Yuan exchange urged for Taiwan
With the island opening up to mainland tourists, Taiwan's bankers and businessmen are calling for cross-strait authorities to set up a currency clearing and settlement system to cope with incoming flow of yuan.
The chairman of the Taipei-based Central Trust of China, Shea Jia-dong, said it was a pressing need for Taiwan because the opening of the door to mainland tourists would probably be announced as early as next month.
'We hope that the mainland and Taiwan governments will trust non-governmental organisations to make an agreement as soon as possible. The details can be based on the 'Macau model' in cross-strait holiday charter flights and the 'mini-three links',' Mr Shea said on the sidelines of a cross-strait economic forum in Hong Kong.
'We know it's impossible for officials to sit together due to their political disagreement.'
Mr Shea said a formal clearing system would also help Taiwan authorities deal with the rampant problem of counterfeit yuan and money laundering. 'The two problems have worsened in Taiwan because no one was authorised to deal with them,' he said. 'And almost all yuan exchanges have been cleared and settled by underground banks. It would be a disaster if billions of yuan flows in.'
Taipei has allowed each mainland tourist to exchange a maximum of 20,000 yuan to Taiwan dollars in Kinmen and Matsu since opening them to mainland tourists in 2005. It will expand the policy to the main island when it is completely opened.
Marc Fong Dai-nein, a Taiwanese businessman in Shanghai, said he was losing up to 4 per cent of his profits in exchanges because money had to be changed to a third currency first.
Former Taiwanese premier Vincent Siew and a vice-chairman of the mainland's National People's Congress, Jiang Zhenghua , said they would encourage authorities to set up the clearing system because it would help cross-strait economic development.
Amount of yuan Taiwanese media have estimated is circulating in the island's economy 100b