Taiwan has the major advantage of having warm relations with the mainland in trying to become an international offshore trading hub for Chinese yuan, a finance expert said on Mar 9 in Taipei.
Peaceful ties between Taiwan and mainland are an advantage “no other place can replace” and with appropriate policies, “Taiwan's financial sector has bright prospects,” said Lu Hongjun, president of the Shanghai Institute of International Finance, after attending a forum held by National Taiwan University's (NTU's) Collegeof Management.
Many of the world's financial centers, including London, Singapore and Hong Kong, all want to be offshore hubs for the yuan, Lu said.
But Taiwan may be in the best position to provide the service if it adapts a broader vision and adopts smart policies. If, however, it fails to take advantage of its strengths, it will lose the opportunity, he said.
For Taiwan to become an offshore trading center for the yuan, it must still develop settlement, recycling and risk management mechanisms, Lu added.