CashNews.co
Taiwan’s financial services sector has reduced its exposure to mainland China in the wake of uncertainties arising from the political and economic situation across the Taiwan Strait and the on-going Sino-US trade war.
According to the latest statistics from the Financial Supervisory Commission (FSC), the combined mainland China exposure of the insurance, banking, and securities sectors in Taiwan stood at NT$1.02tn ($31.7bn) as of 30 June 2024. This was a cut of around NT$100bn or 8.9% compared with 12 months previously.
The exposure of Taiwan’s insurance industry is mainly due to investments of life insurance funds in mainland Chinese securities. The FSC data show that as of the end of June this year, life insurance investments in China dropped to NT$70.3bn, a drop of NT$24.5bn or 26% compared with 30 June 2023. The NT$70.3bn represented 0.21% of the overall insurance industry’s available funds (30 June 2023: 0.30%).
The Taiwanese property and casualty insurance sector has not had any exposure to mainland China since January 2023.
Officials of the Insurance Bureau of the FSC said that the reason for the lower insurance industry’s exposure was mainly related to the current political and economic situation and the rise in geopolitical risks.
Taiwan’s financial sector’s exposure to mainland China
-
Sector
Exposure @ 30 June 2024 NT$ bn
Reduction in exposure in 1H2024
NT$bn
Percentage
Insurance
70.3
24.5
-25.8%
Banking
936.2
74.0
-7.3%
Securities
14.2
1.5
-9.7%
Total
1,020.7
100.0
-8.9%
The exposure to China refers to credit, investment, and capital. The figures exclude data for Hong Kong and Macau.