Taiwan asks state-owned banks to 'appropriately handle' China. Here's why

China-Taiwan Conflict: Taiwan's financial regulator said last month that Taiwanese banks' exposure to China had hit their lowest ever level.

Taiwan has asked state-owned banks to "appropriately handle" their exposure to China, Finance Minister Su Jain-rong said on Monday, amid the current trade and political tensions between Taipei and Beijing.

China-Taiwan Conflict: A Chinook helicopter carrying a Taiwan flag flies over the city during the country's National Day celebration in Taipei, Taiwan. (Reuters)

Taiwan's financial regulator said last month that Taiwanese banks' exposure to China had hit their lowest ever level, at a time when China has been pressuring the island militarily and diplomatically to accept Beijing's sovereignty.

Asked by a lawmaker at a parliamentary session whether state-owned banks should be re-examining their investment risks in China, Su said: "State-owned banks have already been required to actively handle their China exposure appropriately".

Taiwan's big state-owned banks include Bank of Taiwan , Taiwan Cooperative Bank Ltd and Land Bank of Taiwan Co Ltd.

Taiwan complained last week that China has banned more Taiwanese food and beverage imports in what the government says is part of a pressure campaign by Beijing targeting the Taiwanese food, agriculture and aquatic sectors.

Agriculture and food and drink production is not a major part of Taiwan's semiconductor-oriented economy.

But the farming and fishing community is largely based in parts of the island that traditionally support the ruling Democratic Progressive Party, especially in southern Taiwan.

Su said the impact on the alcoholic beverages sector from the latest Chinese ban was "not bad", putting the value of the affected exports at about T$1 billion ($32.57 million).