Probe Into Economic Competitiveness Comparison And Integration Effect Of The Chinese Mainland Coastal Regions And Taiwan

Since the end of 1970s, economic exchanges and cooperation between Chinese mainland and Taiwan have entered a brand new stage. Today, after more than 20 years of close cross-strait economic cooperation, an inseparable community of interests has been formed between the two sides, which has greatly contributed to the economic developments of both sides. The current study, drawing on theoretical methodologies in regional economics, western economics, institutional economics, economic competition theory, international economics, comparative economics, statistics and econometrics, makes a comparative assessment of economic competitiveness among the three major economic regions (namely the eastern, the northern and the southern coast) on the mainland and Taiwan on the basis of the establishment an evaluation system of regional economic competitiveness. It then, based on case studies, makes empirical analysis of the relations between the economic growth of the mainland and Taiwan and cross-strait economic cooperation, and makes predictions and comparative studies of the economic development trends in 2010 of the mainland, the three coastal economic regions on the mainland, the four provinces (namely Guangdong, Jiangsu, zhejiang and Shangdong province) and Taiwan. It finally makes initial judgement of future directions of cross-strait economic integration. The current study demonstrates its originality in the two ways: First, it sets its research object on economic regions, which is quite different from previous studies. Second, it adopts the research methods which are new in this field, i.e. it makes a more objective research of the cross-strait economic competitiveness and mutual economic integration by establishing an evaluation system of economic competitiveness, making cointegration analysis and using macroeconomic projections measurement methods.The current study has drawn the following six main conclusions:1. A comparative study of economic competitiveness of Taiwan and the three coastal regions on the mainland in 2004 shows that Taiwan has the strongest economic competitiveness, followed immediately by the eastern coastal region and the northern coastal region. The southern coastal region is the least competitive among the four.2. Itemized comparison shows that Taiwan has the strongest economicdevelopment potential, but the development strength is not so strong. The eastern coastal region on the mainland has the strongest economic development strength, but its development potential is behind those of the northern coastal region and Taiwan, and it ranks the third. The economic development strength of northern coastal region ranks the second, and its economic development potential is just after Taiwan. Both the development of strength and the development of potential of southern coastal region rank the fourth.3. As for the speed and scale of economic development, the three coastal regions on the mainland display stronger competitiveness than Taiwan, but their per capita level and the intensification of economic growth are generally lagged behind Taiwan. Taiwan has the best soft environment for economic development, and is advantageous in its infrastructure, institution-building, human capital, research and development strength, and even the quality of the people, but its potential has been suppressed. Therefore, its best environment can not effectively serve its economic development.4. There are strong positive cointegration relationships between 1) cross-strait trade and Taiwanese investment in the mainland, and 2) overall economic growth and upgrading of the economic structures of Taiwan and the mainland, both of which shows the trends of consistent economic growth. The existence of these trends in cross-strait economic integration has developed a healthy and stable development path. Compared to the mainland, Taiwan benefits more from the impact of the cross-strait economic cooperation on the economic growth and the industrial structure of both sides.5. In the near future, economies of both sides will continue to show some uneven trends. It is expected that by 2010, the mainland's economic scale will be expanded to eight times as much as the GDP of Taiwan, and that the GDP of Taiwan will be less than 1/2 of that of the eastern and the northern coastal regions and also less than the total economy of the southern coastal region by 800~2000 billion dollars. The four provinces, Guangdong, Jiangsu, Zhejiang and Shandong Province, will catch up with or surpass Taiwan's economy scale in 2011, 2012, 2014 and 2009 respectively, with the GDP gap per capita to Taiwan narrowed from the present level of about 3/4~4/5 to 3/5~2/3 in 2010.6. The future development trends of cross-strait economic cooperation will be shown in the following aspects: 1) the transition from indirect, one-way and one-sidedcooperation to direct, two-way and whole-sided cooperation, 2) the cooperation transformation from production areas to service areas, 3) the cooperation levels from production technology to the industrial science, 4) the main cooperation parts changing from small or medium-sized enterprises to larger enterprises, 5) regional cooperation expanding from the south to the north, from the coastal regions to the inland, and 6) the mechanisms of cooperation gradually moving from the loose and local contacts toward close and comprehensive integration arrangements. Only after Taiwan and the mainland have established a closer economic partnership can economic growth be guaranteed. Cross-strait economic integration will be effective in promoting and maintaining cross-strait stability and prosperity, and ultimately lay a solid economic foundation to the great cause of peaceful reunification of the two sides.