Wed, Feb 11, 2015 - Page 8 News List

Currency exchanges threatening sovereignty

By Wang To-far 王塗發

In last year’s nine-in-one local elections, Taiwanese voted against the China-friendly cross-strait policies that the President Ma Ying-jeou (馬英九) administration has pushed over the past six-and-a-half years.

Following the Chinese Nationalist Party’s (KMT) trouncing at the polls, a dejected Ma stepped down as KMT chairman and his Cabinet resigned en masse.

Having lost public support, the Ma administration will be no more than a caretaker government for the year-and-a-half that it has left in office. In view of this, it ought to rein in its pro-China policies and change tack.

However, the caretaker Cabinet is not just persisting with such policies, but prioritizing them.

Since Ma came into office in 2008, his government has promoted integration with China through a “one China common market.”

Cross-Straits Common Market Foundation chairman and former vice president Vincent Siew (蕭萬長) said the future common market will pursue further economic integration within the WTO framework and bring about full liberalization of cross-strait exchanges of goods, personnel, capital, services and information, and eventually go on to achieve complete harmony of economic policies and monetary union.

Reports published on Jan. 30 said that although the draft law on oversight of cross-strait negotiations remains stuck in the legislature, negotiations on the proposed cross-strait trade in goods agreement are moving ahead.

The service trade agreement, signed in June 2013, has not yet been approved by the legislature, which must happen before it can come into effect.

That has not stopped the Cross-Strait Economic Cooperation Committee, set up under the terms of the Economic Cooperation Framework Agreement, from discussing follow-up arrangements for the service trade agreement. In effect, the authorities have jumped the gun on both agreements.

The KMT’s defeat in the elections was largely due to the Ma administration’s efforts to push the service trade agreement through the legislature, prompting the rise of the student-led Sunflower movement. Yet even now it still wants to jump the gun on these agreements. Why is the lame-duck government in such a rush?

The President Chain Store Corp, which operates 7-Eleven convenience stores, recently announced that, since Sunday last week, three of its stores would provide currency exchange services between Chinese yuan and New Taiwan dollars.

The Taiwan Solidarity Union’s legislative caucus organized a news conference in protest, but the Democratic Progressive Party has said nothing and seems completely unaware of the implications.

The central bank, which is responsible for managing foreign exchange business, has not said anything either.

According to the Foreign Exchange Regulation Act (管理外匯條例), the authority in charge of foreign exchange business is the central bank, one of its duties being to authorize and supervise banks engaging in foreign exchange operations. President’s 7-Eleven stores are not banks, so having them provide currency exchange services clearly contravenes the terms of the Foreign Exchange Regulation Act.

Why, then, has there been no reaction from the central bank? Is it asleep or in a trance?

If big quantities of yuan start circulating in Taiwan, it is likely to have a big impact on Taiwan’s monetary sovereignty.

Are Taiwanese going to see Siew’s idea of “eventually” achieving complete harmony of economic policies and monetary union become a reality much sooner than even he foresaw?

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