China regulator backs application of 2 Taiwanese banks

CBRC enables upgrading into official branches Cathay United’s Shanghai and Hua Nan Commercial’s Shenzhen offices.

Two more local banks passed the final hurdle to open branches in mainland China, making the total number of Taiwanese banks to establish mainland branches to six.

Beijing's bank regulator the China Banking Regulatory Commission (CBRC) on Tuesday approved the applications by Cathay United Bank and Hua Nan Commercial Bank to upgrade their offices in Shanghai and Shenzhen, respectively, into official branches.

Both banks expressed wishes to have the branches running by the end of the year and to acquire the qualification to operate Chinese yuan-dominated business as soon as possible.

Under the landmark economic cooperation framework agreement (ECFA) Taipei signed with Beijing, Taiwanese bank branches that post profits within one year of starting operations in China can begin offering Chinese yuan-denominated banking services to China-based Taiwanese businesses from the second year and to all China-based businesses after two years of operations if profits are registered for the second year.

Cathay United pointed out that after upgrading its 8-year-old Shanghai office, it will aggressively conduct market surveys, study local regulations and operation patterns in order to better understand the local business climate and to make a comprehensive business plan.

Cathay United Chairman Wang Kuo-hua is currently in the mainland visiting banking regulators in Shanghai and Beijing and to talk with local financial firms with the aim of speeding up branch establishment.

View the full story in China Post.