The Study For The Development, Issues And Measures Of Cross-strait Economic And Trade Relations

Economic and trade relations across the Taiwan Strait have undergone dramatic changes in2008 and this year is a historic turning point of the development of cross-strait economic and trade relations, because ARATS and SEF resumed negotiations after nearly 10 years'interruption. As of the end of June 2010, they have held five important talks and reached sixteen exchanges and cooperation in cross-strait economic and trade agreements. The development of cross-strait economic and trade relations entered a new period. At the same time, because of the affection of international financial crisis, the growth of trade across the Taiwan Strait has slowed down, Taiwanese investment on the mainland has reduced and Mainland Taiwan-funded enterprises are facing increasing difficulties to upgrade. However, economic globalization and market integration are the main trend. Under the promotion of rules of market economy and continent incentives of mainland, any obstacles and difficulties are temporary and the deepening of cross-strait trade and economic development is historically inevitable. Therefore, the study of cross-strait economic and trade relations have important theoretical and practical significance. From the theoretical sense, analyzing the complementary of cross-strait economic and trade and the contribution to economic development through the relevant data can provide a theoretical basis for future cross-strait cooperation. From the practical sense, studying policy changes of different periods, reviewing the history of cross-strait economic and trade relations and analyzing the issue of trade and investment can provide a useful reference of researching and guiding for the development of future cross-strait economic and trade.For this paper, by using qualitative analysis, inductive and deductive method, it elaborates the development of cross-strait economic and trade firstly. Cross-strait trade developed since 1979, it had experienced four different stages. In this process, although cross-strait trade experienced some ups and downs and the volume of trade declined in individual years, it generally displayed an upward trend and the annual average growth rate reached 38.3%. However, enacting different policies on cross-strait trade has different influences and the world economic environment also affects the development of cross-strait trade. The development of cross-strait investment is mainly due to the rapid increase in Taiwan-funded enterprises' investment on the mainland, but Taiwan investment by mainland China has just begun.Secondly, this paper discusses three aspects from the continued cooperation of the possibility of cross-strait trade, namely the existence of cross-strait economic complementarily, cross-strait economic and trade on their contribution to economic development and the easing of cross-strait political relations. In the aspect of resource endowment, Taiwan has a strong capital, advanced technology and higher levels of production and management, while the mainland has rich land resources, abundant labor force, low cost, and broad market, but lacks funds and technical management staff. In the aspect of industry, industrial categories in Taiwan are inadequate and have unpaired system, the economy of Taiwan excessively depend on the semiconductor,panel and a few other industries, but the mainland has more completed industrial categories. In terms of products, Taiwan has the advantage in high-tech products, especially on IC, IT products and their parts. The products are generally attributed to high and medium grade, high added-value, many categories, small quantities and short cycle; while the mainland has the advantage in the production of labor-intensive products. Its products are attributed to medium and low level, low added-value, few categories, large quantities and long cycle. Not only cross-strait economic and trade activities can promote Taiwan's economic growth, it can also promote its industrial restructuring and upgrading, it is same to the mainland. In addition, since Ma Yingjiu ruled Taiwan, he adapted "peace and common prosperity" attitude to the mainland and also developed political relations of the cross-strait economic and trade steadily.However, after three decades of development of the cross-strait economic and trade, it has gradually revealed some problems. In terms of trading, since it had begun, trade surplus are with the mainland in two years, namely 1978 and 1979. From 1980, by trading with Taiwan, mainland China has always been in a deficit state. Deficit increased from $0.16 billion and soared to $65.21 billion in 2009, the maximum period arrived at $77.56 billion. In terms of investment, Taiwanese investments on mainland China have made considerable progress, the annual amount of investment increase from $0,174 billion to $6.058 billion. However, mainland enterprises'investment on Taiwan have not carried out, projects and the amount are very little. Until June 30,2009 Taiwan's allowed mainland enterprises to invest on Taiwan. Therefore cross-strait investment showed one-way characteristic. The reason is that Taiwan's mainland policy is always restrictive. In addition, the cross-strait trade friction increases every year, restricted bilateral trade and economic cooperation are other problems that exposed from trade development.To solve problems mentioned above, the first step is to build institutionalized cross-strait negotiation mechanism, and the choice of topics should also be closely around the cross-strait economic, trade, livelihood, and so on and so forth. Then by using trade consultation mechanism, binding arbitration, settling disputes under the framework of the WTO to solve cross-strait trade friction. In the aspect of cooperation in agriculture, cross-strait agricultural cooperation should seek new models actively to promote cross-strait quarantine cooperation and improve the level of intra-industry trade of agricultural products, In terms of financial cooperation, promoting cross-strait financial integration gradually. Finally, it should promote cross-strait personnel exchanges freely in tourism, education and other aspects.This innovation of this paper is that it combines cross-strait policy to summary the development process of economic and trade and analyze the future trend of cross-strait political relations and integrate the influence of cross-strait economic by signing ECFA. The inadequacy of this paper is that choose the less industrial areas of cooperation and not comprehensive enough.