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TheStreet Open House

China's Yuan Trade Expands Offshore

Almost every year the American or European (or both) chamber of commerce in Taiwan puts out a white paper complaining of uneven playing fields. Earlier in the month I asked a group of Taiwan-based foreigners with occasional business in China what they thought about the yuan deal. They shrugged. They already had the conversion thing worked out some other way.

There's the odd exception such as Volkswagen (VLKAY). Taiwan's semi-official news service said this month the German automaker would open a plant in Taiwan by 2015 to assemble 50,000 cars per year. VW already makes cars in China and is expected to have sold 2.81 million units in the same market, so it's easy to imagine a few currency exchanges between there and Taiwan.

American IT giants such as Microsoft (MSFT - Get Report), which has R&D centers in both China and Taiwan with plans to add 1,500 employees in China, also stand to save time and expense on yuan settlements.

But for the most part, The Taiwan-China currency deal helps Taiwanese businesses. Major firms such as Taiwan Semiconductor (TSM - Get Report) and Hon Hai (HNHPF) -- the ones with China factories -- will be able to do transactions in renminbi on either side of the Taiwan strait.

It's obvious why. A total of 46 foreign exchange institutions in Taiwan opened yuan business this month after signing currency clearing agreements with the Bank of China's Taipei branch. Taiwanese can now open yuan accounts at those banks, with more renminbi products on the way, news reports from China say.

I still don't see too many foreign business people lining up in Taipei for banknotes bearing Mao Zedong.

At the time of publication the author had no position in any of the stocks mentioned.

Ralph Jennings is on LinkedIn.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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