ECONOMIC

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600200477-2
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: June 29, 2011
• Sequence Number: 477
• Publication Date: December 15, 1948
• Content Type: REPORT

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SUPPLEMENT TO
THIS ,S l1NLVALUA'FFD INFORMATION) FOR TH= Rf: FG,7C!!.
300RC[ IDENTIFICATION 71~,. Funs Pao (L'Imrrti , No 16165, 1948. (Informa'sion requea ,1 ? )
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Sanitized Copy Approved for Release 2011/00r6/29: CIA-RDP80-00809A000600200477-2
At c: reoon'; session of the 4meoutivo Il;tea to disouca "soother" eoonnmic
reform, the first decision made was to adJaet the exchange rate of Taiwan
ourrernoy utth the gold yuan from 1,935 Taiwan yumn per bold yuan to 1,000
to sae. This action gives evidence cf both the decline in value of the
gold yuan and also of the emphasis being plan' no Ts.iiian by the National
Govern ant. Taiwan incurred great hardah.Sp from the ioctability of the refo:-m.
measures of 19 August, despite the fact that she was far removed from the
internal military and economic factors wh+ob caused the instability. In the
70 days of reform, T-0v a ourx~rasy in oiscuiation increased by 150 percent,
thus :rndeirmin?_n{j its vulne.
Recovery v".11 not b3 easy baaauee e!' the difficulty of decreasing the
amount of currency in o.trculatioa and rolling prises back to their :oruer
levels. A start has been made, 1=ow'ver, by ai5untment of the a chai..go rate
and action by the provincial government to eatrLoticg remittances from out-
side the province. It may be seen that Taiwan is traveling n spacial road
and that both the people rand the'.r govarnmcn, are deunod"ng independence in
economic decisions an a means of solving present and f,rture problems.
In this respect, the recout speech. b,7:ii Wang{-1o (Wu Chien-tuna) iC
Taiholni (11'ai-poi), in which he ompb:reiaod the importance of aelonal.
economics and 11souseed their development in China from hiscorieal,
googrephio, economic and. iora:ei;io poimta of view, -me very timely and has
been very well ;eoeivcd i.r 'MO iveun.
In addition to the exchangej rate qu9ettaa, Taiwan euthuiitler have also
directed 'other proposals to the Central Government:
1. That Thivan currency be put on the gold standard, and r-,hc Bank
of Taiwan be permitted ?.e retain converted gold, etlver, and foreign csur,mcy
as a monetary reserve.
2. That permission be granted for Tartan currency to br ezchuoged
directly with foreign cirrancy and that it, ao l_crgsr b-) psa3sd to the
gold Yuan.
CLASSIFICATION RFs3TRIAT fl
arc nnln Vi+sae _ DIStR18U11oN -
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STAT
Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200477-2
 Sanitized Copy Approved for Release 2011/06/29: CIA-RDP80-00809A000600200477-2
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STAT
RE' 1' D
7. That ;dlse Ch.aeee m7)5t,sl now is 2'n.+-r,.n T;?rxr, ^on:in?rntal Chino in
11 the amount of.? JC blllS