Taipei, July 3, 2009 (CENS)--China will accept the principle of proportional arrangement for cross-Taiwan Strait financial-market opening, said Liu Minkang, chairman of China Banking Regulatory Commission (CBRC) yesterday (July 2).

In a meeting with a delegation of Taiwanese legislators in Beijing, Liu stressed that China will not insist on the principal of equality in form for the mutual market opening, echoing the proposal of "weighted equality" for the opening raised by Sean Chen, chairman of the Financial Supervisory Commission (FSC), recently. "The proportion can be, say, 7:2 or 7:3," said Liu.

Liu also pointed out that following the signing of MOU, the existing seven representative`s offices of Taiwanese banks can apply to be upgraded to branches.

Liu, though, noted that Taiwanese banks will not be able to undertake renminbi-denominated businesses initially, since it is a treatment surpassing China`s WTO (World Trade Organization) commitments. Such a treatment can be made possible only via the talk on Economic Cooperation Framework Agreement (ECFA), according to Liu.

In a separate meeting with the delegation, Wang Yi, director of Taiwan Affairs Office, the State Council, urged both sides of the Strait to handle the problem of financial-market entry wisely under the WTO regulations. Chinese banks, for instance, worry that Taiwan may also require Chinese banks to set up representative`s offices in Taiwan first and wait for two years before being permitted to upgrade them to branches.

The remarks conform to the recent remark of Sean Chen that the cross-Strait financial market opening will progress in three stages: the signing of the MOU, laying the groundwork for the opening; initial market opening under WTO regulations; and expanded market opening surpassing WTO commitments of both sides following the signing of ECFA.


(by Philip Liu)