Taiwan and china trade relationship

Cross-Strait Economic Relations: Recent Development and Implications for Taiwan

taiwan and china trade relationship

The trading relationship between Taiwan and the United States: Current trends . The share of Taiwan's total exports going to China (including Hong Kong) rose . Despite intermittent friction, the cross-strait economic relationship has blossomed . China entered the World Trade. China is Taiwan's largest trade partner, absorbing nearly 30% of Taiwan's leader nevertheless deepened the economic ties between the two.

However, China will not replace Japan as the main supplier of key component to Taiwan as Japan still holds more advanced technology.

taiwan and china trade relationship

Thus, while China is becoming a significant export destination for Taiwan, the small island has not yet been and will be less likely to become an interesting market for China. First, in recent years, the Mainland-based Taiwanese companies have shifted their preference for purchasing intermediate goods from China instead of importing from Taiwan. The shares of local procurement in China were especially high in traditional industries, such as food and chemical products.

Cross-Strait relations

Second, the under-performance of Taiwanese companies in China subsequent to the rising labor cost in recent years also led to a reduction in their import of intermediate goods from Taiwan. In the mean time, its demand for raw materials and natural resources eg, from resource rich Southeast Asian countries may continue to expand. Moreover, as mentioned previously, China is less dependent on trading with Taiwan.

If there is any disagreement between Taiwan and China, China can switch its import sources from Taiwan to Japan and South Korea, which have similar export items as Taiwan. On the contrary, Taiwan will be unable to find a substitute for its exports immediately. China includes Hong Kong. The aim is to progressively reduce the tariffs of these items to zero by In spite of the progress in cross-strait economic negotiations, the political debate on ECFA continued in Taiwan. Some opine that an assessment of the effects of ECFA may be premature due to the relatively insignificant share of early harvest products in total trade.

Cross-Strait relations - Wikipedia

In fact, the political implication so far is more significant than its economic impact. China regards ECFA as a stepping stone toward reunification. The institutionalized economic relations is not to be seen as a move to further encourage cross-strait economic relationship, but rather, a passive reaction of the Taiwanese government towards its inevitable strengthening relationship with China. Economic agreements with Israel, Indonesia, the Philippines, Malaysia and India are also under feasibility study.

  • Timeline: Taiwan-China relations since 1949

Nonetheless, compared to other East Asian countries, Taiwan lags behind in negotiating FTA with both individual economies and the economic blocs. Meanwhile, the new Chinese leadership is unlikely to alter the current harmonious relation with Taiwan, the best they have had since Further advancement in cross-strait economic relations can be expected from the following aspects.

First, Taiwan will accelerate its follow-up talks in ECFA, including trade in goods and services so as to counterbalance the impact of rapid regional economic integration.

As a result, cross-strait economic integration will become a comprehensive quasi-FTA that includes free movement between the people, goods and financial capital in the foreseeable future.

taiwan and china trade relationship

The first direct talks between the two sides are held in Singapore two years later. InChina tests missiles off Taiwan to deter voters in the island's first democratic presidential election.

Joseph Wu - Taiwan is a model of democracy In MarchBeijing adopts a law which makes secession by Taiwan illegal at the risk of military action. Inthey sign a sweeping Economic Cooperation Framework Agreement; inthey hold the first government-to-government talks since separation.

Inthe leaders of both sides meet in Singaporeshaking hands and waving enthusiastically to a huge press throng but refraining from any joint statement. Tsai Ing-wen at her inauguration ceremony in Taipei on May 20, In her victory speech, Tsai said the results showed that democracy is ingrained in the Taiwanese people and that she will strive to maintain stability with China. The day of her inauguration in May, China cautions that peace would be "impossible" if she makes any moves to formally break away.

In June, China suspends all communications with Taiwan after the island's new government fails to acknowledge the concept that there is only "one China".