Renminbi Globalization: A Taiwan Perspective

Abstract

As China’s currency, the renminbi (RMB) has gained increasing attention subsequent to the remarkable expansion and coverage of a Pilot Program of RMB Settlement of Cross-Border Trade Transactions (the “Pilot Program” henceforth). Investors and policymakers around the world seem to have taken RMB as the next currency with most potential of going global. Based upon the evidence of intensive and unique trade links between China and Taiwan, this chapter explores the implications for cross-strait financial cooperation from both perspectives of Taiwan and China. It is argued that Taiwan would be as good as Hong Kong an option to become an offshore RMB center for advancing RMB as a global currency. The analysis also sheds light on the implications of the offshore RMB market that Taiwan can unequivocally complement Hong Kong as another offshore RMB center based upon her substantial trade links with China.