Fri, Dec 05, 2014 - Page 13 News List

Renegotiation of RQFII quota to be shelved: FSC

TANGLED WEB:As the quota is conflated with a trade deal, it has been removed from the agenda of a cross-strait meeting of regulators in Beijing

Bloomberg

A program that would allow Taiwan to invest yuan in China is unlikely to be disentangled from a trade deal and the issue would be left out of talks set for later this month, the Financial Supervisory Commission said yesterday.

Separating the two “looks unlikely, so we’re not going to talk about it,” commission Chairman William Tseng (曾銘宗) said by telephone.

China allowed Taiwanese investors to repatriate yuan to the nation’s onshore markets as part of a broader services trade agreement signed in June last year.

Tseng also said the Renminbi Qualified Foreign Institutional Investor (RQFII) program would not be on the agenda of a Dec. 24 to Dec. 27 cross-strait meeting of financial regulators in Beijing.

The commission had planned to renegotiate the RQFII quota with Chinese regulators after the cross-strait service trade agreement was stalled by student protests that shut down the legislature for 24 days in March. The demonstrators said the Chinese Nationalist Party (KMT) circumvented a line-by-line review of the pact’s provisions.

Taiwan’s potential RQFII quota — which Chinese officials said might be 100 billion yuan (US$16.3 billion), the largest outside Hong Kong — would give its investors more options to use their 301 billion yuan of Chinese-currency savings.

China has offered a total of 770 billion yuan in RQFII quotas globally, including 50 billion yuan allocated to Australia last month.

Legislative Speaker Wang Jin-pyng (王金平) pledged in April to halt the debate on the services deal until new oversight rules are passed, prompting the demonstrators to end their occupation. The new law is still under review.

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