Cross-strait Economic And Trade Exchanges Between Taiwan's Economic Impact

In late 1980s, because of the international economic situations' great change,the relationship between Taiwan and mainland China has been relaxed. So businessman in Taiwan raised "a hot issue of mainland". Economy and trade relationship between both sides has grown quickly. Investment and trade and has increased rapidly. This kind of corporation has come to such a degree in both scale and increasing speed, which is of great importance to two sides even to the whole Asian area. Up to now, relationship between two sides of the strait has formed a new multi-level and multi-form economy and trade relationship pattern, which includes indirect tra'de, indirect investment, finance communion, technology corporation, service corporation, and human resource communion and soon. Among these pattens, trade and investment influence two sides most greatly. Limited by length, only from trade and investment point, this article has analyzed how economy and trade exchange of two sides has influenced Taiwan economy. Of course, this kind of come-and-go has influenced Taiwan economy in many aspects. This article mainly discussed from three aspects: the first aspect is its influence to the increasing of Taiwan economy and the corresponding increasing of employment and income level ; the second is its influence to upgrade of Taiwan industry; the third is how it affects Taiwan balance of payments.This article consists of five chapters: In the first chapter, the author has introduced the basic situation of economy and trade exchange between two sides; In the second chapter, mainly using foreign trade multiplier theory, the author has erected foreign trade multiplier model of Taiwan. Using this model, the author has analyzed how trade exchange between two sides wi I I affect economy groth and employment of Taiwan in quantitative ways. In the third cha'pter, the author has discussed that the investment of Taiwan businessmen to mainland China promoted upgrade of Taiwan industry, because they can move out enterprises that have no competitive advantages. In the fourth chapter, the author has discussed how trade and investment exchange between two banks affects Taiwan balance of payments. In the fifth chapter, the author has discussed the approaching pattern and trend of economy and trade relation between two sides after entering WTO.