The risks of Taiwanese financial firms’ NT$1.12 trillion (US$35.12 billion) exposure to China are controllable, despite growing debt woes in the world’s second-largest economy, the Financial Supervisory Commission (FSC) said on Tuesday.
Concerns about debt contagion in China have risen after Zhongzhi Enterprise Group Co (中植企業), which managed about 1 trillion yuan (US$138 billion) of assets, this week missed payments on multiple high-yield investment products.
In addition, property giant Country Garden Holdings Co (碧桂園), which had racked up about 1.4 trillion yuan in liabilities as of the end of last year, and faces 7.8 billion yuan in payments on notes and bonds next month, on Monday suspended 11 of its onshore bonds.
Photo: AFP
Taiwan’s banking, insurance, and securities and futures industries have no exposure to Zhongzhi Enterprise Group, the commission said.
As for Country Garden Holdings, there are only 22 professional investors who are clients of five Taiwanese banks that have bonds issued by the Chinese property developer, totaling NT$170 million, while one local bank reported US$9.02 million in loans to the firm, the commission said.
As of the end of June, the three major financial industries reported aggregate exposure of NT$1.12 trillion to China, with the banking industry having a combined exposure of NT$1.01 trillion, followed by NT$94.7 billion by the insurance industry and NT$15.73 billion by the securities and futures industry.
In the banking industry, lending to China was NT$697.4 billion at the end of June, with investments in the Chinese market totaling NT$237.4 billion and interbank loans totaling NT$75.4 billion, the commission said, adding that total exposure to China accounted for 23.91 percent of the industry’s net worth.
Exposure to China in the local banking industry and the ratio of exposure to net worth dipped to the lowest level since the commission started recording the data in the third quarter of 2013, it said.
The declines were evidence that the risks from exposure remained controllable, it said.
In the insurance industry, exposure to Chinese marketable securities totaled NT$94.7 billion at the end of June, down 5.02 percent from a year earlier, with the investments all by life insurance companies, it said.
No investments were reported by property insurers, it added.
In the securities and futures industry, exposure totaled NT$15.73 billion as of the end of June, with investments by Taiwanese securities firms totaling NT$12.79 billion, the largest contribution in the industry, it said.
The exposure among securities firms was NT$3.88 billion in business investments and NT$8.9 billion from proprietary securities firms, it said.
In addition, exposure from securities investment trust firms and futures merchants was NT$2.69 billion and NT$251 million respectively, it added.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
‘LASER-FOCUSED’: Trump pledged tariffs on specific sectors, including semiconductors, pharmaceuticals, steel, copper and aluminum, and perhaps even cars US President Donald Trump said he wants to enact across-the-board tariffs that are “much bigger” than 2.5 percent, the latest in a string of signals that he is preparing widespread levies to reshape US supply chains. “I have it in my mind what it’s going to be but I won’t be setting it yet, but it’ll be enough to protect our country,” Trump told reporters on Monday night. Asked about a report that incoming US Secretary of the Treasury Scott Bessent favored starting with a global rate of 2.5 percent, Trump said he did not think Bessent supported that and would not
RSS