Mon, Sep 09, 2013 - Page 14 News List

Taiwan has edge in free-trade zone, regulator says

Staff writer, with CNA

Taiwan’s offshore banking units (OBUs) will have an advantage in the soon-to-be launched Shanghai free-trade zone (FTZ), Financial Supervisory Commission Chairman William Tseng (曾銘宗) said on Friday, dismissing concerns that the OBUs would lose business to the Shanghai FTZ.

Tseng said Taiwan’s OBUs have been developed for a long time and the Taiwanese laws governing them are strict and comprehensive.

The Shanghai FTZ has also invited Taiwan’s banks to set up branches there, Tseng said, and with their experience, they will have considerable advantages there.

According to drafts of the plan for the new Shanghai FTZ shown to foreign media on Thursday, the zone will allow wider convertibility of China’s currency.

The zone, expected to be launched on Sept. 27, will allow convertibility of the yuan on the capital account for the first time, “under the pre-condition that risk can be controlled,” Agence France-Presse reported.

The draft plan would also allow interest rates to be set by the market.

Some Taiwanese bankers worry that the new zone could marginalize their OBUs, which currently offer a full range of yuan-denominated services, including loans and trade settlements.

One banker told the Chinese-language United Daily News that the main advantage of the new trade zone was that it is “free,” and he worried that the zone’s financial sector would be liberalized to a greater extent than for OBUs, which could make it harder for them to compete.

The FTZ could also challenge Hong Kong’s status as China’s financial hub.

However, Heng Seng Bank (恒生銀行) executive director Andrew Fung Hau-chung (馮孝忠) said the free-trade zone would need to achieve a certain scale and develop a settlement system before it could thrive, and will not challenge Hong Kong in the short term.

This story has been viewed 1829 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top