On the morning of September 19, President Ma Ying-jeou met with a delegation led by Mr. Michael Corbat, Chief Executive Officer of Citigroup. The president welcomed Mr. Corbat to Taiwan and briefed him on the successes of the government's efforts to promote financial liberalization and internationalization.
In remarks, President Ma stated that while en route to Paraguay in August of last year he made a transit stop in New York City and attended a luncheon where Mr. Corbat and other local business leaders were present. He and Mr. Corbat had cordial discussions at that time, and the president said he was extremely pleased to meet with him again.
President Ma noted that Citibank established a branch in Taiwan in 1965, becoming the first American bank to establish a branch office here, and a subsidiary, Citibank Taiwan, Ltd., was established in 2007.
The president explained that as of the end of July this year, a total of 27 foreign banks had established 36 branches in Taiwan, including Citibank, Standard Chartered, HSBC, DBS Bank, and the Australia and New Zealand Banking Group (ANZ). Some of them, moreover, have established subsidiary banks here. In addition, he said, the Cabinet-level Financial Supervisory Commission recently agreed to allow Taiwanese banks to outsource the operation of their consumer banking data systems to offshore entities, and foreign banks are now allowed to maintain both subsidiary banks and branches in Taiwan at the same time. The president expressed confidence that these moves will encourage foreign banks to devote more banking resources here, thereby continuing to contribute to the stable growth of Taiwan's financial sector.
President Ma emphasized that the government must further deregulate and open its markets in order to join the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). In fact, the government has also set out plans to establish free economic pilot zones—six seaports and one airport—in a bid to transform Taiwan into a free economy island. The president commented that deregulatory measures adopted for the pilot zones also apply to financial service providers [regardless whether they are in a pilot zone or not], which will enable Taiwan to develop into an asset and wealth management center for offshore clients. At the same time, the government is promoting a "financial import substitution" initiative to help Taiwan's financial service providers expand their presence throughout Asia and provide a wider range of banking services to Taiwan-invested firms operating overseas.
President Ma further stated that in the first seven months of this year, the total pre-tax profits of local banks stood at US$6.9 billion, up 29% from the same period last year. Meanwhile, pre-tax profits from offshore banking units (OBUs) reached US$1.78 billion, up 64% year-on-year. The pre-tax profits of branches of foreign banks in Taiwan reached US$460 million, also up 63% from the same period a year ago. All of this data shows the substantive success of the government's efforts in recent years to promote financial reform here.
The president stressed that Taiwan had made little substantive progress toward becoming more involved in regional economic integration despite joining the World Trade Organization in 2002. In order to prevent Taiwan from being marginalized, six years ago after he took office his administration initiated efforts to negotiate and sign economic and investment agreements with mainland China, Japan, New Zealand, and Singapore. Taiwan also has demonstrated willingness to join the TPP and the RCEP so as to hasten the pace of Taiwan's economic liberalization and internationalization. The banking industry also plays an important role in this.
The president also mentioned that last year the value of trade between the two sides of the Taiwan Strait (including Hong Kong and Macau) exceeded US$160 billion. Given that mainland China is Taiwan's largest trading partner and is the world's second largest economic entity, neither its market for goods nor its financial services market can be neglected. Looking ahead, he said he hopes that domestic banks can further advance throughout Asia, and that Citibank will continue to be an important partner for Taiwan in its economic growth.
President Ma remarked that Citigroup has introduced advanced services and concepts, and also takes active part in public service activities organized by the United Way and other organizations. The president, in his capacity as honorary chairman of United Way of Taiwan, expressed his gratitude to Citigroup for its longstanding cooperation with United Way of Taiwan and joint promotion of community service fundraising activities.