Banks from Taiwan and Singapore are leading the charge to take advantage of mainland China’s recent efforts to open its financial sector to foreign capital.
As of the end of May at least seven foreign invested banks are preparing or have garnered approval to establish new branches or subsidiaries in China according to a report from Shanghai Securities Journal, with the number and pace of approvals seeing a sharp increase compared to preceding years.
The acceleration in foreign bank approvals arrives following a slew of measures over the past several years to expand overseas access to China’s financial sector, including the initial unification of market entry requirements for both Chinese and foreign-invested banks; the cancellation of thresholds on foreign equity holdings in the banking sector in 2018, followed by the launch of 12 external opening measures for the Chinese banking sector this year.
Banks from Taiwan and Singapore are amongst the lenders from outside of mainland China who are most eager to expand into its financial sector.
Earlier this month Taipei’s Fubon Bank became the first Taiwanese-invested bank to obtain approval to operate a branch bank (分行) in the central Chinese mega-city of Chongqing.
Fubon Bank also obtained approval for a branch in the Guangdong province capital of Guangzhou in April, as well as a branch in Xi’an last year.
Since the start of the year Singapore’s United Overseas Bank obtained approval for a branch in the Guangdong province city of Zhongshan, as well as a sub-branch (支行) in the Shanghai district of Xujiahui.
Taiwan’s Bank SinoPac has also obtained approval for a branch in Shanghai, while Hong Kong’s Hang Seng Bank has obtained approval for a foreign-invested sub-branch on Beijing’s Financial Street.
Hong Kong’s Bank of East Asia has also upgraded its Qianhai sub-branch to a full branch, making it the first foreign-invested legal person bank first-tier branch in the Guangdong free trade zone.