5 Chinese banks can apply for Taiwanese branches

China wants its banks to directly establish branches without the need of setting up representative office first.

The Ministry of Economic Affairs (MOEA) has publicised conditions for Chinese financial institutions to enter the Taiwanese market, according to which some five Chinese banks will be able to set up representative offices in Taiwan but only Bank of China is qualified to establish a Taiwanese branch or buy into domestic banks.

The Chinese side, however, has intended to strive for permission for Chinese banks to directly establish branches in Taiwan, without the need of setting up representative office first, similar to the existing treatment for foreign banks, during the talk for cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA).

With the publication of the conditions, the Financial Supervisory Commission (FSC) is ready to accept investment applications by Chinese financial institutions, which, however, must first obtain the approval of China Banking Regulatory Commission. According to the conditions, as well as related laws and regulations, five Chinese banks will be able to apply for the setup of representative office, including Bank of China, Industrial Commercial Bank of China, China Construction Bank, Bank of Communications, and China Merchants Bank.

View the full story in CENS.