TT: China is slated to open its financial markets after 2006 in accordance with commitments made when it joined the WTO. Do you foresee a window of opportunity for local financial-service providers or a negative impact on the local financial market?
Kong: China's open-door policies mean both challenges and opportunities to me. That's why I hope to help Taiwan get ready within the next two years. We can't ignore Chinese markets if our goal is to become a regional financial hub in the Asia-Pacific region.
Taiwan missed two chances to further upgrade its financial sector in the past 10 years -- one was in 1995-1996, when the government talked about the idea of developing the nation into a regional financial hub, and another opportunity was in 1998 when Asia encountered a regional financial crisis. But we missed these two opportunities and I feel sorry about that. If we could have made Taiwan a regional financial hub at that time, we wouldn't have seen Shanghai develop so fast in the past few years.
Success in the nation's financial sector hinges on three conditions -- government commitment and support, quality manpower and system development. China may see a fast catch-up in talent nurturing but it remains a long way for that country to develop a modern system, as its financial system remains backward.
Anyway, Taiwan can't afford to be marginalized and to lose market share to China, but many bankers may have unrealistic fantasies about Chinese markets. Historically speaking, China faces a small economic setback every five years and a big setback every 10 years. The reason for this is because of its economic system, which is not as sophisticated as ours. So put it this way: China is not as good as we often think, while Taiwan is not as bad as we expect.
Some foreign banks have said that they want to use Taiwan as a springboard before entering the Chinese market. To me, that concept is more viable for commercial banks, asset management companies and investment trust firms, but it may not apply to banking underwriters, because underwriting involves personal networks. Nonetheless, if we can move to develop Taiwan into a regional financial service center with our efforts winning recognition from international players, there's no reason for us to belittle ourselves.
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