May 30, 2011

Taiwan: Expanding the Economic Cooperation

Taiwan and China are gradually improving their relations and are now creating the additional space for banks expansion the since the Chinese currency is now allowed to be used by overseas branches of Taiwanese banks.

Below is an article published by Reuters:

Taiwan will allow banks' overseas branches and offshore banking units to conduct business using the Chinese currency, the financial regulator said, in the latest sign of warming trade ties with China.

The move, subject to approval from the cabinet, will permit them to deal with wire transfers, loans and deposits denominated in yuan, according to a statement from the Financial Supervisory Commission late on Thursday [26 May 2011].

Currently, Taiwan and China allow yuan settlement in cash only, as the former political foes still take a cautious approach on the Chinese currency.

Business ties between the two sides have improved to their best levels in six decades since President Ma Ying-jeou was in office. Both sides have inked a landmark free trade agreement, the Economic Cooperation Framework Agreement (ECFA).

"It is aimed to give banks more room for business expansion," the statement said.