Bank of China and Industrial and Commercial Bank of China are in race to be the first of the nation’s banks to launch operations in Taiwan, reported Bloomberg. Financial Supervisory Commission of Taiwan and China Banking Regulatory Commission are said to have inked three MoUs to ease restrictions on investment in banks, brokerages and insurers across the Taiwan and let banks set up branches in each other’s markets.
The move is expected to strengthen financial ties with an island that accounted approximately $200 billion of investment in mainland China and has 100,000 companies operating there. Bank of China said that it would apply for license to open a branch. Jiang Jianqing, chairman of ICBC, also expressed the bank’s intension of expanding its presence in Taiwan.
Closer financial ties with mainland China, Taiwan’s biggest trading partner, is expected to help the export-dependent economy, which contracted 7.5% in the second quarter of 2009. It is also expected to help Taiwan’s drive to consolidate its 37 local banks.
However, Li Qing, an analyst at CSC Securities HK Ltd, said: “This is a big step on the political side and Chinese banks are keen to show their support. The reality is the Taiwan market is too small and saturated for China players to care much about. It’s more meaningful for the Taiwan counterparts who can expand in a much bigger market,” reported the news agency.
