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
PLA MANEUVERS: Although Beijing has yet to formally announce military drills, its coast guard vessels have been spotted near and around Taiwan since Friday The Taiwanese military is on high alert and is closely monitoring the Chinese People’s Liberation Army’s (PLA) air and naval deployments after Beijing yesterday reserved seven airspace areas east of its Zhejiang and Fujian provinces through Wednesday. Beijing’s action was perceived as a precursor to a potential third “Joint Sword” military exercise, which national security experts said the PLA could launch following President William Lai’s (賴清德) state visits to the nation’s three Pacific allies and stopovers in Hawaii and Guam last week. Unlike the Joint Sword military exercises in May and October, when Beijing provided detailed information about the affected areas, it
CHINA: The activities come amid speculation that Beijing might launch military exercises in response to Lai’s recent visit to Pacific allies The Ministry of National Defense (MND) yesterday said China had nearly doubled the number of its warships operating around the nation in the previous 24 hours, ahead of what security sources expect would be a new round of war games. China’s military activities come amid speculation Beijing might organize military drills around the nation in response to President William Lai’s (賴清德) recent visit to Pacific allies, including stops in Hawaii and Guam, a US territory. Lai returned from the week-long trip on Friday night. Beijing has held two rounds of war games around Taiwan this year, and sends ships and military planes
Five flights have been arranged to help nearly 2,000 Taiwanese tourists return home from Okinawa after being stranded due to cruise ship maintenance issues, the Ministry of Transportation and Communications announced yesterday. China Airlines Ltd (中華航空), and EVA Airways Corp (長榮航空) have arranged five flights with a total of 748 additional seats to transport 1,857 passengers from the MSC Bellissima back to Taiwan, the ministry said. The flights have been scheduled for yesterday and today by the Civil Aviation Administration, with the cruise operator covering all associated costs. The MSC Bellissima, carrying 4,341 passengers, departed from Keelung on Wednesday last week for Okinawa,
US president-elect Donald Trump said he would “never say” if Washington is committed to defending Taiwan from China, but “I would prefer that they do not do it [ an attack],” adding that he has a “good relationship” with Chinese President Xi Jinping (習近平). “I never say because I have to negotiate things, right?” Trump said in an interview with NBC’s Meet the Press host Kristen Welker after saying he would not reveal his incoming administration’s stance on Taiwan’s defense in the event of an attack. Asked the question again, Trump, in a reference to China, said: “I would prefer that they