China Merchants Bank Co (招商銀行) is among at least five Chinese banks applying to open branches in Taiwan as relations between the two governments improve, said Ma Weihua (馬蔚華), chief executive officer of China’s fifth-biggest lender by market value.
“We’re not the only one applying,” Ma said in an interview in London last week before the opening ceremony for the lender’s first unit in the British capital. “There are five or six.”
China Merchants has “participated in the discussion” of a financial-services agreement between China and Taiwan, he said.
China and Taiwan are working on an agreement to allow cross-strait investment between financial firms, after five decades of restricted access. Bank of China Ltd (中國銀行), the nation’s largest foreign-exchange lender with over 800 outlets overseas, said on April 27 it wants to be the first Chinese bank to set up a branch in Taiwan.
A memorandum of understanding between China and Taiwan is “generally agreed,” with “only some divergence in details such as the entry requirement,” Bank of Taiwan (臺灣銀行) chairwoman Susan Chang (張秀蓮) said on July 9 after she returned from an official visit to Beijing with a delegation of Taiwanese bankers, Central News Agency reported.
Industrial & Commercial Bank of China Ltd (中國工商銀行), the world’s largest lender by market value, and Bank of Communications Ltd (交通銀行) have also said they plan to set up branches in Taiwan after an agreement is reached.
Beijing-based Bank of China is the only Chinese bank allowed to conduct foreign-currency exchange with Taiwan dollars.
Closer ties with China, Taiwan’s biggest trading partner, could help Taiwan speed up recovery from its first recession since the technology bubble burst in 2001. The economy shrank a record 10.2 percent in the first quarter from a year earlier.
China on April 29 said it would end a ban on investments in Taiwan from May 1 after accords signed on April 26 allowed cross-strait operations by financial-services companies, expanded direct flights and established cooperation in fighting crime.
Taiwan the same day said it would begin accepting applications from Chinese institutional investors to buy Taiwan’s securities.