The Research On The Trade Effect Of Direct Navigation Between Mainland And Taiwan

There were great advances of Taiwan-China cross-straits economic and trade relations in 2008. The Taiwan-China Cross-Straits Economic Pact was signed by China's Association for Relations Across the Taiwan Straits (ARATS) and Taiwan' Straits Exchange Foundation (SEF). The pact allows direct passenger flights, postal services and shipping across the Taiwan Strait that separates Taiwan from mainland China. Cargo ships are allowed to reach directly to the other side and cut hundreds of miles out of each trip, reduce time and transport costs.In available studies of trade, it is fairly a small fraction that studies the cross-strait trade, and most of them are based on qualitative and unsystematic analysis. Therefore, it has theoretical value and realistic meaning to deeply analyze the current situation and developing potential of cross-strait trade and its impact from direct flight, by means of a method combing qualitative and quantitative analysis.This paper reviews the related research development on cross-strait trade both home and abroad, briefly analyzes the developing history, current state, and characteristics of cross-strait trade, then selectes the Global Trade Analysis Project (GTAP) model to simulate its impact from direct flight. The conclusions which based on the results, show that direct navigation will bring great effects to the members in many fields, such as GDP, welfare level, and the scale of import &export and etc., will be improved.