Sat, Sep 08, 2012 - Page 13 News List

Domestic banks’ exposure to China to increase further, central bank says

By Amy Su  /  Staff reporter

The central bank expects domestic banks’ exposure to China to rise further, amid increased financial exchanges between the two sides, an official said yesterday.

Figures released by the central bank yesterday showed that total international claims held by domestic banks stood at US$204.98 billion as of the end of June, up US$2.06 billion, or 1.02 percent, from the end of March.

International claims refer to claims on non-residents in all currency units and foreign currency claims on residents.

Claims on China totaled US$21.64 billion at the end of June, from US$19.88 billion at the end of March. It was the first time claims on China passed the US$20 billion level and was sharply up from US$3.33 billion at the end of March in 2009, central bank data showed.

“The amount rose mainly because of the rising investment in China by the nation’s banks,” Su Dao-min (蘇導民), deputy head of the central bank’s banking examination department, told a press conference.

Domestic banks’ exposure to China has grown significantly in the past four years, as more banks set up branches in China after President Ma Ying-jeou’s (馬英九) administration eased restrictions. Closer cross-trade also contributed to the rising claims on China, which Su said should keep on increasing in the near term.

As of the end of the second quarter, the nation’s claims on China had risen to the third-largest amount among all countries, behind claims on Luxembourg and the US, the bank said in its quarterly report.

However, the nation’s banks continued to have low-risk exposure to the PIIGS countries — Portugal, Ireland, Italy, Greece and Spain — with claims on these countries accounting for about 2 percent of total international claims as of June 30, and flat compared with the end of the first quarter, central bank data showed.

DEBT PER CAPITA

In related news, Taiwan’s national debt stood at NT$216,000 (US$7,240) per person as of the end of last month, unchanged for the third consecutive month, the Ministry of Finance said yesterday.

With income tax revenues gradually flowing into the nation’s coffers since May, the government was able to repay part of its debt and keep per capita debt at the lowest level this year, the ministry’s National Treasury Agency said.

National debt, which includes long-term and short-term central government debt, amounted to NT$5.02 trillion as of the end of last month, ministry data showed.

Government bonds — central government debt with a maturity of more than a year — totaled NT$4.875 trillion, while treasury bills — central government debt with a maturity of less than a year — stood at NT$145 billion, statistics showed.

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