Beijing's announcement Monday about expanded Chinese yuan services may represent a blessing for foreign banks in China, but not for many Taiwanese banks as the liberalization may weaken their competitiveness there.
"The liberalization measures have nothing to do with us," Hsieh Chao-nan (
"For the time being, we are not even allowed to start a business there. Therefore we may lose out to our foreign competitors over the policy," Hsieh said.
To serve Taiwanese companies in China, Chang Hwa became the first Taiwan-based lender to open a representative office in China in May of last year.
The representative office will allow the bank to monitor client's businesses in China, making it easier to assess loan requests. Chang Hwa could apply for an upgrade to full branch status next year, making it one of the first Taiwanese banks operating there.
The Chinese Banking Regulatory Commission in Beijing announced on Monday that foreign banks in China that are qualified to provide local currency services to foreign customers would be allowed to further expand their services to Chinese enterprises in four more cities -- Jinan, Fuzhou, Chengdu and Chongqing -- on top of the original nine, including Shanghai, Shenzhen and Tianjin.
The commission also raised the maximum stake that overseas investors can hold in Chinese banks from 15 percent to 20 percent as part of measures to help banks boost capital and sell shares to the public, in a move to fulfill the commitments China made when entering the WTO in late 2001.
Foreign banks -- such as France-based BNP Paribas SA -- started offering currency services in China in 1997, but Taiwanese banks, however, are still marking time and certainly are not going to benefit from the proposed liberalization, Hsieh said.
"Although we can apply to set up a branch in China in March next year as the Chinese authorities allow, whether the banking supervision issue can be resolved by that time is another problem," Hsieh said.
Both the Taiwanese and Chinese governments have not yet reached a consensus on cross-strait banking supervision, which is a major obstacle for local banks to tap the Chinese market now, Hsieh said.
Taiwanese banks with representative offices in China also include Cathay United Bank (國泰世華銀行), Hua Nan Commercial Bank (華南銀行), Taiwan Cooperative Bank (合作金庫), First Commercial Bank (第一銀行), Chinatrust Commercial Bank (中國信託銀行) and Land Bank of Taiwan (土地銀行).
The government bars banks from offering yuan-denominated loans. But Fubon Financial Holding Co (
China is expected to completely open its currency services to all foreign banks in accordance with its WTO obligations in 2006. But that advantage may not apply to Taiwanese financial groups, an economist said.
"By that time, Taiwanese banks will be competing with much larger foreign banking conglomerates in China. It will not help local banks as well," said Lee Jih-chu (
Although being in an inferior position, Joseph Jao (
"We still have more advantages in language and cultural similarities than other foreign rivals," Jao said. "Besides, the huge number of Taiwanese businesspeople there will be a good customer base for us."
EXPANSION: The investment came as ASE in July told investors it would accelerate capacity growth to mitigate supply issues, and would boost spending by 16 percent ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it is investing NT$17.6 billion (US$578.6 million) to build a new advanced chip packaging facility in Kaohsiung to cope with fast-growing demand from artificial intelligence (AI), high-performance-computing (HPC) and automotive applications. The new fab, called K18B, is to commence operation in the first quarter of 2028, offering chip-on-wafer-on-substrate (CoWoS) chip packaging and final testing services, ASE said in a statement. The fab is to create 2,000 new jobs upon its completion, ASE said. A wide spectrum of system-level chip packaging technologies would be available at
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
HEAVYWEIGHT: The TAIEX ended up 382.67 points, with about 280 of those points contributed by TSMC shares alone, which rose 2.56 percent to close at NT$1,400 Shares in Taiwan broke records at the end of yesterday’s session after contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a fresh closing-high amid enthusiasm toward artificial intelligence (AI) development, dealers said. The TAIEX ended up 382.67 points, or 1.45 percent, at the day’s high of 26,761.06. Turnover totaled NT$463.09 billion (US$15.22 billion). “The local main board has repeatedly hit new closing highs in the past few sessions as investors continued to embrace high hopes about AI applications, taking cues from a strong showing in shares of US-based AI chip designer Nvidia Corp,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su
Nvidia Corp’s major server production partner Hon Hai Precision Industry Co (鴻海精密) reported 10.99 percent year-on-year growth in quarterly sales, signaling healthy demand for artificial intelligence (AI) infrastructure. Revenue totaled NT$2.06 trillion (US$67.72 billion) in the last quarter, in line with analysts’ projections, a company statement said. On a quarterly basis, revenue was up 14.47 percent. Hon Hai’s businesses cover four primary product segments: cloud and networking, smart consumer electronics, computing, and components and other products. Last quarter, “cloud and networking products delivered strong growth, components and other products demonstrated significant growth, while smart consumer electronics and computing products slightly declined,” compared with the
RSS