If the cross-strait service trade pact with China is not approved by the legislature, the financial sector could focus its outreach on Southeast Asia rather than China, an official of Fubon Financial Holding Co (富邦金控) said on Saturday.
Meanwhile, former minister without portfolio Schive Chi (薛琦) said on Saturday that the financial sector’s contribution to the nation’s GDP would return to its peak level if the service trade agreement can clear the legislature.
Fubon Financial president Vivien Hsu (許婉美) said the company, which has moved throughout Greater China, has so far operated without the benefit of the pact.
However, if the pact clears the legislature, restrictions would be eased on the stake ceilings in Chinese financial institutions allowed for Taiwan-funded financial institutions, Hsu said.
She cited Xiamen City Commercial Bank (廈門商銀) as an example, saying that Fubon Financial acquired a 19.9 percent stake through Fubon Bank (Hong Kong) Ltd (富邦香港) in 2008 because of a 20 percent ceiling.
She said that the domestic financial sector can wait, and if expansions into China do not speed up, businesses would not rule out shifting their focus to Southeast Asia.
However, she also said that the region poses limitations, saying the net value of share prices of banking institutions tends to be higher, in addition to language barriers.
Schive said the financial sector used to grow rapidly, with its output accounting for between 12 and 13 percent of GDP, but that this ratio began to slip due to changes in the economic situation, regulations and on cross-strait financial exchanges.
Today, the output of the financial sector accounts for a little more than 6 percent of GDP, he said.
According to Schive, if the service trade pact can clear the legislature, it will boost the nation’s financial sector and its output will return to the peak level of accounting for 12 percent of GDP or more.