Beijing has denied it would let Taiwanese banks bypass rules governing foreign banks' expansion in China, after a Taipei-based newspaper said China was prepared to offer concessions to lenders based in Taiwan.
China may let Taiwanese banks with at least US$10 billion of assets bypass the initial step of running a representative office before applying to open a branch, the newspaper said, citing People's Bank of China (PBOC) Governor Dai Xianglong (
"The report is untrue -- no overseas banks, including those from Taiwan, could override the rule that foreign banks can only set up branches after operating a representative office on the mainland for three years," PBOC spokesman Wei Gejun said.
China doesn't have formal diplomatic links with Taiwan, which it claims sovereignty over, though the two economies are building links.
Several Taiwanese banks have asked to open offices in China to serve Taiwanese clients with investments in China, though Taiwanese officials have yet to give clearance to such a move.
"Letting Taiwanese banks open branches [in China] must be accompanied with giving [Taiwan] the right to regulate and examine the branches," Minister of Finance Lee Yung-san (
China has indicated that it would treat banks from Taiwan as foreign lenders -- just as lenders from Hong Kong, now part of China, are treated as foreign banks. That means Taiwanese banks wanting into China must have at least US$20 billion of assets to open in China, PBOC spokesman Wei said.
The PBOC, which is considering several applications from Taiwanese lenders, already cooperates with the home supervisor of foreign banks operating in China, and would do the same with Taiwan, Wei said.
China had 214 foreign banks' representative offices and 190 branches operating on the mainland, with a combined US$45.2 billion in assets and US$39 billion of loans at the end of last year.
Foreign banks accounted for 2 percent of assets in China's banking industry.