Taiwan eases economic restrictions on China

June 26th, 2008 - 4:05 pm ICT by IANS  

Taipei, June 26 (DPA) Taiwan eased restrictions on economic ties with China Thursday to prepare for the arrival of Chinese tourists and for easing tension with the mainland. Starting from the afternoon of June 30, Taiwan banks will be allowed to handle the transaction of the Chinese currency renminbi, the central bank said, with each transaction limited to 20,000 renminbi ($2,941), Lin Sun-yuan, deputy head of the central bank’s foreign currency bureau, said.

“This is for the convenience of Chinese tourists who will start arriving July 4, and to prevent the circulation of renminbi on the black market,” he told a news conference.

The central bank has held 50 meetings for bank clerks to teach them how to distinguish fake renminbi banknotes, and has purchased 1,358 machines to check the authenticity of renminbi banknotes.

However, the central bank hopes to sign a currency settlement pact with China so that China can provide renminbi banknotes to Taiwan banks. Currently Taiwan central bank’s renminbi banknotes are supplied by Hong Kong and US banks.

Also on Thursday, Taiwan’s cabinet announced a package of measures to ease restrictions on Taiwan-China economic activities.

They include allowing Taiwan’s Exchange Traded Funds (ETF) trading on the Hong Kong stock market and vice versa, and allowing Taiwan security firms and fund management companies to indirectly invest in China’s security firms and fund management companies.

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