Legislators from across the political spectrum expressed mixed opinions yesterday on whether the government should allow yuan exchange services on Taiwan proper.
Ahead of an expected influx of Chinese tourists, the Democratic Progressive Party (DPP) legislative caucus proposed that before a cross-strait currency agreement is signed, selected Taiwanese banking institutions be authorized by the central bank and the Financial Supervisory Commission to offer exchange services on a trial basis.
But People First Party Legislator Liu Yi-ju (劉憶如), during a session of the legislature's Home and Nations Committee, said it would be inconvenient for Chinese tourists to exchange yuan at selected banks, adding that the measure would only contribute to increasing the amount of counterfeit yuan in circulation in Taiwan, which would in turn jeopardize financial stability.
Exchanging New Taiwan dollars and yuan is only permitted on Kinmen and Matsu.
Liu said the government should seek to build a cross-strait currency exchange mechanism by cooperating with the Bank of China (Hong Kong) Co, which was authorized by Beijing three-and-a-half years ago to conduct free exchange between the yuan and foreign currencies.
After lawmakers failed to reach a consensus, DPP Legislator Chang Ching-hui (張慶惠), convener of the session, ruled that the matter should be debated again after inter-party negotiations are completed.
Unconfirmed reports claim that Taiwanese have amassed more than 100 billion yuan (US$3.03 billion) in recent years.
The accumulation of Chinese currency in Taiwan can be attributed to a combination of factors, including Beijing's chronic trade deficit with Taiwan and the inclination of Taiwanese businesspeople operating in China to bring the currency home with them, sources said.
In March 2004, the central bank allowed each Taiwanese to bring in up to 6,000 yuan per trip. This amount was raised to 20,000 yuan in October 2005. Taiwanese have made more than 12 million visits to China over the past three years, other officials said.
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