Taiwan to ask China for more investment quotas

The establishment of a clearing system for Chinese yuan transactions in Taiwan has raised hopes that Taiwan will play a key role in the internationalization of the yuan, boding well for higher quotas as well as for Taiwan to join Hong Kong in becoming an off-shore yuan centre.

Chairman Guo Shuqing of the China Securities Regulatory Commission is set to visit around February, with the higher quotas on the agenda for talks between the two sides, said Lee Jih-chu, vice chairwoman of Taiwan’s Financial Supervisory Commission.

Chinese quotas for Renminbi Qualified Foreign Institutional Investment (RQFII) and QFII allow foreign investors to use offshore yuan to buy mainland securities. “We’re making an all-out effort to get as much QFII and RQFII quotas as possible. After all, it’s very difficult to apply, as so many foreign investors are already waiting in line,” Lee told Reuters on Wednesday.

“A global financial group has been awarded a QFII quota of only $1 billion,” she said, without elaborating further.

Fubon Financial, one of the island’s top five financial holding firms, is among a few Taiwanese companies that have been granted a QFII quota, of $400 million.

Taiwan, whose banking sector has generated lower returns on equity than most Asian peers, is hoping to take advantage as China plans to make the yuan basically convertible as

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