Taiwan needs to further liberalize the financial service sector to improve its investment climate, foreign and local financial experts at the 2003 Taiwan Business Alliance Conference said yesterday.
Eric Chen (陳聖德), president of Chinatrust Commercial Bank (中信銀), praised the government's plans to allow China-based Taiwanese companies to list on the Taiwan Stock Exchange, but added that this should be implemented quickly.
"Time is slipping away," Chen told yesterday's CEO summit. "Thirteen Taiwanese companies have already listed on the Hong Kong exchange. We [Taiwan] have to catch up."
Panelists at yesterday's summit included Scot Barker, president and chief operating officer of GMAC Commercial Holding Corp, Morris Chang (
With 70,000, or 61 percent, of listed Taiwanese manufacturers having invested in China, Chen urged the government to make use of the opportunities across the Strait instead of ignoring them.
"Other than Hong Kong, [which is] arguably part of China, you can not find such a high degree of China connection anywhere else in the world," Chen said.
The key factor affecting Taiwan's long-term success is the development of its capital markets, he said.
The Taiwan stock market's total capitalization has reached US$360 billion, the third largest in Asia outside Japan, and turnover is the highest in the region, Chen said.
While praising completed moves to deregulate -- such as the lifting of restrictions on the qualified foreign institutional investor mechanism -- Morgan Stanley's Scott said that Taiwan still faces many challenges.
"The [local financial] sector is still the most fragmented in Asia, with the top five players accounting for just 38 percent market share," Scott said. Korea's top five financial institutions, by comparison, command 76 percent of the market, while the top five in Hong Kong and Singapore control 90 percent, he said.
Since Taiwanese financial institutions lack the size and scale to compete beyond their country's borders, Scott said he expected the sector's pace of consolidation to quicken through mergers and acquisitions, the nation's bad-loan ratio to drop drastically and strong branding strategies to help differentiate financial services.
As the summit's moderator, Vice Minister of Finance Susan Chang (
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