Taipei- Taiwan's cabinet Thursday decided to raise the ceiling on corporate investments in China to 60 per cent of their net worth from 40 per cent in a bid to further increase its economic exchanges with the mainland and bolster the island's economy.

"Relevant departments will revise regulations to facilitate the implementation of the new measure effective from August 1," the government said in a statement.

The measure, part of a policy of China-friendly President Ma Ying-jeou to engage the mainland and improve cross-strait ties, is expected to benefit at least 163 companies in Taiwan, whose investments on the mainland have either reached or are close to the 40 per cent ceiling.

Local firms have repeatedly asked that the government ease restrictions on China-bound investment. Taiwan has banned direct link with China since the two sides split at the end of a civil war in 1949. The Ma government has largely eased restrictions on direct contact with the mainland since it took office on May 20.

The new measure will also remove any restrictions on China-bound investments by Taiwanese companies headquartered on the island. That would benefit at least 577 such companies, which would be allowed to freely invest on the mainland, the statement said. (dpa)