Taiwan is close to allowing Chinese financial institutions to set up representative offices here for the first time in 55 years, as economic relations improve.
"We have already reached a consensus to allow those companies from China to come here," said Financial Supervisory Commission Chairman Kong Jaw-sheng (
"So it's just a matter of time. It may happen any day now," he said.
Beijing so far has allowed seven Taiwanese banks to set up representative offices in China, and three other applications have been approved.
Executives from Cathay Financial Holding Co, the country's biggest financial group, were in China yesterday for the official opening of an insurance venture with China Eastern Air Holding Co, China's third-largest airline. An estimated 1 million Taiwanese live and work in China, where US$100 billion has been invested by Taiwanese businesses.
"The move shows Taiwan's strong determination to develop into a regional financial center," said Andrew Chen, who oversees the equivalent of US$2.7 billion as president of HSBC Asset Management Taiwan.
"This also sends goodwill to China, signaling the government's willingness to facilitate regional economic integration that will also help Taiwan," he said.
China Merchants Bank, Industrial Bank Co, Industrial & Commercial Bank of China (Asia) Ltd and Pudong Development Bank in November 2003 received approval from Chinese regulators to set up representative offices in Taiwan. They are still awaiting approval from the government here. China's big four banks -- Industrial & Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China -- are reorganizing to meet competition from overseas lenders that will enter the market of 1.3 billion people freely at the end of next year.
Expanding overseas benefits the banks as they diversify income and raise their profile ahead of international share sales.
Taiwan's GDP is forecast to grow 4.6 percent this year, compared with a projected 5.9 percent last year. China's economy expanded 9.5 percent in the fourth quarter from the year earlier period.
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