The Executive Yuan approved a set of revised banking laws that will allow Taiwan banks to conduct businesses with their counterparts in China, a finance ministry statement said yesterday.
After discussions with the Mainland Affairs Council (
In other words, Taiwanese banks can do business through their overseas branches directly with the overseas branches of mainland Chinese banks in the future. The purpose of the revision is to help OBUs develop a capital management center for overseas Taiwanese businesses, the statement said.
The revision may also encourage Taiwanese businesses to remit proceeds from their China investments back to Taiwan, said central bank Governor Perng Fai-nan (彭淮南) while talking to lawmakers at the legislature in mid-April.
In addition, under the revised banking laws, domestic banks will also be allowed to set up representative offices in China, the statement said.
The finance ministry said in the statement that it is not appropriate for domestic banks to open branch offices in China at the present time and there's no time frame as to when that opening will be.
As hundreds of Taiwanese companies have relocated to China to take advantage of cheaper labor and land costs there, the finance ministry expects Taiwanese banks' representative offices in China to offer Taiwanese firms financial counseling services where available.
The revised banking law still wait to be reviewed by the Legislature.
In related news, Taiwan will continue imposing some restrictions on China-bound investments and business exchanges after its accession to the WTO.
The opening of full direct links with China and relaxing mainland imports would also have to be discussed between the two sides rather than being adopted automatically under the mechanism of the world trade body, the Commercial Times quoted an official as saying yesterday.
"The Taiwan government will reserve its control over China-bound investments to a certain extent after joining the WTO," said vice chairman of the cabinet-level Mainland Affairs Council (陸委會) John Deng (鄧振中), which charts the country's China policy.
He said Taiwan's policy would be tolerated by the WTO because the restrictions only applied to Taiwanese businesses without affecting other WTO member countries.
The current policy bars local businessmen from investing over US$50 million for a single project in China, and investments in high-tech industries and infrastructure are also banned. However, many businesses have circumvented the rules, often by operating through overseas subsidiaries.
Taiwan had planned to relax the policy early this year amid mounting calls for liberalization by local industries eager to penetrate the vast China market. But the economic downturn and high unemployment has put the brakes on plans to quickly liberalize trade and investments with China.
RSS