Wed, Nov 09, 2005 - Page 11 News List

PRC financial delegates cagey on currency deal

CLEARANCE A delegation of 23 led by an assistant to the governor of the People's Bank of China is here to discuss the deal, though they're not saying much

By Jackie Lin  /  STAFF REPORTER

Representatives of China's financial sector were tight-lipped yesterday about their attitude toward the establishment of a bilateral currency clearance mechanism between Taiwan and China, despite the Taiwanese government's willingness to push for a nationwide exchange for the yuan.

Asked for his view on the matter by the Taipei Times at a financial forum held in Taipei, Jiao Jinpu (焦瑾璞), deputy director-general of the research bureau at the People's Bank of China (中國人民銀行), was low-key, merely saying, "It can be discussed."

Premier Frank Hsieh (謝長廷) last month said Cabinet was mulling the idea of setting up a "currency clearance mechanism" instead of inking a "currency clearance agreement" with Beijing to facilitate the exchange of the NT dollar and the yuan in Taiwan proper.

A yuan exchange was launched in Kinmen and Matsu on Oct. 3 between the range of NT$4.039 and NT$4.199 to the yuan.

The 23-member delegation led by Ma Delun (馬德倫), an assistant to the governor of the People's Bank of China, is composed of representatives from China's banking, securities and insurance sectors.

They arrived in Taiwan on Monday for a two-day forum starting yesterday at the invitation of the Chung-hua Institution for Economic Research (中華經濟研究院) and the Taipei Foundation of Finance (台北金融研究發展基金會).

The 11th annual forum aims at providing a platform for the two sides to exchange opinions on financial reforms, exchange rates, foreign bank market entry into Taiwan and China and financial cooperation opportunities across the Taiwan Strait.

Speaking to participants at the forum earlier yesterday, Ma said financial industries across the Strait should cooperate more closely.

Hsieh Chin-ho (謝金河), chief executive officer of the business monthly Wealth Magazine, stressed that Taiwanese banks should be allowed to move across the Taiwan Strait just as foreign banks have swarmed into China to claim a share in Chinese lenders.

China has promised to open up its financial service industry in December next year in accordance with WTO regulations. However, Taiwanese lenders are currently only allowed to set up representative offices and are banned from approving loans in China.

Eyeing potential business opportunities lying ahead, foreign investors have vied to purchase initial public offerings (IPO) at China's state-owned banks, with the Bank of America investing US$3 billion to buy shares and an IPO of the China Construction Bank (中國建設銀行), Hsieh said.

HSBC Holdings PLC has been the most active foreign lender by spending US$5 billion to buy holdings in four Chinese banks, including the Bank of Communications (交通銀行).

In stark contrast, foreign investors seem to lack interest in Taiwan's market, with the number of foreign banks entering the country dwindling from 46 in 1998 to 35 last year, Chinese Nationalist Party (KMT) Legislator Lee Chi-chu (李紀珠) said.

Last year alone, foreign banks accounted for 5.65 percent of the nation's banking market in terms of assets, but their pre-tax profits reached 10.99 percent, displaying strong profitability compared with local competitors.

This story has been viewed 3257 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top