Banking Deals Between China and Taiwan

Will the outcome of this weekend’s presidential election in Taiwan affect banking deals between China and Taiwan? 

David Nealis in Taipei Taiwan

Taiwan recently said it would allow Chinese banks to take up to five percent stake in Taiwanese banks, this isn’t exciting economic news but it is very exciting political news. China and Taiwan signed a trade deal in June 2010 that brought access to investment in China’s banking market but due to its political sensitivity it has been are to implement.  

Two of China’s four largest banks, the Industrial and Commercial Bank of China (ICBC) and the China Construction Bank (CCB) are expected to be the first banks to invest in Taiwanese banks. The other two banks, The Bank of Communication and the Bank of China have been given permission by Taiwanese authorities to upgrade their Taiwan offices to bank branches. The Taiwanese bank Nan Financial is bidding to become the first Taiwanese bank to make a direct investment in mainland Chinese bank, by taking a 20 percent stake in Fujian Haixia Bank this will be the first deal will be the first.

With Taiwan’s economy being export dependent, the global economic slowdown may affect corporate demand for lending on the island, an investment by Chinese banks into the Taiwanese banking sector could help during the downturn of the Taiwanese banking sector.