Economic Relations Between Taiwan and China

Economic Relations Between Taiwan and China

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Taiwan and China are separated more than forty years, until November 1987 the government opened the country to visit relatives in mainland China, cross-strait economic and trade exchanges gradually opened. Prior to this, having established the indirect cross-strait trade exchanges prototype, however, since we had contacted with the initial exploratory phase is still limited in scope. In 1979, the beginning of the cross-strait economic and trade relations started from "A Message to Compatriots in Taiwan " proposed the two sides should commence immediately “Three Links”. As a response, Taiwan relax the restrictions on re- entry products, re-exports from China and Hong Kong , 1987 further open 27 mainland indirect import of agricultural and industrial raw materials.
In 1988, Taiwan to the mainland's total trade surplus proportion increase from 5.0% to 16.0%, three times more than in 1987. The government enacted "Act Governing Relations between the People of the Taiwan Area and the Mainland Area " in 1992, so the cross-strait economic and trade exchanges are becoming more closer. Taiwan's trade dependence on China gradually climbed since 1993, cross-strait trade volume exceeded 1.5 billion U.S. dollars, accounting for Taiwan to the mainland's total trade surplus proportion accounts for more than 100% from now on. In other words, if the deduction Taiwan to the mainland part of the surplus, the overall trade deficit is the situation presents. But after 1995, due to the government's "no haste, be patient " policy and the impact of the Asian financial crisis, the annual growth rate of total trade show slowing phenomenon, in 1998 the case of the emergence of negative growth. In 1999, owing to the change of the international environment ( the trend of free trade ) and the impact of the new government came to power, and the cross-strait economic and trade relationships become active again, cross-strait trade volume in 2000 alone nearly 26% annual growth.
WTO Ministerial Conference in Qatar , has identified China on December 11, 2001 membership, and Taiwan on January 1, 2002 membership , between the two sides is bound to face the contracting parties must comply with the MFN, national treatment, reciprocity, market access and fair competition, and other basic norms in WTO. Recently, the Government consider the trend of international environment and decided to adopt "Proactive Liberalization with Effective Management" instead of " no haste, be patient " policy, Taiwan’s investment in China will open sharply, while the import barriers will decline every year.

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According to the Bureau of Foreign Trade statistics, from 1987 to 2000 s cross-strait indirect trade accumulated nearly $ 220 billion. In 2000, Taiwan's total trade with the mainland of China amount more than 32 billion U.S. dollars, while Taiwan’s investment in China until the end of September 2000, has more than 46.5 billion U.S. dollars, accounting for a third place ranking foreign investment in China , after Hong Kong and the United States.
Further improve cross-strait trade interdependence, especially for Taiwan's trade dependence on China continues to increase. In 2003, on China, Hong Kong, Taiwan's exports accounted for the proportion of total exports rose from 32% last year to 34.5%, an increase of 2.5 percentage points, over the Taiwan-US trade volume.
Observed time series of data since the 1987 opening of the mainland , Taiwan's trade dependence on China increased year by year , China seems to have become one of the most important trading countries.
In addition, trade between Taiwan and the mainland has been challenged from South Korea, the European Union and other states. Either Taiwan or China statistical statistics, Taiwan's exports to the mainland's growth rate is much lower than South Korea, Japan and Europe Continental population growth rate. Currently, Taiwan's products in China still have a high market share, but the status is being challenged by South Korea 's .

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