The Impact of Changes in China's Economic and Financial Situation on Taiwanese Banking Industry (and Countermeasures)

2019/5/1 上午 12:00:00

China currently faces problems including shadow banking, a real estate bubble, a highly leveraged state sector, local debt, illegal fundraising, online financing, irregular wealth management products, and corporate bond defaults. Any misstep could trigger systemic risks. Based on this, in early 2018, the Financial Stability and Development Commission established by the China Banking Regulatory Commission (CBRC) in November 2017 and the People’s Bank of China (PBOC) established a bottom line of comprehensive prevention of system risks, which also highlights the importance of risk prevention policies to China.

In light of the close cross-strait economic and trading relationships, changes in China economic and financial situation can greatly impact Taiwan’s economy. This study will research and analyze China’s overall economy and finances. Due to policy continuity, follow-up developments of major past policies will continue to be tracked. Furthermore, the impact on cross-strait economic, trade, and financial exchanges will be self-evident in case China indeed undergoes drastic changes. This study also researches major non-recurring issues and events in order to clarify possible risks and losses for Taiwanese banks. Finally, resulting risk assessments and countermeasures are put forth for regulators to consider.