PDF(2.7mb) - 國家政策研究基金會

Strategies for Cross-Strait Financial Exchange and Cooperation under Financial Tsunami 195
Strategies for Cross-Strait Financial Exchange and
Cooperation under Financial Tsunami
HSU, Chen-min
Abstract
For China and Taiwan, the current international financial turmoil resulting from the
U.S. subprime crisis and the unprecedented financial tsunami not only has shattered the
solid foundation of economic development and financial markets, but has also withered the
growth of foreign trade and overseas investments. To cope with the severe challenges ahead,
China, Hong Kong, and Taiwan will have to establish a joint effort to strengthen their financial
cooperation. First of all, as the exchange rate of the U.S. dollar to the New Taiwan
dollar (NTD) has continuously appreciated since the global financial crisis began, the MTD
and the renminbi (RMB) should be authorized to substitute the greenback in trade and direct
investment between the two sides of the Taiwan Strait order to reduce exchange risks
and facilitate the expansion of their financial markets.
Furthermore, banks should be allowed to accept MTD and RMB deposits and handle
direct remittances between China and Taiwan to expand their operational scale. Banks
should also be permitted to establish representative offices or branches in each other’s territory
to elevate customer services. In addition, inter-bank RMB and NTD call-loan markets
in China and Taiwan should be permitted to improve the liquidity in the currency
markets and thus decrease associated carrying costs. A memorandum of understanding
(MOU) must be signed on the cross-strait financial supervision, while a cross-strait monetary
settlement system has to be established. Beijing shall allow financial institutions in
Taiwan to enjoy the preferential market access treatment in terms of the establishments of
subsidiaries and bank branches. Taiwan and China should actively employ top financial
experts from Hong Kong and provide attractive tax incentives.