(08 April 2013 – China) There have been major breakthroughs between China and Taiwan to ease market access rules for banks seeking to own stakes in other banks.The cross-strait banking talks reached a consensus after a closed-door meeting in Taipei between Financial Supervisory Commission chairman Chen Yuh-chang and China Banking Regulatory Commission (CBRC) chairman Shang Fulin.
When approved, the new rules will allow individual Chinese lenders to own up to 10 percent of listed financial holding companies in Taiwan compared to the existing 5 percent.
The stake, may not exceed 15 percent once shares obtained on the open market by Chinese institutional investors are factored in, compared to the present limit of 10 percent.
The cap for Taiwanese unlisted financial holding companies and banks is now 15 percent, and 20 percent for banking subsidiaries of financial holding firms.
Chinese investors may choose to invest in financial holding companies or banking units but not both.
Taiwan and China also agreed to remove the requirement that banks have five years of prior operational experience in advanced economies before being allowed to establish branches in bilateral markets.
Chinese banks with branches in Taiwan will be allowed apply to set up new branches and conduct offshore banking. China UnionPay Company, China’s only credit card network, will be allowed also file an application to establish a branch in Taiwan.
Chinese banking regulators also pledged to speed up their review of plans by Taiwanese lenders to open new branches or outlets in China.
Beijing also agreed to work out a mechanism to allow renminbi to flow back to China more easily.