VZCZCXRO5735
RR RUEHGH
DE RUEHIN #1344 1072244
ZNR UUUUU ZZH
R 172244Z APR 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 9758
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHBK/AMEMBASSY BANGKOK 3234
RUEHBJ/AMEMBASSY BEIJING 5085
RUEHUL/AMEMBASSY SEOUL 7785
RUEHGP/AMEMBASSY SINGAPORE 6428
RUEHKO/AMEMBASSY TOKYO 7653
RUEHML/AMEMBASSY MANILA 9705
RUEHJA/AMEMBASSY JAKARTA 3842
RUEHKL/AMEMBASSY KUALA LUMPUR 3481
RUEHHI/AMEMBASSY HANOI 3058
RUEHBY/AMEMBASSY CANBERRA 4182
RUEHWL/AMEMBASSY WELLINGTON 1486
RUEHHK/AMCONSUL HONG KONG 6284
RUEHGH/AMCONSUL SHANGHAI 0060
RUEHGZ/AMCONSUL GUANGZHOU 9249

UNCLAS TAIPEI 001344 
 
SIPDIS 
 
SIPDIS 
 
STATE PLEASE PASS AIT/W AND USTR 
 
STATE FOR EAP/RSP/TC, EAP/EP 
 
USTR FOR ALTBACH 
 
USDOC FOR 4420/USFCS/OCEA/EAP/LDROKER 
USDOC FOR 3132/USFCS/OIO/EAP/ADAVENPORT 
TREASURY FOR OASIA/LMOGHTADER 
TREASURY PLEASE PASS TO OCC/AMCMAHON 
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF 
GOVERNORS, AND SAN FRANCISCO FRB/TERESA CURRAN 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ECON PINR TW
SUBJECT:  KMT-CCP Meeting Pushes Taiwan Markets Up 
 
 
¶1.  During the week of April 10 - 14, Taiwan's stock market rose in 
anticipation of favorable results from the April 14-15 KMT-CCP 
economic forum.  Taiwan portfolio investors started heavy trading in 
stocks before opening of the forum on April 15.  Taiwan's stock 
price index rose 2.5% from 6,782 points on April 10 to 6,952 points 
on April 14.  On April 17, Taiwan's stock price index further rose 
another 0.7% to a 64-month high of 7,000 points.  From April 10 to 
17, stock prices for tourism and construction issues shot up an 
average of 17% and 15%, respectively.  Transport issues also 
reported a rise of 8%. 
 
¶2.  Foreign portfolio investors responded positively to the forum. 
They bought NT$34 billion (US$1.05 billion at the exchange rate of 
NT$32.5 per USD) more in stocks than they sold in the week of April 
10-14, sending their cumulative net stock purchases to NT$106.9 
billion (US$3.3 billion) so far in April.  Local institutional 
investors made net stock purchases of NT$10 billion.  In an 
interview with local reporters, Kingpo (electronic) Group Chairman 
Hsu Sheng-hsiung said that the PRC's opening measures will help 
Taiwan farms and tourism industry and drive Taiwan's stock prices up 
throughout this year. 
 
Tourism Industry 
---------------- 
 
¶3.  A liberalized policy to allow PRC nationals to tour Taiwan will 
directly benefit Taiwan's tourism industry, despite the many 
remaining restrictions on such tourist trips.  Taiwan's Tourism 
Bureau (TB) estimates that annual spending by PRC tourists in Taiwan 
may reach NT$19.5 billion (or US$600 million) based on the 1,000 
arrivals per day limit set by the PRC, and an average stay of seven 
days.  The Taiwan Tourism Association (TTA) is more optimistic than 
the official estimate, predicting increased revenue of NT$30 
billion.  PRC tourism would boost spending at hotels, department 
stores, recreational resorts & facilities, and transport companies. 
 
Complaints 
---------- 
 
¶4.  The stock market rise indicates that a number of people are 
willing to place a bet on increased tourism across the Strait. 
However, Taiwan tourist agents have complained that the PRC may 
reject Taiwan tourist agents that have not been "cooperative" with 
the PRC in the past. 
YOUNG