CCB answers call for closer Taiwan ties

PUBLISHED : Friday, 25 June, 2010, 12:00am
UPDATED : Friday, 25 June, 2010, 12:00am

China Construction Bank (CCB) is heeding the call from Beijing for companies to extend the olive branch to Taiwan, with plans by the lender to establish operations on the island.

'We are very keen on the idea of opening up business in Taiwan and it is in the interests of both us and our clients,' said chairman Guo Shuqing at a briefing yesterday.

There were three potential options and CCB would not exclude any of them, according to Zhang Jianguo, the bank's president.

They include setting up a branch office, establishing a joint venture subsidiary company or becoming a shareholder of local banks. Zhang said they were well prepared both in terms of manpower and capital for such a move.

The economic ties between the mainland and Taiwan have become closer following a thaw in the previously icy relations between the two governments. The mainland is Taiwan's most important trading partner, as well as its major trade surplus country.

Data from the Ministry of Commerce shows that in the first 11 months of 2009 the mainland imported goods worth US$76.22 billion, and exported goods of US$18.12 billion to the island.

Thousands of Taiwanese businessmen are running factories making electronic components or textiles on the mainland and an increased presence by mainland banks on the island may help increase investment in Taiwan in the future.

The global economic recession hit Taiwan's other major trading partners but the island quietly survived the crisis largely due to the mainland increasing imports of fruits, agricultural products, electronic products and machineries by big margin.

Separately, CCB also confirmed that it is going to carry out a financing scheme, with Central Huijin Investment giving a commitment to buy shares. Huijin holds 57 per cent of CCB's shares.

CCB has to receive approval for the financing scheme from the China Banking Regulatory Commission and Securities Commission.

The process routinely takes two months, Mr Guo said. 'We will also decide the timing of the rationed shares plan according to the market performance.'