TAIPEI (TVBS News) — Taiwan's financial sector is unlikely to be strongly impacted by the ongoing instability in China's real estate industry, the Financial Supervisory Commission (FSC) said on Friday (Aug. 18).
Concerns arose after China's Evergrande Group filed for bankruptcy protection in New York, leading to many worrying about a potential "Lehman Brothers' collapse."
Evergrande Group's astonishing news triggered contagion fears that property development giants Country Garden and the Zhongzhi Enterprise Group might also be on the brink of collapse.
Following an investigation, Taiwan's FSC deemed the risks posed by Evergrande to be relatively limited, adding that no risks were attributed to Zhongzhi, while Country Garden's risk remains light.
The FSC revealed that five Taiwanese banks are selling corporate bonds issued by Country Garden, amounting to NT＄1.7 billion, evenly distributed to 22 professional investors. These bonds have not involved suspended or overdue Country Garden bonds.
Hsieh Shun-feng, an assistant research fellow at the Taiwan Academy of Banking and Finance, stated that despite the increased risk in China's real estate market, the spillover effects are limited, inciting only minor impacts on Taiwan.
He further emphasized that Taiwan's financial institutions and investors need not be overly concerned.