The first restaurant wholly owned by a China-based business group is scheduled to open in Taipei early next month, while Taiwan's government-run New Labor Pension Fund has decided to invest in the Chinese stock market soon for the first time. These moves signal that investment activities and capital flow across the Taiwan Strait will enter a new stage amid growing cross-strait reconciliation, particularly in the wake of the signing of a landmark economic cooperation framework agreement in June. The following are excerpts from local media coverage of the new developments: United Daily News: The Yechun Teahouse, a famous 'century-old-brand' restaurant in the eastern Chinese city of Yangzhou, will open its first overseas branch at Core Pacific City Living Mall in Taipei Sept. 3. It will be the first Chinese fully owned restaurant in Taiwan and its owner, the Yangzijiang Group, attaches great importance to the venture. It has spent NT$40 million (US$1.25 million) to decorate its 500-ping (1,650-square meter) property into a classic Yangzhou-style setting. Not only have wood craftsmen been hired from Yangzhou to carry out the interior decoration but the parent restaurant's head chef will stay in Taiwan for the first year of operation to ensure that the restaurant's dishes exactly match those sold at the Yangzhou outlet. 'The decorations, tableware and utensils used in the Taiwan branch all come from the original Yechun Teahouse. We want to present authentic Yangzhou-style gourmet offerings to win the hearts and minds of Taiwanese customers, ' said Yangzijiang Group Chairman Zhu Yuanhao in a recent interview. The restaurant will offer Yechun's signature dishes, including steamed buns, meat dumplings, green shao-mai, steamed thousand layer cakes and other quintessential Yangzhou delicacies. All the ingredients will be Taiwan-grown farm produce. Because of legal restrictions, Chinese catering service providers previously had to collaborate with Taiwanese joint-venture partners when operating in Taiwan. Divergences in marketing, packaging and management concepts led to the failure of those pioneering Chinese investors in the highly competitive Taiwanese catering industry and market analysts in Taiwan and China are now watching closely to see whether Yechun's new business venture will succeed. (Aug. 27, 2010). China Times: Taiwan's Labor Pension Fund Supervisory Committee decided recently that it will earmark NT$24 billion from the New Labor Pension Fund for investment in emerging stock markets, including those in China, as well as Russia, Brazil, India, South Africa, Malaysia, Thailand and Latin American countries. It marks the first time that the New Labor Pension Fund will be used to invest in emerging stock markets and also the first time that the government-run pension fund will invest in the Chinese stock market. China's B-shares and H-shares (shares of companies incorporated in China that are listed on the Hong Kong Stock Exchange or other foreign exchanges) will all be targets of the labor pension fund's investment, according to Lee Jui-chu, vice chairwoman of the Labor Pension Fund Supervisory Committee. Basically, she said, B-shares -- which refer to those traded in foreign currencies on the Shanghai and Shenzhen stock exchanges -- will account for no more than 10 percent of the fund's total investment in these emerging stock markets. As of the end of July, the earnings rate or return on investment of the old Retirement Fund was minus 1.17 percent, which translates into a loss of NT$5.9 billion, while the earnings rate of the New Pension Fund was negative 1.49 percent, representing a loss of NT$7.5 billion, Lee said. In comparison, she said, the two pension funds rank among the world's best in terms of management efficiency and profitability. 'The losses of both funds are narrowing steadily, ' she added. (Aug. 27, 2010). 