Taiwan won’t let China acquire local financial firms
Bloomberg | 8 December 2009
Taiwan Won’t Let China Acquire Local Financial Firms
By Tim Culpan and Janet Ong
Dec. 8 (Bloomberg) — Taiwan won’t allow Chinese banks to acquire local financial institutions when it signs an economic cooperation agreement with the mainland, Premier Wu Den-yih said.
“We will discuss about allowing branches of Chinese banks to be set up in Taiwan, but it doesn’t include the possibility of Chinese lenders acquiring Taiwan financial companies,” Wu told the Taiwan Foreign Correspondents’ Club in Taipei today during his first meeting with overseas media since taking office in September.
Taiwan in June eased restrictions on Chinese investments in its textiles, automobiles and plastics industries while maintaining curbs on mainland companies’ access to banks and phone operators. The government will begin a study this month on whether to ease a ban on Taiwanese companies making liquid- crystal display panels on the mainland, Wu said.
“If Taiwan doesn’t invest in China, we may lag behind and lose our competitive advantage,” Wu said. “An evaluation will assess which are the key technologies and should remain in Taiwan.”
The two sides will this month hold a fourth round of talks on expanding ties across the Taiwan Strait. Negotiations for an Economic Cooperation Framework Agreement next year will be conducted based on Taiwan’s needs, and won’t risk its political position, Wu said.
“I don’t think sovereignty will be undermined,” Wu said today. China claims Taiwan as part of its territory. The island has been self-governed since Mao Zedong’s communists took control of the mainland in 1949.
‘Calculated’ Moves
“They want to liberalize cross-strait trade and investment, but not speed things up that may jeopardize industries that could be adversely affected,” said Tony Phoo, an economist at Standard Chartered Bank in Taipei. “They don’t want to project an image of being hasty, but show it’s calculated.”
Taiwan currently restricts local companies from building high-technology factories for making LCDs and advanced semiconductors in China to prevent jobs and technology from moving to the mainland.
China and Taiwan on Nov. 16 signed three memoranda of understanding to ease access to each other’s banks, securities and insurance industries as cross-strait relations reached their warmest in 60 years.
Reliance on China and Hong Kong, which accounted for 42 percent of Taiwan’s exports last month, should be reduced by building trading ties with nations including Japan, South Korea, Canada and Australia, Wu said today.
“We want to diversify our exports rather than concentrate them,” Wu said, without providing details on specific policies.
The government is also looking at ways to allow more Taiwanese to purchase property after a cabinet study found high housing prices in metropolitan areas was a major concern for residents, he said.
“We want to boost purchasing power in central and southern Taiwan and boost supply in northern Taiwan,” Wu said.
