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Cross-Straits economic integration between China and Taiwan has

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Presentation on theme: "Cross-Straits economic integration between China and Taiwan has"— Presentation transcript:

1 Cross-Straits economic integration between China and Taiwan has
TRADING ACROSS THE STRAITS Will a free trade agreement between China and Taiwan promote peace? Cross-Straits economic integration between China and Taiwan has increased since 1987 Despite political tension between the 2 countries, economic integration will continue because of: 1. Rapid economic development in China 2. Location and close intersection of China and Taiwan economies in the regional production networking 3. Taiwan’s economy maturing and its increasing dependence on China’s growth 4. China’s policy to stimulate economic integration 5. Loopholes for Taiwanese firms

2 TRADING ACROSS THE STRAITS Will a free trade agreement between China and Taiwan promote peace?
“Status quo” of Taiwan’s uncertain legal status will remain in the short to medium term China is keen to promote closer economic ties through market forces or official channels; provided that Taiwan is considered as a customs territory, not as a sovereign entity Taiwan government, however, is not interested for economic cooperation through FTA based on the CEPA (Closer Economic Partnership Agreement between China, Hong Kong and Macau) framework as a possible bilateral FTA The peaceful relationship between China and Taiwan must be seen in the larger geo-political context of Sino-Japan and Sino-US relations

3 TRADING ACROSS THE STRAITS Will a free trade agreement between China and Taiwan promote peace?
** If the US can prevent Taiwan from declaring independence, then China will not take military action ** Therefore, neither close economic linkages or an FTA can truly resolve the cross-Straits tension between China and Taiwan Conclusion: Peace across the Straits requires stable political relations between China and the US and sustainable rapid economic development in China An FTA between China and Taiwan would constitute a major positive development , but is politically not feasible in the short and medium term


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