Straits flights ready, island ups fund ratio

By Jin Jing (China Daily)
Updated: 2008-07-04 06:45

Airlines on either side of the Taiwan Straits were busy preparing for the historic flights on Thursday, when the island authorities raised their fund investment ratio in mainland stocks from 0.4 percent to 10 percent.

Tourists board the first direct chartered flight from Xiamen to Taiwan July 4, 2008. The flight took off at 7:25 am on Friday. A total of 353 people will fly from Beijing, while four other groups, each comprising 100 travelers, will leave from Shanghai, Nanjing, Xiamen and Guangzhou. [Xinhua]

Experts, however, said the impact of the policy change would be mild on the liquidity of the mainland stock market.

Today, the first day of the weekend flight service, will see six mainland and five Taiwan airlines operating 18 return flights.

Under an agreement signed last month, 36 return flights, divided evenly between mainland and Taiwan airlines, will operate between Friday and Monday.

China Southern will operate the first flight from the mainland to Taiwan, which will leave Guangzhou for Taipei at 6:30 am. The first flight from Taiwan to the mainland, operated by Taiwan-based Mandarin Airlines, will take off from Taoyuan, near Taipei, for Nanjing at 3:30 am.

The first group of 760 mainland tourists will start a historic journey to Taiwan, where they will spend 10 days.

Passengers prepare to board the first cross-strait flight of the day from Taiwan to Shanghai, at the Taoyuan International Airport July 4, 2008. Historic flights between Taiwan and the Chinese mainland began taking off on Friday. [Agencies]

China Southern has prepared special programs to educate passengers about Taiwan and it will be shown on close-circuit TV on the plane. Taiwan passengers will watch programs on mainland tourist sites, delicacies and customs.

The in-flight entertainment service will add songs in Minnan and Hakka dialects, commonly spoken in Taiwan, as well as Taiwan movies, a China Southern official said.

Air China will have its experienced crew on the cross-Straits flights, all of who have flown to and from the island before.

Taiwan investment

Investment from Taiwan will not shoot up sharply because it usually enters the mainland stock market via qualified foreign institutional investors (QFII), and they are subjected to restrictive rules, Wang Tao, an economist with UBS, said.

"The amount of QFII funds invested in the mainland stock market is relatively small," he said.

Taiwan will also allow funds from the island to put 100 percent, against the existing 10 percent, of their assets in HK-listed H and red-chip shares.