The Cabinet yesterday eased restrictions on investment in China's banking industry, with Fubon Financial Holding Co (富邦金控) widely expected to be the first to benefit.
Taiwanese banks' overseas banking subsidiaries will be allowed to acquire up to a 20 percent stake in their Chinese counterparts once regulators in Taiwan, China and the country in which the bank subsidiary is based have worked out a supervisory mechanism to oversee their operations, Premier Chang Chun-hsiung (張俊雄) said yesterday.
"It is not easy to establish a three-party supervisory mechanism and the government ministries have put in a lot of effort over a long period of time," Chang said during the Cabinet's weekly meeting.
Fubon Financial, the nation's second-largest financial services company by market value, welcomed the move. Local media had speculated that its subsidiary, Fubon Bank (Hong Kong) Ltd, had signed a letter of intent to buy a 20 percent stake in Xiamen City Commercial Bank (
Fubon Financial president Victor Kung (
However, local financial institutions are still restricted from setting up branches in China as Beijing is unwilling to negotiate with Taiwan on the establishment of a financial supervisory and management mechanism, Chang said.
"We wish China would talk to us about a supervisory mechanism. Until that happens, the new measure is a more efficient way for local banks to provide financial services to Taiwanese businesspeople in China," Chang said.
Banking Bureau Deputy Director-General Jong Huey-jen (鍾慧貞) told reporters at a press conference following the Cabinet meeting, that the measure "was not tailored for the Fubon Financial case."
"There are 12 local banks with overseas operations in Hong Kong, the US, Indonesia, Vietnam and Thailand, among others. As long as the regulator of the third country is willing to set up a three-party supervisory mechanism with the regulators of Taiwan and China, we welcome these local banks' investment in Chinese banks," Jong said.
Chinese media outlets recently reported that Fubon's acquisition of a stake in Xiamen Bank was approved after banking regulators in Taiwan and China signed an agreement that the Hong Kong Monetary Authority, the territory's financial watchdog, would act as the intermediary among the regulators of the three regions.
The implementation of the Closer Economic Partnership Arrangement (CEPA) between the Mainland and Hong Kong on Jan.1 last year was also seen as a move to facilitate cross-strait financial ties as it allowed Hong Kong banks with US$6 billion in assets to acquire a maximum 20 percent stake in Chinese banks.
Jong sidestepped a question about whether the Financial Supervisory Commission (FSC) had signed an agreement with the China Banking Regulatory Commission.
She also refused to elaborate in what form China had promised to work with the FSC to enable it to exercise the right of jurisdiction to ensure effective supervision of Taiwanese subsidiaries in China.
"The banking regulator of the third country is the `primary regulator' of the supervisory mechanism, under which banking regulators of both Taiwan and China can share information," Jong said.
The Cabinet also approved a proposal aimed at relaxing regulations on cross-strait financial services offered by local banks' offshore banking units.
The measure would remove the requirement that unsecured loans offered by local financial institutions to Taiwanese businesspeople operating in China should not exceed 10 percent of the company's net value; allow them to provide factoring services and grant credit to foreign businesses; and permit them to accept shares issued in Taiwan, real estate and NT dollar as collateral.
Both measures will be put into effect within a week after the FSC completes revisions of measures governing cross-strait financial businesses, Jong said.
Additional reporting by CNA
Also See: Fubon aims to be first to China
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from