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Xiamen eyes role as financial hub

Updated: 2012-04-27 10:31

By Tan Zongyang in Xiamen and Hu Meidong in Fuzhou, Fujian (China Daily)

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Xiamen, in eastern Fujian province, aims to become a regional financial hub dedicated to serving growing cross-Straits trade, said a top local official.

"Xiamen will be the forerunner to strengthen currency and finance cooperation with Taiwan," Zhong Xingguo, deputy secretary of the Xiamen municipal Party committee, said on Thursday at the 2012 Cross-Straits Economic and Trade Forum in the city.

He said that a 21-square- kilometer financial service center, with a total investment of 30 billion yuan ($4.8 billion), was under construction as a center for financial companies from Taiwan to expand their business in the mainland.

"We encourage qualified Taiwan-funded banks, securities firms, insurance companies and other financial institutions to set up headquarters or fund operation hubs in Xiamen," he said.

The city is also taking initiatives to develop the monetary settlement mechanism in trade with Taiwan and hopes to expand the cross-border yuan settlement business.

Nearly 30 mainland cities have ambitions of being either a national or regional leader in finance.

But Xiamen is the only city to set its sights on becoming a financial hub in the western region of the Taiwan Straits by taking advantage of warmer economic ties between the mainland and Taiwan since 2008.

Last year, the volume of trade between the mainland and Taiwan reached $160 billion, up 10.1 percent year-on-year. The latest statistics show that the mainland remains Taiwan's biggest trade partner.

In 2009, the mainland and Taiwan signed a set of agreements to open up their financial service industries to each other and allow direct investment in Taiwan from the mainland, which accelerated the city's ambition to attract financial companies from across the Straits.

Wang Liaoping, president of the Association of Economy and Trade Across the Taiwan Straits, said at the forum that Xiamen should play a leading role in deepening financial sector cooperation between the mainland and Taiwan.

The city, which is home to 266 banking, insurance and securities companies, has more highly developed financial services than other cities in the region. Xiamen Bank was the first bank in the mainland to be jointly funded with Taiwan investment.

Taiwan-funded insurance companies, such as Taiwan Life Insurance Co and Fubon Property Insurance Co have already started business in Xiamen and made profits, said Zhong Xingguo.

Han Mingzhi, chairman of the board of the supervisors of China Merchants Bank, said lenders in the mainland and Taiwan could give mutual support to each other based on relative advantages.

"Mainland banks, now with total assets of more than 113 trillion yuan, are much larger than their Taiwan counterparts. However, Taiwan banks are better at retail banking and serving the needs of the small and medium-sized enterprises. They also perform well in financial innovation and risk management, which should be learnt by banks on the mainland."

However, Han said the home market of Taiwan banks is saturated, and the business is highly competitive. Meanwhile, many of their corporate clients have moved their manufacturing operations to the mainland, where the financial market is growing rapidly.

Fan Liqing, a spokeswoman for the State Council Taiwan Affairs Office, said in Beijing on Wednesday that the mainland will support more qualified Taiwan-funded banks that wish to engage in yuan-based business and increase the number of outlets as quickly as possible.

She said 10 Taiwan banks have been approved to set up branches in the mainland, and seven of them have already gone into business. One of those banks was allowed to provide yuan-based financial services for Taiwan enterprises.

"The mainland will support qualified Taiwan-funded banks that wish to engage in yuan-based business and increase the number of outlets as quickly as possible."

She said the mainland will also encourage financial companies on both sides to cooperate more by purchasing each other's stocks.

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