monitoring and matters of meteorology.
During their talks, the two sides reviewed the implementation of the pacts that have been signed and finalized the topics for their next round of talks.
The two sides also pledged to further exchange views on Chen's proposal to launch negotiations on agreements that would facilitate cross-Strait exchanges in culture, education and science.
Mainland Taiwan affairs chief Zhang Zhijun said while meeting with Lin Join-sane on Friday that "the service trade agreement has increased and enriched cross-Strait economic cooperation."
As an active response to aspirations from both sides, the new deal will bring greater welfare to people across the Strait, said Zhang, director of the Taiwan Work Office of the Communist Party of China Central Committee.