Study on the Signing of the MOU on Cross-Strait Currency Settlement Cooperation
Date Issued
2015
Date
2015
Author(s)
Hsieh, Yu-Ju
Abstract
After several negotiations, Cross-Strait finally signed ""the MOU on Cross-Strait Currency Settlement Cooperation"" in August 31, 2012. Cross-Strait currency cooperation reaped first fruits, but it also brought many problems due to the interference of political factors and the recent instability of the international monetary situation. Through textual analysis and interviews, we could find that in the more than twenty negotiated text of Cross-Strait, a total of four signed by the ""Official to Official"" which all named ""Memorandum"", and it was different from the ""Agreement"" signed by SEF-ARATS. This was not no doubt about the legislative style. Secondly, in the last paragraph of the text signed by the official of Cross-Strait did not use the word ""The Central Bank representative"" nor ""The People''s Bank representative"", but vaguely used ""The Monetary Authorities of Taiwan"" and"" The Monetary Authorities of Mainland China"" to call each other. It varied from the government of Taiwan so-called ""Do Not Deny Each Other"" and ""Peer Negotiation"". Then, in the aspect of the text’s commencement, the government of Mainland China did not comply with the agreement in the memorandum, and the date of the formal operation of currency settlement mechanism had delayed six months due to its settlement bank’s selection. It was apparent that Mainland China had a high degree of dominance in the currency cooperation between Cross-Strait, and Taiwan had always been passive. This kind of situation differed from the government of Taiwan so-called ""Pragmatic and Equality"". Finally, in the aspect of the influence after signing the text, the Central Bank, regardless of the market mechanism, lowered the RMB deposit rates in the territory of Taiwan before the settlement mechanism’s formal operation. But when RMB business began after a year, the Central Bank was changed to say that to meet the international markets, it would urge the industry to raise interest rates. How to make people trust this inconsistent intervention is questionable. In addition to the Central Bank''s monetary policy, the currency cooperation of Cross-Strait also had influence on Taiwan’s industry which invested in Mainland China, RMB depositors and the businesses in tourist regions. Comparing to the other issues of Cross-Strait cooperation, the impact of the Cross-strait’s currency cooperation was the most far-reaching, and Taiwan’s government should carefully respond to NTD and RMB-related effects.
Subjects
the MOU on Cross-Strait Currency Settlement Cooperation
Textual Analysis
Quantitative Easing
Currency Swap Agreement
Legislative Style
Type
thesis
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