Banks in Taiwan are preparing for a cutback in lending to China amid expectations that the new Democratic Progressive Party government could take steps to restrict their exposure, local bankers say. Tsai Ing-wen, leader of the pro-independence DPP, assumed office as Taiwan's new president on Friday after winning a landslide victory in January. She faces a tricky balancing act to rekindle the economy while maintaining good relations with China, the world's second-largest economy and Taiwan's largest trading partner. Taiwanese lenders have already made efforts to reduce their reliance on China, partly as a result of restrictions from Taiwanese regulators and partly due to the economic slowdown in the mainland that has increased the risk of defaults, particularly from privately owned enterprises.
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