The lingering China-US trade tensions have caused some China-bound Taiwanese businesses to bring home their production and prompted some foreign companies to reconsider increasing their investments in China. When determining who benefits from the ongoing trade disputes, even if Taiwan does not rank first, it is often considered to be near the top of the list.
However, even though the prolonged civil protests in Hong Kong have increased political uncertainties and dampened investors’ confidence in the world-class financial center, few people would consider Taiwan a priority when evaluating where the trillions of dollars parked in Hong Kong should go.
The civil protests in Hong Kong are causing investors to rethink the allocation of funds in their portfolios. To them, in spite of the fund flight concern, Taipei does not have a sound enough financial environment to replace Hong Kong as a regional or global financial center, which requires world-class standards in the market scale of foreign exchanges, stocks, bonds and asset management, along with first-rate financial supervision.
For investors, a regional or global financial center must also have the capability to meet their needs ranging from a high degree of freedom of capital movement to large-scale financial markets, and a variety of financial products.
However, Taiwan’s financial market is under strict regulation, and the market is relatively small. Some in Taiwan have begun to discuss the possibility of making the country a regional financial hub, given the ongoing political crisis in Hong Kong, but Taiwan still lags behind Hong Kong and even Singapore in the region in terms of diversity and openness in the financial market. These are all related to deregulation, and most importantly, the results would not emerge overnight, and it would take time to gain trust from international investors.
Given Hong Kong’s political situation, it is naive to think that Taiwan can replace it as the financial hub in the region or globally, but the government’s focus should not be solely on Taiwanese financial firms’ exposure to Hong Kong and how to lower the financial risk. Instead, the government should take this opportunity to consider how to attract funds from the territory.
The Taiwan Institute of Economic Research recently suggested that Taiwan could become a regional fundraising hub if the government has the ambition to attract the global funds spilling out of Hong Kong.
The government has continued to encourage Taiwanese businesses to move back home, and rules allowing capital repatriation from abroad took effect in August. Earlier this month, Financial Supervisory Commission Chairman Wellington Koo (顧立雄) said that the commission would ease regulations and approve new wealth management programs by the end of this year. Apparently, the commission is seeing the business opportunity derived from the repatriated capital and aims to help banks and stock brokerages develop their wealth management businesses here.
That is not enough if Taiwan plans to compete with Hong Kong and Singapore in the long-term financial landscape. It is true that compared with other Asian markets, Taiwan’s financial products are not sufficiently innovative and diversified, and the country lags behind in terms of taxation, laws, financial systems and international financial professionals.
However, Taiwan does have its advantages. Its yuan pool has increased rapidly to become the second-largest offshore yuan pool in the world. The country has ample liquidity given the steady increase in excess savings in recent years, which would rely on good government policies to not just improve the competitiveness of Taiwan’s financial industry, but also to bring funds to the manufacturing and technology industries.
Chinese Nationalist Party (KMT) caucus whip Fu Kun-chi (傅?萁) has caused havoc with his attempts to overturn the democratic and constitutional order in the legislature. If we look at this devolution from the context of a transition to democracy from authoritarianism in a culturally Chinese sense — that of zhonghua (中華) — then we are playing witness to a servile spirit from a millennia-old form of totalitarianism that is intent on damaging the nation’s hard-won democracy. This servile spirit is ingrained in Chinese culture. About a century ago, Chinese satirist and author Lu Xun (魯迅) saw through the servile nature of
Monday was the 37th anniversary of former president Chiang Ching-kuo’s (蔣經國) death. Chiang — a son of former president Chiang Kai-shek (蔣介石), who had implemented party-state rule and martial law in Taiwan — has a complicated legacy. Whether one looks at his time in power in a positive or negative light depends very much on who they are, and what their relationship with the Chinese Nationalist Party (KMT) is. Although toward the end of his life Chiang Ching-kuo lifted martial law and steered Taiwan onto the path of democratization, these changes were forced upon him by internal and external pressures,
In their New York Times bestseller How Democracies Die, Harvard political scientists Steven Levitsky and Daniel Ziblatt said that democracies today “may die at the hands not of generals but of elected leaders. Many government efforts to subvert democracy are ‘legal,’ in the sense that they are approved by the legislature or accepted by the courts. They may even be portrayed as efforts to improve democracy — making the judiciary more efficient, combating corruption, or cleaning up the electoral process.” Moreover, the two authors observe that those who denounce such legal threats to democracy are often “dismissed as exaggerating or
The Chinese Nationalist Party (KMT) caucus in the Legislative Yuan has made an internal decision to freeze NT$1.8 billion (US$54.7 million) of the indigenous submarine project’s NT$2 billion budget. This means that up to 90 percent of the budget cannot be utilized. It would only be accessible if the legislature agrees to lift the freeze sometime in the future. However, for Taiwan to construct its own submarines, it must rely on foreign support for several key pieces of equipment and technology. These foreign supporters would also be forced to endure significant pressure, infiltration and influence from Beijing. In other words,
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