A Study Of The Impact Of EU FDI On The Taiwan-Mainland China FDI Relationship

Since 1987,in which year the Taiwan government officially lifted the ban on visits by its citizens to relatives in the mainland,Taiwan's Mainland investment has increased at a very rapid rate,which boost the economic interaction between Taiwan-mainland China.In late 2001 and early 2002,WTO accession by both the mainland and Taiwan gave both sides an even brighter future on the economic cooperation.The mainland has become the top of the list of Taiwan's foreign investment from 2002,which exceeded the total sum of Taiwan's overseas investment. From 2003,the mainland has replaced America and Japan to become Taiwan's largest trade partner and export market.At present Taiwan ranked the mainland's 7th biggest trade partner and export market.The economic achievements gained by Taiwan and the mainland are greatly related to Taiwan's accelerated investment in the mainland.On one hand,the fast development of Taiwan FDI in the mainland forced the Taiwan government to loosen its restricts on Taiwan-mainland economic activities;On the other hand,by selling the products made by Taiwanese enterprises in the mainland back to Taiwan or to international market via Taiwan,the export growth of Chinese mainland has been fueled,which undeniably bolsters the development of the mainland economy. Therefore,the study on Taiwan-Mainland China FDI relationship has significant economical meanings.In addition,it also provides practical guidance on the issues of attracting more Taiwan FDI,strengthening the cross-straits economic ties and promoting the final political integration of Mainland China and Taiwan.EU,as one of the most important economies in the world,is the key region of both foreign investment inflows and outflows.Since 1979 China open policy,EU FDI towards the mainland has maintained the upward trend.Now EU is China's fifth source region for FDI inflows and its first source of technology import.Meanwhile, started from the 1950s,with the development of over 50 years,EU is Taiwan's largest foreign investor and has very notable impact on Taiwan's economy.Therefore,in the background of globalization,making EU FDI as an influential factor on Taiwan-Mainland China FDI relationship has ample theoretical reasons.Based on the global feature of the Taiwan-Mainland China FDI relationship,by studying the 3 mainstream bilateral FDI relationship:Taiwan FDI in the mainland,EU FDI in the mainland and EU FDI in Taiwan,This article considers EU FDI as an influential factor and aims to find the international factor which influences Taiwan-Mainland China FDI relationship.By establishing an econometric model,I deeply analyze in which way EU FDI to both sides affects Taiwan-Mainland China FDI relationship.