Taiwan asks state banks to “properly manage” exposure to China

Finance Minister Su Jain-rong makes comments in response to a question about the risks of investing in China.

Taiwan has asked state banks to “properly manage” their exposure to China, Finance Minister Su Jain-rong said, amid trade and political tensions between Taipei and Beijing.

Taiwan’s financial regulator said last month Taiwanese banks’ exposure to China had hit its lowest level, at a time when China has been militarily and diplomatically pressing the self-governing island to accept Beijing’s sovereignty.

Asked by a lawmaker in a parliamentary session on Monday whether state-owned banks should re-examine their investment risks in China, Su said: “State-owned banks have already been required to actively manage their exposure to China appropriately.”

Large state-owned banks in Taiwan include Bank of Taiwan, Taiwan Cooperative Bank Ltd, and Land Bank of Taiwan Co Ltd.

Taiwan complained last week that China has banned further imports of Taiwanese food and drink in what the government says is part of a pressure campaign by Beijing targeting Taiwan’s food, agriculture and aquatic sectors.

Agriculture and food and beverage production are not significant parts of Taiwan’s semiconductor-oriented economy.

But the farming and fishing community is largely based in parts of the island that traditionally support the ruling Democratic Progressive Party, especially in southern Taiwan.

Su said the effect on the spirits sector of the latest Chinese ban was “not bad”, putting the value of affected exports at around 1 billion New Taiwan dollars ($32.55 million).