While most analysts are not worried about the short-term impact of Taiwan's WTO entry on the financial sector, some worry that the increased international competition could threaten certain local financial groups if they don't change the way they do business.
"Generally speaking, there will be no immediate impact on the financial services sector -- including banking, insurance and the securities industry -- after Taiwan's entry into the WTO," said Lee Tong-how (李桐豪), a finance professor at National Chengchi University. "However, Taiwan's financial sectors will face strong competition in the next few years after the country becomes a member [of the WTO]."
Another analyst agreed with Lee.
"The major reason why entry won't immediately affect Taiwan's financial services sector is because Taiwan's government has been deregulating the limitations on foreign participation in the financial market long before Taiwan's entry into the WTO," said Liu Da-nien (劉大年), a trade policy research fellow at Chung-Hwa Institute for Economic Research.
"However, there will certainly be some sort of impact since China will still have five years to protect its financial services market from other countries after its entry into the WTO. This provides an opportunity for Taiwan's financial services industry to expand into the Chinese market during this period," Lee said.
"During this period, Taiwan's financial services industry will be able to court foreign counterparts and form strategic alliances aimed at the Chinese market. One good example is the recent alliance between Fubon Group (富邦集團) and Citicorp," Lee said.
Henry Cheng (鄭百亨), managing director of Manulife Funds Direct, spoke about the alliance between Fubon and Citicorp: "It's a smart move for the Fubon Group. Taiwan's financial services industry is going to face fierce competition from international financial groups, with or without the WTO membership.
"Fubon Group recently decided to sell 50 percent of its shareholding to Citicorp in exchange for foreign expertise. By doing so, Fubon Group minimizes its own operation risk and increases its future competitiveness."
"On the other hand, large life insurance groups like Cathay Life Insurance Co (國泰人壽) and Shin Kong Life Insurance Co (新光人壽) have not come up with measures to face the anticipated competitive challenges, which in my view could pose a threat to the future performance of these insurance groups," Cheng said.
More than a dozen large financial services groups recently chose to set up financial holding companies to reinforce their competitiveness. These include Cathay, Shin Kong and Fubon. However, forming a financial holding company is not a sure way to improve competitiveness, analysts said.
"Forming a financial holding company does not guarantee that competitiveness will improve overnight. That would still depend on how the company integrates financial products -- and on what decisions it makes to face head-on competition from large foreign competitors," Lee said.
Meanwhile, private banking services are expected to be affected significantly.
"Private banking and asset management is likely to be affected the most after the WTO entry," said Cha Chen-I (賈堅一), vice president of Bank Sinopac (華信銀行). "Foreign financial institutions are interested in so-called wealth management, which is aimed at providing one-to-one financial service to the rich."
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
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
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