Currently, there are around 14 Taiwanese companies listing in Hong Kong. But Hong Kong's capital market is over-saturated while, in Taiwan, we still have 1,200 companies [in the over-the-counter market] that are ready to get listed. In terms of competitiveness, I think we're ahead of China and Hong Kong in terms of our attractiveness to businesses as a listing destination.
TT: How stiff will the competition get among the stock markets in Taiwan, Hong Kong and China in the coming years? Is there any room for cooperation among the capital markets in greater China?
Chen: Frankly, it's all about competition. Talk about how these three markets should cooperate with one another remains just talk. However, technically, I think a greater China index, dual listing and cross-border linkage should be feasible to facilitate and to benefit both Taiwan's and Hong Kong's stock markets, which should be a good start for both markets to cooperate with each other.
TT: After coming to office, you've been regarded as reform-minded as far as improving corporate transparency on the TAIEX is concerned. Any reform plans in the pipeline?
Chen: We're lucky to have succeeded in improving the market's transparency while cutting back its negative impact on turnovers. Reforms take effort and time. I think we will work hard to upgrade and diversify the TAIEX's trading and order-placing system so as to keep up with international markets.
Also, to beef up the competitiveness of Taiwan's capital markets, I propose that the government should begin thinking about measures to integrate the stock market, the futures market and the over-the-counter market by merging the stock exchange with the Taiwan Futures exchange (期交所) and the Gretai Securities Market (櫃檯買賣中心), formerly known as TAISDAQ, into a unified body so as to sell an integrated investment portfolio.
Take options for example; it's the most popular investment destination traded on the futures markets in Taiwan, yet it is usually traded on the stock market in other foreign-country markets.
By doing so, I think we should be in line with international standards and be competitive with other Asian markets. But it's the government's job to hammer out a well-thought-out plan.
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