Shanghai Wants Free Exchange of Renminbi with New Taiwan Dollar

SHANGHAI, Oct. 28 – Shanghai’s Financial Service Office is pushing for a free exchange between the renminbi and the New Taiwan dollar to improve the city’s financial ties with Taiwan.

The city already opened a cross-border currency clearing system and authorities expect the system to eventually include the Taiwanese currency due to burgeoning trade between the two that amounted to US$13.68 billion during the first eight months of the year.

Taiwan invested an estimated US$5 billion spread out in more than 6,000 projects in Shanghai as of April this year reports Shanghai Daily. A developed Shanghai/Taiwan financial system has opportunities for innovative products like exchange-traded funds.

“The Shanghai Stock Exchange is making efforts to introduce ETFs based on overseas equity indices (and) we can also expect Taiwan and the mainland to introduce ETFs based on each other’s index,” Fang Xinghai, the head of the Shanghai Financial Service Office told Shanghai Daily.

“Taiwan is very successful in the venture capital sector, while the Chinese mainland is still in the first stage. Policies have now been eased so that Taiwan VC firms can set up branches on the mainland,” Fang added.

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