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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (3357)	7/14/2004 12:28:53 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Bridging the Taiwan Strait with yuan TAIPEI - In what could be a significant cross-Strait economic bridge, the Central Bank of China (CBC) is working on regulations for mainland Chinese currency exchange services, according to the cabinet-level Mainland Affairs Council (MAC). A few Chinese coastal banks already accept Taiwan currency. The move, on a trial basis, could be a significant step in improving cross-Strait economic ties. Some Taiwan businesses already accept the mainland yuan, or renminbi. Political ties, however, are a separate, seemingly intractable issue. Many Taiwanese feel no allegiance to China, and President Chen Shui-bian is considered a divisive pro-independence separatist by Beijing. China considers the island an unruly province, but it needs major economic investment from Taiwan. Fu Tung-cheng, director of the Mainland Affair's Council's economic affairs department, made the remarks about currency exchange on Monday after a restaurant chain in Taipei displayed a poster saying it would accept payment in yuan, the mainland's currency, officially called the renminbi, or "people's currency". The store's move has drawn concern about whether the government will allow local banks to open mainland currency exchange services. Fu said the central bank is considering designating several banks to offer yuan exchange services on an experimental basis. Since the central bank is still working on relevant regulations, Fu said, the MAC, which charts Taiwan's policy toward mainland China, declined comment on the issue. According to media reports, the restaurant chain, which was not identified, has opened branch stores on the mainland. For the convenience of taishang - Taiwan business people operating on the mainland - who make homecoming trips, as well as tourists from Hong Kong, Macao and mainland China, the chain store said it decided to accept payment in yuan at an exchange rate of one yuan to NT$4.1 (US$0.21). The store said it only accepts yuan-denominated payments but does not offer currency exchange services. Central Bank of China deputy governor Hsu Yi-hsiung was quoted as saying that Taiwan stores that accept mainland currency must take the risk of failing to be able to exchange it for New Taiwan dollars. At present, no Taiwan bank offers mainland currency exchange services. As the number of Taiwan stores willing to accept yuan is expected to increase, along with the gradual opening of the island to mainland tourists, Hsu said the central bank is mulling whether to designate several local banks to offer mainland currency exchange services at their branches in selected cities. For instance, the mainland has designated some of its banks in the southeastern coastal city of Xiamen to operate New Taiwan dollar exchange services. The government has allowed local citizens to bring a maximum of 6,000 yuan ($726) into Taiwan since March 1, making the mainland currency exchange issue more urgent. Against this backdrop, media reports said, the newly inaugurated Financial Supervisory Commission, the CBC and the MAC are discussing how to regulate mainland-currency exchange services by certain selected banks. Taiwan business people operating on the mainland, and those with relatives there are pressing for establishment of the "three links" - direct air passenger, cargo and postal services between Taiwan and the mainland. Virtually no progress has been made. (Asia Pulse/CNA) atimes.com