Overexposure of Taiwanese banks to the Chinese financial sector by allowing Taiwanese financial services providers into China, as stipulated under the cross-strait service trade agreement, would expose Taiwan to potential Chinese financial market upheaval, according to a government national security assessment report.
The trade agreement was signed in Shanghai, China, in June last year.
Under the agreement, Chinese investors would be able to hold up to a 10 percent stake in Taiwanese banks, but of the 16 Taiwanese financial institutions, more than half are privately managed — including heavyweights such as CTBC Financial Holding Co — the report says.
This means that theoretically more than half of the financial sector could end up in China’s pocket, the report says.
Chinese-funded banks would be able to increase the Taiwanese banking sector’s reliance on Chinese funds by offering large loans at low interest rates, after which China could, through threats to deny loan extensions or pull their money out, force the banks to voice opinions on certain issues to try to influence national policy, the report says.
Personal information is also at risk as Chinese-funded banks could obtain such information through the joint credit information center, posing considerable risk to the security of people’s livelihoods and assets, the report says.
However, former national policy adviser Huang Tien-lin (黃天麟) said that the report focuses more on internal matters and downplays the potential negative consequences of allowing Taiwanese banks to establish themselves in China.
If enough funding from Taiwan has been “exposed,” China would have the ball in its court and have a complete say over Taiwan’s financial security, Huang said, adding that would be the greatest risk of liberalizing the financial system.
Huang said the report only states the risk of bankruptcy for Taiwanese banks with too much capital invested in China if they run into obstacles with their Chinese branches.
Huang said that as long as the boards of the financial institutions remain in Taiwanese hands — which should be the case unless the companies’ management has critically failed beyond even a government bailout — Chinese investors would have next to no chance to influence the boards.
As for the report’s claim that Taiwanese personal information would be available to China, Huang said that was the price you pay for liberalization and the same principle applies around the world.
Huang said Taiwan has already been hurt by its industry moving to China, directly causing lower economic growth and lower real wages, adding that if the banking sector were to move to China, all financial development and assets would also move to China.
The move would make it even more difficult for Taiwanese small and medium-sized enterprises to access funding, rubbing salt in Taiwan’s economic wounds, Huang said.
UPGRADE: The Kang Ding-class frigate is replacing its Chaparall missiles with Tien Chien II and Hua Yang VLS, which would provide it with long-range, 360° air defense Taiwan plans to produce 1,200 to 1,376 Hai Chien II missiles (海劍二, Sea Sword II) — also known as TC-2N — to serve as the standard air defense system of the navy’s surface combatant fleet, a source said yesterday. Last week, the Hai Chien II, the naval version of the Tien Kung II missile (天劍二, Sky Sword II), completed a live-fire test in waters off the National Chungshan Institute of Science and Technology’s Jiupeng facility (九鵬) in Pingtung County’s Manjhou Township (滿州). The MIM72 Chaparral and other dated air defense missiles that currently arm Taiwanese ships have inadequate range to combat Chinese
REASONS FOR TRAVEL: An assistant professor said that proposed amendments to penalize drivers if they used drugs overseas would not deter people from traveling People who operate a motor vehicle under the influence of marijuana would have their driver’s license revoked, even if they used the substance while overseas, the Ministry of Transportation and Communications said yesterday, citing proposed amendments to the Road Traffic Management and Penalty Act (道路交通管理處罰條例). The amendments would also authorize the government to revoke the licenses of people determined to have used Category 1 or Category 2 narcotics, even if they were not operating a vehicle while under the influence of drugs, as well as ban them from taking the license test for three years, the ministry said. People aged 18 or
Johanne Liou (劉喬安), a Taiwanese woman who shot to unwanted fame during the Sunflower movement protests in 2014, returned to Taiwan last night after being deported from the US. She is to stand trial in Taiwan for charges involving embezzlement, fraud and drug crimes. The Criminal Investigation Bureau (CIB) said it took her into custody at Taiwan Taoyuan International Airport and would first question her before transferring her to the New Taipei District Prosecutors’ Office. She was arrested upon disembarking a flight from San Francisco that landed shortly before 7pm. Liou absconded to the US in 2019 after jumping bail
Shih Hsin University President Chen Ching-he (陳清河) yesterday issued a public apology for comments made in his commencement speech last week, stating that he has asked the school to suspend his duties and halt his wages for two months as a show of contrition. At the commencement ceremony on May 30, Chen said, “If you don’t manage your time well, or your own emotions, or your health, then I am telling every one of you — put a quick end to ‘you,’ because the world has no need for ‘you.’” The comments have sparked significant controversy online, and Chen through an open
RSS