Monday, March 26, 2012

Cross-Strait financial exchange and cooperation

l  One area that Taiwan would like to accelerate cross-Strait is financial services. In fact, Taiwan plans to invite China's top banking official—Shang Fulin—to attend the first biannual meeting between the financial regulators from both sides in the first half of this year.

l  As the chairman of China’s Banking Regulatory Commission (BRC), Shang is expected to lead a delegation of Chinese financial regulators to share their experiences and “discuss issues of mutual concern.” In addition, the two sides will explore the possibility of holding cross-Strait seminars and allowing cooperation in areas such as personnel training.

l  Meetings between banking regulators of China and Taiwan first began last year after the cross-Strait financial memorandums of understanding (MOU) was signed in 2009.

l  Besides setting up liaison offices in Taiwan, Chinese financial regulators have not been encouraging their banks to invest in Taiwan. The reasons are simple: (1) the mutual investment protection agreement between China and Taipei has not yet been signed, and (2) the current limitation on equity stake that Chinese banks can hold—at 10% total, and 5% each—in Taiwan is simply too low.

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