The Cabinet yesterday eased restrictions on investment in China's banking industry, with Fubon Financial Holding Co (富邦金控) widely expected to be the first to benefit.
Taiwanese banks' overseas banking subsidiaries will be allowed to acquire up to a 20 percent stake in their Chinese counterparts once regulators in Taiwan, China and the country in which the bank subsidiary is based have worked out a supervisory mechanism to oversee their operations, Premier Chang Chun-hsiung (張俊雄) said yesterday.
"It is not easy to establish a three-party supervisory mechanism and the government ministries have put in a lot of effort over a long period of time," Chang said during the Cabinet's weekly meeting.
Fubon Financial, the nation's second-largest financial services company by market value, welcomed the move. Local media had speculated that its subsidiary, Fubon Bank (Hong Kong) Ltd, had signed a letter of intent to buy a 20 percent stake in Xiamen City Commercial Bank (
Fubon Financial president Victor Kung (
However, local financial institutions are still restricted from setting up branches in China as Beijing is unwilling to negotiate with Taiwan on the establishment of a financial supervisory and management mechanism, Chang said.
"We wish China would talk to us about a supervisory mechanism. Until that happens, the new measure is a more efficient way for local banks to provide financial services to Taiwanese businesspeople in China," Chang said.
Banking Bureau Deputy Director-General Jong Huey-jen (鍾慧貞) told reporters at a press conference following the Cabinet meeting, that the measure "was not tailored for the Fubon Financial case."
"There are 12 local banks with overseas operations in Hong Kong, the US, Indonesia, Vietnam and Thailand, among others. As long as the regulator of the third country is willing to set up a three-party supervisory mechanism with the regulators of Taiwan and China, we welcome these local banks' investment in Chinese banks," Jong said.
Chinese media outlets recently reported that Fubon's acquisition of a stake in Xiamen Bank was approved after banking regulators in Taiwan and China signed an agreement that the Hong Kong Monetary Authority, the territory's financial watchdog, would act as the intermediary among the regulators of the three regions.
The implementation of the Closer Economic Partnership Arrangement (CEPA) between the Mainland and Hong Kong on Jan.1 last year was also seen as a move to facilitate cross-strait financial ties as it allowed Hong Kong banks with US$6 billion in assets to acquire a maximum 20 percent stake in Chinese banks.
Jong sidestepped a question about whether the Financial Supervisory Commission (FSC) had signed an agreement with the China Banking Regulatory Commission.
She also refused to elaborate in what form China had promised to work with the FSC to enable it to exercise the right of jurisdiction to ensure effective supervision of Taiwanese subsidiaries in China.
"The banking regulator of the third country is the `primary regulator' of the supervisory mechanism, under which banking regulators of both Taiwan and China can share information," Jong said.
The Cabinet also approved a proposal aimed at relaxing regulations on cross-strait financial services offered by local banks' offshore banking units.
The measure would remove the requirement that unsecured loans offered by local financial institutions to Taiwanese businesspeople operating in China should not exceed 10 percent of the company's net value; allow them to provide factoring services and grant credit to foreign businesses; and permit them to accept shares issued in Taiwan, real estate and NT dollar as collateral.
Both measures will be put into effect within a week after the FSC completes revisions of measures governing cross-strait financial businesses, Jong said.
Additional reporting by CNA
Also See: Fubon aims to be first to China
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College