Taiwan banks get green light to open mainland office

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 ◆ Taiwan banks get green light to open mainland office

Two Taiwan-based commercial banks have been officially given the green-light to open offices on the mainland, making them the first Taiwan-based banking companies to be set up in the Chinese mainland.

The United World Chinese Commercial Bank will be allowed to establish an office in Shanghai, while the Changhwa Bank will be allowed to set up an office in the nearby city of Kunshan, said China's central bank governor Dai Xianglong on Monday.

"The procedures were completed after we received applications from eight Taiwan-based commercial banks, and we will allow them to open branches soon, in line with the mainland's laws and regulations," said Dai.

"This is terrific news for financial co-operations between the two sides across the Taiwan Straits," said Dai. "It could also be a strong boost to the economic and trade growth between the two sides."

He also said the central government is encouraging mainland-based financial institutions to be set up in Taiwan in a move to boost cross-Straits economic and trade links.

"We also believe that the Taiwan authorities will welcome the commercial banks from the mainland to launch branches and representative offices in Taiwan," said Dai.

Meanwhile, China is studying a proposal to allow a fund firm to collect and invest some individual foreign exchange savings in the Hong Kong stock market.

The move is billed a practical way to boost Hong Kong's stock market under the current situation, when there is still a substantial time before the local yuan currency becomes fully convertible.

If there is a qualified financial institution that could put together foreign exchange owned by mainland residents and invest it in the Hong Kong stock market, it will be a way of investment worth consideration, he said.