Taiwan clears first China bank investment

 

Taiwan's financial regulatory body on Thursday allowed Fubon Financial Holding Co to invest $34 million (Dh125 million) in a bank in China, the first time a local bank has been allowed to invest in the mainland.

 

The approval for the investment came less than two weeks after Ma Ying-jeou of the China-friendly Kuomintang party won the presidential polls in a landslide. He will succeed independence-leaning President Chen Shui-bian.

 

Fubon will acquire a 20 per cent stake in Xiamen City Commercial Bank through its Hong Kong subsidiary, the Financial Supervisory Commission (FSC) said in a statement.

 

Fubon's Hong Kong subsidiary has $7.78 billion (Dh29 billion) in assets, according to the commission.

 

The FSC said it had given the go-ahead because the investment "will be conducive to the enhancement of local banks' international competitiveness by providing an integrated service platform for Taiwanese investors," it said.

 

Fubon Financial, one of Taiwan's leading financial groups, also operates insurance and securities businesses.

 

Despite lingering hostilities between Taipei and Beijing, China is Taiwan's leading foreign investment site, with an estimated $150 billion (Dh551 billion) invested over the years by Taiwan businesses in a wide series of projects.

 

Ma has vowed to work to improve trade, tourism and transport links to China and to work for a peace treaty to end decades of hostilities which began when Taiwan split from the mainland in 1949 after a civil war.

 

With more Chinese tourists coming to Taiwan, Ma has also guaranteed to allow comprehensive conversion of the local dollar and Chinese yuan.

 

Taiwan has allowed currency exchange on Kinmen and Matsu, two fortified islets just off China's southeastern Fujian province, on a trial basis since October 2005. (AFP)