The Effects Of Cross-strait Economic Integration On Taiwanese Wages

Mainland China and Taiwan have a complex historical and cultural relationship and economic integration between the two has met with numerous difficulties.The article mainly analyzes the effect that Cross-Strait economic integration has had on Taiwan and explores how to take measures to smoothly move forward with integration.Taiwan is currently searching for new avenues of sustainable economic growth.Due to China's newfound economic significance,the solution likely lies in economic cooperation with the Mainland.However,in the wake of 2014's unprecedented anti-integration demonstrations in Taiwan,it is clear that many suspect that economic integration has lowered or will lower the welfare level of Taiwan's residents.One notion is that integration could cause Mainland China and Taiwanese wage levels to converge to a point in the middle(which would be lower from Taiwan's perspective).Generally speaking,there are many different opinions on the potential effects of integration,and different studies have reached different conclusions.The article uses the amount of Taiwanese trade with and investment into the Mainland to represent economic integration,and it develops a model to explain integration's relationship with the wage level of Taiwanese workers.According to the model,wage and trade value have a positive relationship;whenever trade increases by 10%,wage levels will also increase by 0.63%.On the other hand,Cross-Strait investment was shown to not have a statistically significant effect on wage.This means that Taiwanese popular resistance to integration is not due to wage convergence and is probably caused by other reasons.For example,some might fear that Taiwanese goods would be unable to compete with cheap Mainland-produced goods or the worsening of the unemployment problem(youth unemployment problem in particular).Previous research shows that the majority of Taiwanese residents lacked adequate information on the topic of economic integration with the Mainland and its possible effects.It is possible that they have developed misconceptions as a result of this.Furthermore,there are individuals and groups in Taiwan that have a vested interest in the prevention of further integration.Thus,in order to further integrate,the Taiwanese government ought to take directed measures to change the orientation of popular opinion and increase support for integration with the Mainland.The most important step to take is to better publicize the possible benefits of economic integration.In light of Mainland China's rise and the Taiwan's increasing economic dependence on the Mainland,now it is necessary for the Taiwanese government to consider how all of its actions will be interpreted by Mainland China.It must also factor in the impact their actions will have on future Cross-Strait relations.This is the only way to smoothly continue Cross-Strait economic integration and development.