Exposure to China among Taiwanese financial institutions — including banks, insurance companies, securities and futures brokerages, and investment trusts — reached a record-low NT$876.95 billion (US$29.71 billion) at the end of April, Financial Supervisory Commission data showed on Sunday.
Their exposure was down NT$165.75 billion, or 15.89 percent, from a year earlier amid concerns over a slowing Chinese economy, rising local government debts and a multiyear real-estate crisis, as well as persisting geopolitical risks, the commission said.
In terms of declines in total exposure, the banking sector experienced the largest drop, as Taiwanese banks cut their combined exposure — including lending, investments, and interbank loans and deposits — by NT$145.27 billion, or 15.16 percent, to NT$813.2 billion from a year earlier, the data showed.
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Taiwanese banks scaled back lending to the Chinese market by a combined NT$99.87 billion from a year earlier and decreased investments by NT$20.83 billion and interbank loans by NT$24.57 billion over the same period, it showed.
The sector’s exposure to China has declined for seven consecutive years since the US-China trade dispute started in 2018.
As of the end of April, local banks’ exposure accounted for 17.2 percent of the sector’s net worth, the lowest level since the data became available in the third quarter of 2013, the commission said.
Taiwanese insurance companies’ investments in marketable securities in China fell NT$20.9 billion, or 29 percent, from a year earlier to NT$52.4 billion at the end of April, accounting for only 0.16 percent of the sector’s total disposable funds, it said.
The sector’s investments in Chinese securities were all made by life insurers, while property and casualty insurers have held no securities in China since January 2023, it said.
Meanwhile, the combined exposure to China of Taiwanese securities and futures brokerages, as well as securities investment trust and consulting firms rose NT$457 million, or 4.2 percent annually, to NT$11.35 billion at the end of April, accounting for 1.39 percent of the sector’s net worth, the data showed.
The sector’s expanded exposure to China reflected that securities firms’ proprietary finance units slightly increased investments in short-term debt holdings, the commission said.
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