Cathay Financial Holding Co. will seek to upgrade its representative office in Shanghai to a branch and is hoping the new branch will undertake businesses in renminbi, China's currency, company president Chen Tsu-pei said Thursday. After the monetary supervisory agencies on both sides of the Taiwan Strait signed a cooperation memorandum of understanding (MOU), several Taiwanese financial institutions have expressed interest in setting up branches in China. Chen said that upgrading its liaison office in Shanghai will be the Cathay group's priority and that it will involve an investment of 200 million Chinese yuan or renminbi (US$29.2 million). The company expects to begin earning profits when the business turnover of the new branch reaches US$160 million, according to Chen. He added that in the initial stage, Taiwanese businessmen will be the major clients, although services will be extended to Chinese companies and foreign investors in the future. Under Chinese regulations, foreign banks that have operated in China for three years with two years of earning profits can apply to conduct business in renminbi. The Cathay group, with its life insurance and property insurance businesses prospering in 32 locations in eight provinces, is expected to have certain advantages in this regard, according to Chen. 