Taiwan to Allow Chinese Investment in Bourse

Taiwan had for decades barred Chinese capital, fearing it could give Beijing control of the local economy, but opened selected industries to Chinese investment for the first time last year.

Starting Monday, Chinese institutional investors can buy shares in Taiwan's stock market, with purchases by any single investor limited to $80 million, the Financial Supervisory Commission said.

The current investment cap would amount to less than 5 percent of the total capitalization of the Chinese institutional investors approved by mainland authorities, short of the 10 percent analysts had expected.

In an effort to stabilize local financial markets, Taiwanese authorities have in recent weeks tried to halt an influx of foreign capital that has driven up local shares prices and currency.

The combined Chinese ownership will be limited to 10 percent in financial, natural gas and other government-controlled firms, and 8 percent in shipping firms, the commission said.