Financial Supervisory Commission (FSC) Chairman William Tseng says that connecting the Taipei and Shanghai stock markets may lead to significant short-term fund outflows from Taiwan.
Tseng made the comments at the legislature on Wednesday. He was responding to a comment by China’s Securities Regulatory Commission. A Chinese official recently said he hopes to push for a program that connects the Taipei and Shanghai stock markets—one that is similar to that of the “Shanghai-Hong Kong Stock Connect”.
The Shanghai-Hong Kong Stock Connect was launched last November. The program is an important step in China’s financial reform. It allows investors in Hong Kong and Shanghai to invest in one another’s markets. This means international investors now have access to Chinese stocks from Hong Kong.
William Tseng said that a “Taipei-Shanghai Stock Connect” program would require a consensus within Taiwan. But he said what is certain is that if such a program is launched, Taiwan must prepare itself for several years of large-scale fund outflows.