Taiwan expects limited fallout from Brexit

2016/06/28

The U.K.’s decision to exit the EU has little impact on Taiwan at present, but the government will keep a close on future developments and stands ready to act, according to Cabinet spokesman Tung Chen-yuan June 27.

“With crisis comes opportunity that Taiwan must be able to recognize and grasp,” Tung said, relaying remarks by Premier Lin Chuan during a meeting with the heads of the Ministries of Economic Affairs, Finance, Foreign Affairs, Central Bank, Financial Supervisory Commission, National Development Council and other relevant central government agencies.

Lin said after the Brexit, the U.K. and EU may expand their economic and trade relations with Asia, and the current international financial markets could show more interest in investing in Taiwan. “The MOEA must devise related approaches to encourage investment in Taiwan should any opportunity arise,” he added.

According to the premier, the U.K. will reposition and renegotiate its relations with all the global trading partners. “Taiwan must be prepared has to cope with the new situation,” he said.

The MOEA is of the opinion that the Brexit will have little short-term effect on Taiwan, but will keep a close eye on possible mid- and long-term impacts, and take necessary actions.

Echoing the MOEA, the MOF said Taiwan must guard against future derivative fluctuations and market panic. “The ministry stands ready to stabilize the local bourse and ensure financial stability.”

The Central Bank also sees the Brexit as having limited direct impact on Taiwan, and anticipates resultant changes in the international economy as influencing investment and consumption in Taiwan.

According to the FSC, Taiwan’s financial institutions have good fundamentals, limited risk exposure to the U.K. market and should be minimally affected by the Brexit.

The NDC believes that if the international financial turmoil quickly subsides, Taiwan will emerge relatively unscathed. But if there is a continuation, a chain reaction could reach Taiwan.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=245836&ctNode=2194&mp=9)