TAIPEI, TAIWAN - TAIWAN will allow its banks to invest in neighbouring Chinese lenders in a move that will help Taiwan banks better serve their client base in China.

The move was cheered by investors, who see the vast China market as one of the best opportunities for Taiwan banks which already face stiff competition in their mature home market.

The Taiwan government said on Wednesday that banks in Taiwan, Asia's fourth-largest banking market, can invest in Chinese lenders via their off-shore subsidiaries, said Premier Chang Chun-hsiung, while declining to give a timetable.