"In interviews with Taiwan Business TOPICs that preceded Premier Chen’s remarks about fostering consolidation, some financial industry leaders spoke about the importance of having fewer, larger banks and how the process could be facilitated. “The financial services industry needs a lot of scale, and Taiwan doesn’t have it,” said Victor Kung, president of Fubon Financial Holding Co. “Within Taiwan, we are a very fragmented industry, so our banks are very small. Even the largest, the Bank of Taiwan, is ranked number 100 in the world. While all the other economies in East and Southeast Asia have consolidated their banking industry during the Asian financial crisis, Taiwan has never really developed a giant or a national champion. We do need such a national champion, but in my view it shouldn’t be a government-controlled bank, because as we know, the vitality of the Taiwan economy is in the private sector.
With increasing cross-Strait economic integration, what are the challenges and opportunities for Taiwan’s financial institutions?
The question of cross-Strait investment involves not only banking, but also insurance and securities. China has permitted six Taiwanese securities companies to enter its stock market as RQFII [RMB qualified foreign institutional investors], and five of the six have been granted investment quotas, which means they can truly buy and sell in the market.The Chinese government is trying to introduce more financial products to the market and more innovations in financial services, which presents a good business opportunity for Taiwanese companies.
As to the risks, they are under effective control, such as the cap on total exposure. The FSC continues to carefully supervise all related activities." (SHAPIRO, 2012)
http://www.amcham.com.tw/content/view/3547/519/
I find this information significant because once again, the information provided shows the progress and setbacks of the country trying to stand on its own two feet. Unfortunately Taiwan's economic status is weekend due the Asian financial crisis. Because their banking system is controlled by the government (ROC) they sadly have little to no control over their economic status. Though its seams that China is slowly trying to help bring Taiwan's banking system back up, Taiwan (wanting to break from China) is conflicted on excepting their help.
My concerns would be by excepting China's help yet again, they will further lose their ability to break away and become a democracy.
Due to this financial help, will China use this as a hold over Taiwan? Will it be another way for them to keep a tighter grasp on them? Thus showing them (Taiwan) that they could not survive financially without them?
