Bank of China, the state-owned Chinese bank, has expanded its network with a new branch in Taipei.

The new office, which was inaugurated in 27 June, is expected to strengthen financial ties between China and Taiwan, particularly for businesses operating on both territories. Taiwanese clients can now obtain RMB-based financial services through BOC's Taipei branch instead of heading over to Hong Kong or China, as practised previously. 

The deal remains incomplete, however, as Taiwan has yet to sign an agreement with China to allow the Taipei branch to offer RMB-based financial services through remittance, bank transfer and deposit absorption. For now, the new branch can only accommodate currency exchanges between the New Taiwan dollar and the RMB and other basic services.

Chinese banks in Taiwan cannot offer comprehensive financial services until the currency settlement agreement is finalised. The Financial Supervisory Commission of Taiwan in June gave approval for the Bank of China and Bank of Communications, another Chinese bank, to set up a local branch, to improve cross-strait banking ties. The FSC is also considering allowing asset management companies to invest as much as 100 per cent in China, from the current 30 per cent allowed.