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China to ‘review’ Taiwanese banks

China will “actively” review applications from Taiwanese banks to invest on the mainland through third-country subsidiaries, the China Banking Regulatory Commission said.

The banking regulator will review applications by Taiwanese banks’ subsidiaries incorporated outside the nation to “conduct business” in China, the commission said in a statement on its Web site yesterday. It didn’t specify the types of business activities that would be allowed.

The gesture comes after the Cabinet approved a plan last month allowing banks to buy stakes of as much as 20 percent in their Chinese peers through third-country subsidiaries to make them more competitive.

Taiwan restricts direct investment in China, which considers Taiwan part of Chinese territory and has threatened to invade if formal independence is declared.

The Chinese regulator will consider Taiwanese banks’ applications to acquire equity stakes in Chinese banks through legal units set up in Hong Kong or Macau, yesterday’s statement said.

Such bids would be reviewed under terms set out in the Chinese government’s Closer Economic Partnership Agreements with the two special administrative regions, the statement said.

Fubon Financial Holding Co (富邦金控) is the only Taiwanese bank currently qualified to buy into a Chinese rival through a third-country unit, Taiwan’s Financial Supervisory Commission said.
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