Taipei [Taiwan], July 16 (ANI): Taiwan’s financial exposure to China fell sharply by the end of May as concerns mount over China’s slowing economy and growing political instability, Focus Taiwan reported.
The Financial Supervisory Commission (FSC), Taiwan’s top financial regulator, announced Monday that the combined exposure of the island’s banking, insurance, and securities sectors to China dropped by NT$201.3 billion — nearly 20 percent year-on-year — to NT$828.39 billion (US$28.25 billion).
The figure also marked a NT$48.56 billion decline compared to April. Although the FSC did not confirm whether currency fluctuations contributed to the drop, officials attributed the decline mainly to reduced risk-taking amid ongoing uncertainty in China’s economy and property market.
Banks accounted for the largest portion of Taiwan’s exposure at NT$768.45 billion, or 92 percent of the total — down 18.67 percent from a year earlier. This brought the banking sector’s exposure-to-net-worth ratio with China to a record low of 15.9 percent, Focus Taiwan reported.
Chang Chia-kuei, chief secretary of the FSC’s Banking Bureau, noted that Taiwanese banks significantly reduced interbank loans to China, which fell by 35 percent year-on-year. “The decline highlights increasing caution among Taiwanese lenders regarding China’s economic trajectory and property sector risks,” he said, according to Focus Taiwan.
Among individual banks, CTBC Bank had the highest exposure to China at NT$180 billion, followed by Taipei Fubon Bank at NT$85.8 billion and Bank SinoPac at NT$62.5 billion. Their exposure-to-net-worth ratios stood at 49 percent, 31.1 percent, and 35.5 percent, respectively.
The insurance sector saw a 30 percent drop in investments in Chinese marketable securities, which totaled NT$49.9 billion — all held by life insurance companies. Tsai Huo-yen of the FSC’s Insurance Bureau noted these investments accounted for just 0.15 percent of the industry’s disposable capital.
Meanwhile, securities and futures companies cut their exposure to China by 21 percent to NT$10.04 billion, with Focus Taiwan citing concerns over U.S. tariff policies and broader market uncertainty as contributing factors. (ANI)
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