Taiwanese financial holding firms’ exposure to China in the second quarter accounted for 7.92 percent of total overseas exposure, the lowest percentage in the 37 quarters since the Financial Supervisory Commission (FSC) began keeping records on overseas exposure.
The FSC has been compiling data on the overseas exposure of local financial holding firms since the second quarter of 2015.
Financial holding companies’ overall overseas exposure in the second quarter hit a record high of NT$28.02 trillion (US$853.83 billion), a 2.3 percent increase from NT$27.38 trillion in the first quarter, FSC data showed.
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Overall overseas exposure included NT$21.76 trillion in net investment, NT$4.43 trillion in net lending, and NT$1.83 trillion in deposits and interbank loans, with investments still constituting the largest portion of the local financial sector’s overseas exposure at 77.7 percent, the data showed.
Meanwhile, the top eight countries that domestic financial holding firms’ were most exposed to in the second quarter were the same as in the first quarter, with the US topping the list, followed by China, the UK, France, Australia, South Korea, Hong Kong and Japan.
Exposure to the US hit a record high in the second quarter, rising to NT$9.8 trillion, or 35 percent of total overseas exposure.
Substantial exposure to the US is not unique for Taiwan, as the US is a primary investment market for almost all countries, an FSC official said yesterday.
Meanwhile, financial holding firms’ exposure to China in the second quarter was NT$2.22 trillion, FSC data showed.
Although the figure increased slightly from the first quarter, overall overseas exposure increased, resulting in exposure to China making up 7.92 percent of total exposure.
The record low percentage indicated the local financial sector’s significant loss of interest in China, compared with the second quarter of 2015, when their exposure to China was 24.63 percent of the total, the official said.
Local financial holding firms’ exposure to China has been decreasing due to China’s economic slump, real-estate problems and debt crisis, and the Taiwanese government has been guiding them to spread their risk exposure, the official said.
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