Taiwan to weather Chinese reaction
Aug 3, 2022
Taiwan to weather Chinese reaction
‘NO NEED TO WORRY’: The central bank governor said foreign selling on the TAIEX is normal for this time of year and that the nation has ample forex reserves
By Crystal Hsu / Staff reporter
Taiwan would emerge unscathed from China’s retaliatory actions to protest US House of Representatives Speaker Nancy Pelosi’s visit to Taipei, top monetary and financial officials said yesterday. Central bank Governor Yang Chin-long (楊金龍) shrugged off unease over potential instability in the foreign exchange and stock markets after foreign portfolio funds trimmed their holdings of local shares for two straight days amid Beijing’s threats of retaliation. “There is no need to worry,” Yang said on the sidelines of an event to celebrate the first anniversary of the opening of Central American Bank for Economic Integration’s (CABEI) Taipei office and the 30th anniversary of Taiwan becoming a member of CABEI. From left, Deputy Minister of Finance Frank Juan, Minister of Finance Su Jain-rong, Central American Bank for Economic Integration (CABEI) Executive President Dante Mossi, Central bank Governor Yang Chin-long and Ministry of Foreign Affairs Secretary-General Lily Hsu yesterday gesture at a ceremony in Taipei marking the first anniversary of the opening of CABEI’s Taiwan office and the 30th anniversary of Taiwan becoming a member of the regional multilateral development financial institution. Photo: Chang Chia-ming, Taipei Times
Taiwan has sufficient foreign exchange reserves to rein in unexpected and abnormal developments, Yang said when asked to comment on the currency market. The New Taiwan dollar yesterday closed up 0.06 percent at NT$29.990 versus the US dollar in Taipei trading amid a normal trading volume of US$926 million. Yang said the recent selling of local shares by foreign institutional players was “typical” for this time of the year. Foreign portfolio managers tend to wire cash dividends abroad in August, putting depreciation pressure on the NT dollar. Minister of Finance Su Jain-rong (蘇建榮) said China’s ban on imports of citrus fruit and two types of fish from Taiwan would have a very limited effect on the nation’s overall export figures. China’s customs agency on Monday night imposed temporary import bans on more than 100 Taiwanese food brands, including I-Mei Foods Co (義美食品), Wei Chuan Foods Corp (味全食品) and Kuo Yuan Ye Foods Co (郭元益食品). China and Hong Kong accounted for 25 percent of processed food exports in the first six months of this year, down from 43 percent in previous years, as local suppliers expanded export markets, Su told reporters at the CABEI event. Processed food bound for the two markets amounted to US$240 million a year, or only 0.1 percent of total exports, Su said. Similarly, China’s suspension of natural sand exports to Taiwan would cause little inconvenience, as local construction projects rely mostly on domestically sourced sand, Su said, adding that most China-sourced sand is sea sand that cannot be used in construction projects. The American Chamber of Commerce in Taiwan said in a statement that it appreciated the extra support and interest from US officials in backing Taiwan. While official visits carry important symbolic meaning, the chamber’s 71-year history has demonstrated how the peaceful pursuit of commerce contributes to prosperity and innovation on a regional and global level, the chamber said. “We believe that further investment in the US-Taiwan economic relationship remains the best course to ensure the continuation of this progress,” it said. The US and Taiwan are uniquely equipped to tackle challenges and opportunities, from public health, semiconductors, digital, and supply chain resilience to the development of sustainable sources of energy and talent, it said. Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.