A regulation allowing Taiwanese banks to invest in China passed preliminary review in the legislature yesterday amid a chaotic session in which pan-green lawmakers refused to recognize the result.
The legislators said the committee convener had handled proceedings unfairly.
The regulatory relaxation appears to open a door for Taiwanese banks to make inroads into China's financial market through the establishment of subsidiaries, since opening branches is not possible under Taiwanese law because there is no bilateral supervisory agreement.
Eighty four lawmakers endorsed the proposed amendment to Article 36 of the Statute Governing Relations Between Peoples of the Taiwan Area and the Mainland Area (
After passage in yesterday's Home and Nations Committee, the amended article promoted by Chinese Nationalist Party (KMT) Legislator Lee Jih-chu (李紀珠) would be referred to cross-party negotiation before being introduced to the legislature for a second reading.
Lee expected the amendment to finish its third reading within the current legislative session ending in December. Yet the timetable could be delayed for four more months if the pan-green camp demands partisan negotiations before further review, she said.
The amended article allows local banks to set up branches and subsidiaries in China directly or indirectly via a third country and to invest in Chinese rivals.
In addition, the finance sector would be removed from the "prohibited items" for investment in China, and responsibility for the matter would be shifted from the Ministry of Finance to the Finance Supervisory Commission (FSC).
Banks would be required to apply for permission from the FSC before establishing a branch in China, but the FSC would have few discretionary powers. Applicants fulfilling all the relevant criteria would be automatically granted permission, Lee said.
Lee added that it was imperative to pass the amendment if the government really takes the goal of enhancing the competitiveness of Taiwan's banks seriously.
"According to China's WTO commitments, foreign banks can establish wholly foreign-owned branches in any Chinese city and provide local and foreign currency to Chinese individuals. It's time to lift [Taiwan's] restrictions," Lee said.
Taiwanese banks are only allowed to establish representative offices in China, with government officials saying that the ban on opening branches in China is due to a lack of a "memorandum of understanding" (MOU) concerning financial supervision.
Although some pan-green politicians including Democratic Progressive Party Legislator Tsai Chi-chang (
Taiwan Solidarity Union Legislator David Huang (
"Furthermore, it would be a great risk for financial businesses to invest in China without the protection of a MOU and the public would have to shoulder the consequences," Huang said.
Meanwhile, Mainland Affairs Council (MAC) Vice Chairman Johnnason Liu (
He said the amendment would not resolve the MOU problem, on the contrary, loosening restrictions would only cause greater disorder in bank management, Liu added.
The FSC said, according to current international practice, signing a formal bilateral MOU is not necessarily a matter of high politics and sovereignty.
"It can be done as long as there are communication conduits and cooperation mechanisms between the home and host countries," the commission's spokesperson Susan Chang (
Local financial institutions said they welcomed the plan.
"We do hope for opportunities to develop in China's financial market where Taiwanese banks enjoy advantages of language and culture [in competing with foreign rivals]," said Lee Chang-ken, chief strategy officer of Cathay Financial Holding Co (國泰金控), the nation's largest financial group by assets.
Additional reporting by Jewel Huang
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Artificial intelligence (AI) agents would supplant smartphones as the center of people’s digital lives, fundamentally reshaping personal devices and driving a major computing upgrade cycle, Qualcomm Inc CEO Cristiano Amon said yesterday. In his keynote speech for this year’s Computex trade show in Taipei, Amon said that the rise of "agentic AI" — AI systems capable of reasoning, planning and carrying out tasks autonomously — would transform how people interact with technology across phones, PCs, vehicles and wearable devices. Describing the technology as the next major evolution in computing, Amon said that "2026 is the year of agents.” For decades, smartphones have sat
RSS