Taiwan in Search of Yuan...

Filed in archive News on April 17, 2008

With its election cycle mostly behind it now, Taiwan is warming up to the Mainland. As part of that thaw in relationships, Taiwan is trying to attract Mainland tourist - along with their yuan renminbi.

When the new Kuomintang government assumes the mantle of power on May 20 from the outgoing Democratic Progressive Party, one of the first acts of the new government looks like it will deal with the yuan. Both Forbes and the China Post are reporting that Taiwan's parliament will remove restrictions on converting the yuan (the currency of the Mainland) into New Taiwan Dollars (NTD).

The change seems to be at least one thing that both political parties can agree on.







Taiwan currently hosts about a million tourists from Mainland China each year, and since 2004 they've been allowed to bring 20,000 yuan (about US$2,850 at the current exchange rate) with them into Taiwan and convert it into NTD.

The current plan is to allow banks and other financial institutions to begin changing yuan into NTD more freely in July. While it will be possible to turn yuan into NTD, it will not initially be be possible to convert NTD into yuan. Taiwan simply doesn't have enough yuan around to allow people to do that. Taiwan's Central Bank hopes that that will change not long after the new law comes into effect, as tourists from the Mainland beginning bringing more yuan with them.

The new Kuomintang government also hopes that Mainland China will increase the number of tourists from the Mainland that are allowed to visit Taiwan each year - and that the thaw in relationship will soon result in increased business and investment activity with the Mainland.