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."
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
RSS