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China remains Taiwan's largest debtor: central bank

TAIPEI--China remained Taiwan's largest debtor as of the end of December as local banks' exposure to Beijing increased sharply over the fourth quarter of 2014, according to statistics compiled by Taiwan's central bank.

On an ultimate risk basis, which calculates consolidated debts shouldered by one country after risk transfers, outstanding international claims to China from Taiwan's banks, including their offshore banking units, skyrocketed from US$13.9 billion at the end of the third quarter to US$64.92 billion at end of the fourth.

The United States was the second largest debtor, with local banks' exposure totaling US$47.45 billion, ahead of No. 3 Luxembourg, which held US$41.01 billion in debt, No. 4 Hong Kong with US$19.55 billion and No. 5, the United Kingdom, with 7.95 billion.

In total, outstanding international claims on Taiwanese banks on an ultimate risk basis at the end of December came to US$269.13 billion, an increase of 10.20 percent from the end of September, the statistics showed.

The central bank said growing bank exposures reflected rising interbank lending and expanding loans to overseas clients during the three-month period.

In terms of direct risk, local banks' outstanding international claims rose to US$254.79 billion by the end of December, an increase of 8.21 percent from the end of September.

China also ranked as the largest debtor to Taiwan on a direct risk basis, with outstanding international claims reaching US$45.88 billion, followed by Luxembourg at claims of US$41.90 billion in debt, the U.S. at US$29.40 billion, Hong Kong at US$26.36 billion and the British West Indies at US$13.24 billion.

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