| The study attempts to explore and examine the recently growing trade between Taiwan and the People's Republic of China from 1984 to 1993. A framework of regional analysis is applied to capture the complex reality of trade within a divided country. The major goal is to explain the rise of their trade and its relationships with spatial, economic, and political elements. The multiplicity of research questions in the case is addressed applying quantitative and qualitative methods.; The findings of this case study are as the following. First, some political rapprochement is necessary for trade to occur across the Taiwan Strait according to historical analysis. Second, the growth of the Taiwan-PRC trade parallels the shifting geographical orientation of the PRC's external trade applying the cartographical approach. Third, the modeling results of Taiwan's and the PRC's trade patterns based on original and expansion spatial interaction models conclude that physical proximity can not explain their trade. Fourth, the variations of their trade commodity concentration, measured by the Gini concentration model, are related with policy changes, but not levels of economic development. Fifth, based on the United Nations' sectoral classification, their trade structure is complementary until after 1990 when growing intra-industry trade makes it more homogeneous. Sixth, by graphical overlaying their trade interdependence with political relations, the globalist perspective can not explain the juxtaposition of escalating trade interdependence and political tensions.; Furthermore, the study identifies key determinants unaddressed by modern trade theory and recognizes a need to develop a more realistic spatial interaction model on the trade within a divided country sharing common cultural characteristics and confronting political uncertainty. To tackle trade as complex interaction in this case, the study, by analyzing elite perceptions, identifies economic overlapping interests and the source of tensions in their trading relations. The territorial issue, reflected in their conflicting views on the spatial definition of China, can be both constructive and destructive when speculating about their trade prospects. |
