Visiting chairman of the Straits Exchange Foundation (SEF) and Chief Executive Donald Tsang agreed that Hong Kong and Taiwan should increase economic co-operation in a meeting Friday afternoon.

Tsang told SEF chairman Chiang Pin-kung that the Trade Development Council (TDC) is planning to set up a branch office in Taiwan, and suggested the setting up of an economic co-operation committee of Hong Kong and Taiwan businessmen.

Chiang was in Hong Kong on a three-day visit to promote bilateral exchanges.

It was his first time to visit Hong Kong since he became chairman of the foundation.

Speaking after the meeting with Tsang at Government House, Chiang said both he and Tsang agreed that economic co-operation between Hong Kong and Taiwan should be strengthened.

Responding to Tsang's remark that Taiwan is Hong Kong's fourth biggest trading partner, Chiang noted that Hong Kong is an important market for Taiwan as bilateral trading between the two sides surpassed US$33 billion in 2007.

To increase economic co-operation, Tsang indicated that the TDC has decided to set up a branch office in Taiwan and he expressed his hope for Taiwan's assistance in the establishment, Chiang said.

According to Chiang, Tsang has proposed to set up an economic co-operation committee of Hong Kong's top entrepreneurs and Taiwan businessmen who invest in Hong Kong.

Meanwhile, Chiang indicated that he did not see the recently strengthened ties between the mainland and Taiwan as a threat to Hong Kong's businesses.

In June, Beijing and Taipei agreed to launch direct weekend charter flights and allow more mainland tourists into Taiwan.

"Cross-Straits stability will be beneficial to the mainland, Taiwan and Hong Kong," he said.

A spokesman for the TDC said a branch office in Taiwan will enhance economic exchanges between Hong Kong and Taiwan.

The council also aims to assist Hong Kong's companies in looking for business opportunities in Taiwan, she said.

To achieve the purpose, the council would organize activities like business meetings and visits to Taiwan.

An application to set up the branch office has been lodged earlier this year and has yet to be approved by Taiwan, she revealed.

(HK Edition 07/19/2008 page1)