Taiwan plans to use its ban on Chinese investment in local banks as a bargaining chip when negotiating a planned major trade pact with China, a report said yesterday.
Taipei will also bar Chinese banks from setting up subsidiaries in Taiwan while only allowing those counted among the world’s top 200 to open representative offices in Taiwan, the Chinese-language Economic Daily News said.
Only five Chinese banks qualify according to these criteria, the newspaper said.
Meanwhile, the government will allow local banks to invest in their Chinese counterparts and establish subsidiaries or branches in China, it said.
Taipei plans to use the ban as a bargaining chip in negotiating a major trade pact with China, the report quoted unnamed officials as saying.
Officials at Taiwan’s top financial regulator the Financial Supervisory Commission were not available for comment.
Taiwanese law bans Chinese firms from direct investment in local banks.
The decision came after speculation that the Industrial and Commercial Bank of China (中國工商銀行), China’s largest lender, planned to acquire 20 percent in Taiwan’s leading Cathay Financial Holding Co (國泰金控) for up to US$3 billion.
Analysts have said deals such as this may be possible under an economic cooperation framework agreement (ECFA).
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