Taiwan banking authorities have given their approval for two Chinese banks to set up representatives offices on the island.

Bank of China and Bank of Communications have been allowed to establish themselves in Taiwan in a move that is expected to foster cooperation among the two countries. The decision by the Financial Supervisory Commission follows on the Chinese government's approval granted to four Taiwan banks to open offices in the Mainland early this month.

"They will be able to establish contacts with local banks and clients, as well as collect informaion regarding Taiwan's financial market," the Taiwan regulator said in a statement.

China and Taiwan have experienced tension in the past years, especially after the island decided to govern itself in 1949. The relationship between them improved after 2008, when the newly-installed Taiwanese government pledged to strengthen trade links and open up to the Chinese.