Taiwan could be yuan offshore center: expert
The China Post news staff
November 20, 2012, 2:35 pm TWN
Taiwan has the potential to become the next offshore renminbi market due to its strong economic and trade ties formed with China, said a financial expert recently.
During a recent forum, Tony Phoo, economist of Standard Chartered Bank, said trade volume between China and Taiwan exceeded US$127 billion in 2011, making China the biggest trade partner of Taiwan as well as largest source of trade surplus.
"China, meanwhile, is the most preferred overseas investment destination for the Taiwanese," Phoo said, adding an estimated 50,000 to 100,000 Taiwan enterprises currently operate on the other side of the Strait.
At the same time, mainland Chinese visitors reached a record 1.78 million in 2011, overtaking Japan as the biggest source of tourist arrivals, Phoo said.
"Increasing trade and investment opportunity will be made possible by the recent signing of the bilateral Economic Cooperation and Framework Agreement, an expansion of tourism flow, as well as decisions to allow mainland Chinese to invest in public sector infrastructure projects," Phoo said. "Moreover, the recent signing of an investment protection agreement is expected to lift inbound foreign direct investment from mainland China from US$43 million in 2011 to approximately US$400 million in 2012."
He added: "Unrestricted offshore access to renminbi trading, hedging and financing, reduced forex hedging costs for inward and outward investment, as well as a number of other factors give Taiwan the potential to become the next offshore renminbi market after Hong Kong, Singapore and London."