A view of the Shanghai FTZ. (Photo/Chiu Kuao-jen)
Nine Taiwanese businesses, mostly trading companies, have registered to operate in the Shanghai Free Trade Zone (FTZ), according to the head of a Taiwanese chamber of commerce in the city.
Hector Yeh, chief of the Shanghai Association of Taiwan Businesses, said that six trading companies, two consultancy firms and one electronics materials company had registered with the zone with a combined capital of US$3.1 million as of Dec. 3.
The apparent limited interest shows that most Taiwanese businesses are still adopting a wait-and-see approach to the FTZ, Yeh said. Their primary concern is whether registering for the Shanghai FTZ will help boost competitiveness, he said.
While the zone's financial service sector is most attractive, it is still dominated by Chinese banks, he said.
One Taiwanese bank operator put it more bluntly. "Everyone's saying the FTZ is great and is developing, but what can we do once we move in there? It would be more practical if we were allowed to first do comprehensive business with the Chinese yuan as Chinese banks can," said the source, who requested not to be named.
Taiwan's most "localized" bank in China to date is Chang Hwa Bank's Kunshan branch, which was given a green light in April to undertake limited yuan operations. It is only allowed to bank with Taiwanese customers and enterprises and Chinese businesses, but not Chinese individuals.
Over 2,000 businesses have reportedly registered in the Shanghai FTZ since it was launched in late September, around 80% of which are based in China.