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KMT honorary chair pushes for cross-strait currency settlement pact

2012/06/29 19:12:12

Taipei, June 29 (CNA) Honorary Chairman Lien Chen of the ruling Kuomintang (KMT) on Friday expressed the hope that both sides of the Taiwan Strait signed a currency settlement agreement in the near future.

"I hope very much that both sides sign the pact, which will help promote cross-Taiwan Strait trade and investment, as well as boost financial exchanges. This will be significant to economic stability," he said.

China has in recent years actively promoted the globalization of its currency, the yuan, and has signed pacts on currency exchange with other countries, he noted.

Taiwan should also promote financial operations with distinctive cross-strait features, Lien said at the opening of a trade and economic forum, which was sponsored by the Economic Daily News, a local newspaper.

Asked about cross-strait talks on a currency settlement mechanism, An Min, vice president of China's Association for Relations Across the Taiwan Straits who also attended the forum, said that "everything should go faster, but the goal has to be reached step by step."

Also present was Li Lihui, president of Bank of China, who said that the bank's establishment of a branch in Taiwan was mainly to serve clients on both sides of the Taiwan Strait.

Li also said that there is no plan for the bank, which became the first Chinese bank to establish a branch in Taiwan on June 22, to acquire Taiwan-funded banks for the moment.

Niu Ximin, president of China's Bank of Communications, echoed Li's comment, saying that if the bank sets up a branch in Taiwan, it will be mainly to provide financial services to businesses on both sides of the Taiwan Strait.

Niu said that to provide services is the main strategy of the bank, and that it is not interested in doing retail banking business.

He also said that it is inevitable for the yuan to go global.

He noted that Hong Kong's development as an offshore yuan center and card transactions by mainland Chinese tourists have continued to increase.

Whether bank cards can be used to directly convert yuan into Taiwan dollars is an issue that should be given consideration, Niu said.

He said that China's trade with Hong Kong in 2011 totaled US$280 billion, while Taiwan-China trade amounted to US$160 billion.

In addition, yuan deposits in the offshore center totaled 250 billion yuan last year, and while total cross-border yuan trade settlements between Hong Kong and China reached 2 trillion yuan, such settlements in Taiwan were almost zero, he said.

"It is therefore necessary for both sides to establish a currency settlement mechanism," Niu said, adding that a long-stalled cross-strait investment protection agreement should also be sped up.

(By Kao Chao-fen and Lilian Wu)