Analysis On Guidance Mechanism And Effect Of Regional Agglomeration From Taiwanese FDI In Chinese Mainland

In the early 1980s, driven by cross-strait trade, Taiwanese investment in Chinese mainland entered into a trial phase. After 20 years' development, cross-strait relationship has gradually got stable and Taiwanese FDI in Chinese mainland tends to be normal and agglomerative. In recent years, the mainland's role as receiver of Taiwanese FDI has been strengthened, and also got more and more important in Taiwan's industrial outward transfer as well as structure transformation. Therefore, research on Guidance Mechanism and Effect of Regional Agglomeration from Taiwanese FDI in Chinese Mainland has a profound theoretical meaning and urgency of practical actions.Regional agglomeration from Taiwanese FDI in Chinese mainland is based on profound theories, namely direct investment theory and the theory of regional agglomeration, both of which supplement each other and compose a complete theoretical basis. On one hand, the eclectic theory of international production, the investment theory based on comparative advantage and monopolistic advantage can explain the drive for Taiwanese FDI in Chinese mainland; On the other hand, four theories of regional agglomeration illustrate the gather of Taiwan-funded enterprises, including the enterprises' regional position theory, market location theory, territorial production complex theory as well as the theory of new industrial space district. Under both factors, Taiwanese FDI in Chinese mainland gradually reach higher regional agglomeration.In terms of Taiwanese investment in Chinese mainland, such capital agglomeration index as PI, PPI, PAI and SI show the regional agglomeration of Taiwan-funded enterprises in three economic districts including the Yangtze River Delta, Pearl River Delta and Circum-Bohai Sea Economic Zone. The Hoover Gini Coefficient index and dispersion coefficient show uneven distribution of Taiwan's capital, and to be exact, it's a high degree of agglomeration. In addition, the index based on time series illustrates the changing of regional agglomeration from Taiwanese FDI Chinese mainland.In terms of guidance mechanism of Taiwanese investment in Chinese mainland, three kinds of mechanism can explain regional agglomeration. First, labor cost advantage, resource-obtain as well as geo-economic factor compose inner drive for production cost. Second, availability of funds, the degree of market-opening, production cooperation as well as industrial chain compose outer drive for production and operation. Third, preferential policies, investment environment and local customs as well as culture compose macro incentive mechanism. Three types of factors influence each other and determine regional agglomeration of Taiwanese investment. Final, component analysis based on such factors illustrates real existence of regional agglomeration.In terms of effect of regional agglomeration from Taiwanese FDI in Chinese mainland, the writer determines three kinds of effect according to different levels of impact. First, impact on local enterprises exists as the form of overflow effect, scale effect as well as industrial chain effect. Second, impact on regional industries is located in such aspects as industrial competitiveness, structure as well as long-term development. Third, impact on region economic development is located in the regional development mode, the total regional development as well as its cooperative and event development.In accordance with the current situation of regional agglomeration from Taiwanese FDI in Chinese mainland, although such agglomeration tends to be normal, however, it will confront challenge as the mainland tighten her economic and monetary policies, especially the declaration of《New Labor Contract Law》, operation of the same tax ratio for domestic enterprises and foreign enterprises as well as the adjustment for export tax rebate rate. Confronting such problems, Taiwan-funded enterprises will perhaps bring forward various of challenges, such as Taiwanese divestment, transfer as well as new industrial upgrading. Such problems would directly influence existence and development of regional agglomeration from Taiwanese FDI in Chinese mainland.To sum up, the government should take a more active attitude to absorbing Taiwan's capital and guiding its regional agglomeration. On basis of rational regional gradient distribution as well as innovative financing system, the government should promote new type of investment mode, which will absolutely serve the enterprises, strength learning-effect of local industries to facilitate the exploration oriented international markets for the mainland-funded and Taiwan-funded enterprises.