Taiwan, China to sign financial services pact

By Ralph Jennings

TAIPEI, April 18 (Reuters) - Taiwan and China will sign a deal on financial services and expand direct flights at talks next week, officials said on Saturday, but continue to avoid tough political issues.

The negotiations, to take place in Nanjing, China, from April 25-29, point to a further warming of ties as the old foes prepare to sign agreements that will facilitate business between the two sides, useful especially for recession-strapped Taiwan.

"There are no real big differences between the two sides," said Maa Shaw-chang, deputy secretary general with the body that negotiates for Taiwan after meeting his Chinese counterparts in Taipei to set up the third round of talks.

Since Taiwan President Ma Ying-jeou took office last May, the China-friendly leader has eased tension with Beijing through trade and transit deals signed during talks last year

Topping the agenda at the next round of talks is a broad agreement on financial services cooperation. It will cover a currency clearing system between the Taiwan dollar and Chinese yuan and mutual access to information about markets, including securities and futures, Taiwan's top China policymaker Lai Shin-yuan told reporters.

The two sides will also expand on direct daily flights that began in December, allowing charters to become regular scheduled flights while adding routes and destinations, Lai said.

For most of the past 60 years direct flights have been banned for security reasons. But about 750,000 Taiwan investors live in China, lured by a common language and lower labour costs.

China has claimed self-ruled Taiwan since 1949, when Mao Zedong's Communists won the Chinese civil war and Chiang Kai-shek's Nationalists (KMT) fled to Taiwan. Beijing has vowed to bring the island under its rule, by force if necessary.