The government should lift restrictions on the local banks and securities firms wishing to expand in China, pundits said yesterday.
“Limitations will be of little use as businesses will go wherever opportunities exist,” Hsieh Ming-ruey (謝明瑞), dean of the department of business at National Open University, told a seminar organized by the Taiwan Chamber of Commerce yesterday.
The economy can only benefit from open-door economic policies and gain from an expansion in international trade, he said.
Shen Chung-hua (沈中華), a professor in the department of finance at National Taiwan University, also urged the government to allow domestic banks to branch out into the Chinese market as soon as feasible.
While foreign banks’ move into the Chinese market has increased competition, the nation’s banking sector could still forge partnership with second-tier commercial banks at the city level, he told reporters after the seminar yesterday.
Shen, however, expressed concern at the consequences of domestic banks seeing a drop in savings and deposits and leaving debts behind while expanding in China.
“Some mechanism should be established to prevent such an outcome,” he said, without elaborating.
Another question Taiwan may face is whether the local financial market should be equally open to Chinese banks wishing to enter the market and set up subsidiaries.
“We should have confidence in our own market, which should be open to Chinese interests if they request to establish branches here,” Shen said.
Citing IMF statistics, Shen said Taiwan had the upper hand in financial expertise and talent over China.
Taiwan ranked No. 20 in attracting financial talent while China ranked No. 37, IMF data from 2005 showed.
Taiwanese banks were No. 17 and No. 30 respectively in operational efficiency and financial expertise, while China ranked No. 53 and No. 37.
Huang Ching-tan (黃慶堂), former deputy director general of the Ministry of Economics’ department of commerce, said yesterday that now is a perfect time for the government to relax the 40 percent capital cap on China-bound investments.