Fubon financial became the first major Taiwan bank to take a direct stake in the banking market of the People's Republic of China in June through a direct 20% investment in a domestic Chinese commercial bank in Xiamen, a port city in Fujian province opposite Taiwan's Kinmen Island and a favoured site for thousands of Taiwan businesses. The door for Fubon's foray in indirect equity investment was opened by the outgoing Democratic Progressive Party cabinet, which approved March 12 proposals by the Financial Supervisory Commission to allow Taiwan banks to purchase as much as a 20% stake in PRC banks through third- country subsidiaries and to ease restrictions on Taiwan-based offshore branches that will allow them to accept accounts receivable transactions in the PRC.
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