By Shih Hsiu-chuan
Staff reporter
The government announced a further loosening of restrictions yesterday on overseas companies with Chinese capital to list on the local stock market, while allowing Chinese qualified domestic institutional investors (QDIIs) to invest in the stock and future markets on a case-by-case basis.
Praising the proposal drawn up by the Financial Supervisory Commission (FSC), Premier Liu Chao-shiuan (劉兆玄) told yesterday’s Cabinet meeting that the Cabinet’s approval was part of the government’s “opening up policy” that targeted “unnecessary restrictions” on cross-strait exchanges.
Commission Vice Chairman Wu Tang-chieh (吳當傑) told a press conference after the Cabinet meeting that the Cabinet agreed to scrap a rule that said China-invested companies could only list in Taiwan if their Chinese shareholders held a stake of 20 percent or less.
The regulations banned companies registered in China with stakes of 20 percent or more held by Chinese investors from listing on the nation’s stock exchange or issuing Taiwan Depository Receipts (TDR) and overseas companies with 40 percent of their net worth invested in China from listing in this country.
Wu said the first restriction would be lifted when Article 20 of the Statute Governing the Relations Between the Peoples of the Taiwan Area and the Mainland Area (兩岸人民關係條例) is amended in the legislature.
“We [the commission] and the Mainland Affairs Council reached a consensus on this. We both wish to see the article revised by October,” Wu said.
He said the other two rules were expected to be removed within one week because they did not require legislative approval.
The Cabinet also decided to allow China’s QDIIs to invest up to 3 percent of their approved funds in the local stock and futures market, even though Taiwan and China still do not have a memorandum of understanding (MOU) that would allow both governments to monitor capital flows.
With the cap, China QDIIs would be allowed to spend up to US$1.125 billion in Taiwan starting in October when the commission finalizes the details of the new regulations.
Wu said there was no need to worry that opening the capital market to China’s QDIIs would allow China to manipulate Taiwan’s stock market because “Chinese QDIIs would only be a trivial amount.”
“The amount of foreign direct investment currently approved by the government is about US$140 billion, or about 32 percent of the market value in the stock market. Even if China’s QDIIs were to pump all of their US$1.125 billion in the stock market, it would still be a very small portion,” he said.
Wu said the government raised the Chinese QDII equity investment ceiling again once it has signed an MOU with China, but he didn’t give a timetable for such negotiations.
The easing of restrictions would make cross-strait capital flow easier and would attract more listings to stimulate and internationalize the market, part of the government’s efforts to turn the country into a funding center in Asia, Wu said.
Also see: Overseas firms plan to cross-list
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique