Taipei - Taiwan on Monday allowed its banks to trade in renminbi, the Chinese currency, to prepare for the arrival of Chinese tourists and to assist cross-strait trade. Starting Monday, the central bank allowed 13 banks and their 1,500 branches to buy and sell renminbi and permitted 50 airport duty-free shops, hotels and tourist resorts to accept renminbi from Chinese tourists.
As Taiwan has not yet signed a currency-clearance pact with China, Taiwan's central bank has purchased 500 million renminbi (70 million US dollars) from the Hong Kong Shanghai Banking Corp and Bank of America.
When Taiwanese buy renminbi or Chinese tourists exchange renminbi for Taiwan dollars, each transaction is limited to 20,000 renminbi (2,870 US dollars), but there is no limit on the number of transactions.
Transactions in renminbi had a good start Monday as many China- bound Taiwan tourists and business people queued up to exchange the Taiwan dollar into renminbi at Taiwan's largest airport, Taoyuan International Airport near Taipei.
Chen Yuan-fa, a clerk at a money exchange at Taoyuan airport, said that dozens of outbound Taiwan travelers had exchanged the Taiwan dollar into renminbi within two hours of the counter opening at 5:30 am.
"The reaction is enthusiastic because it saves them the trouble of exchanging the Taiwan dollar into the US dollar and after having arrived in China, exchanging the US dollar into renminbi," he said by telephone.
Taiwan has been mulling lifting the ban on renminbi transaction for several years due to growing indirect trade across and people-to- people contacts across the Taiwan Strait.
In 2007, Taiwan-China trade reached 124.5 billion US dollars, up 15.4 per cent from 2006, and accumulated Taiwanese investment in China hit 45.8 billion US dollars, according to China's statistics.
Taiwan has allowed Taiwanese to visit China for family reunions, sightseeing and trade since 1987, and recently an average of 4 million people from Taiwan have been visiting China annually.
Tens of thousands of Chinese have entered Taiwan for exchange programmes or for sightseeing, though the sightseeing trips, made as part of their overseas sightseeing trips, were not approved by China.
Starting on July 4, Chinese tourists will descend on Taiwan in large numbers, when Taiwan lifts the ban on Chinese tour groups and Taiwan and China launch weekend charter flights.
President Ma Ying-jeou, who won the March 22 election on a platform of seeking peace with China, hopes the weekend charter flights will be expanded to daily charter flights and eventually to regular flights across the Taiwan Strait.
