That reality may dent Taiwan's economic success, as money is the fuel for continued growth. In a bid to maintain its competitiveness, the island is trying to reform its antiquated banking system. Scheduled to be fully privatized in 1997, the Farmers Bank of China and the Chiao Tung Bank have already listed on the Taiwan Stock Exchange. Three provincial-level banks are next in line.
Authorities also intend to expand the role of offshore banking units.
The government will permit OBUs to engage in all types of capital movement by 2000, including accepting NT dollars and deposits from Taiwan residents. In future, OBUs will even be allowed to conduct direct transactions with banks in mainland China. In the end, Taiwan's liberalization efforts may hinge on something beyond the government's control. If we do not have a political threat from China, Taiwan's financial sector will become more and more competitive. All Rights Reserved.