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Wed, Jan 17, 2001 - Page 18 News List

Rules for banks' China liaisons to be introduced

AGENCIES , TAIPEI

The Ministry of Finance will soon unveil a package of regulations governing the opening of liaison offices by local banks in China, a senior mainland affairs official said yesterday.

Chen Ming-tung (陳明通), vice chairman of the Cabinet-level Mainland Affairs Council (MAC, 陸委會), which charts Taiwan's policy toward China, made the remarks at a public hearing on financial integration between the two sides of the Taiwan Strait, organized by opposition Legislator Chou Hsi-wei (周錫瑋).

Chen said that although the time is not yet ripe for the Republic of China government to allow its banks to open branches in China, the government is ready to permit local banks to set up liaison offices there for market information-gathering purposes.

According to Chen, the government already formed a special inter-ministerial task force last August to evaluate the feasibility of allowing local banks to open liaison offices in China.

Chen pointed out that local banks' China liaison offices will be barred from operating any financial or banking services.

As for the proposal to allow local banks to branch out to China, Chen said it's still premature to discuss the issue.

Noting that bank branch operations involve the supervisory rights issue, Chen said the two sides of the Taiwan Strait must negotiate before the ROC government can consider the feasibility of lifting the ban on banks branching out to China.

Speaking at the same occasion, Wang Yao-shing (王耀興), director-general of the Bureau of Monetary Affairs (金融局), said China's recognition of Taiwan's rights to inspect and supervise operations of Taiwan banks' China operations is a prerequisite for the MOF to mull whether to allow local banks to branch out across the Taiwan Strait.

Meanwhile, Central Bank of China (中央銀行) Governor Perng Fai-nan (彭淮南) expressed concern over the flow of money to China yesterday. "The central bank has started asking banks to submit quarterly reports on Taiwan investments in China and Taiwan fund flows into China."

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