New Economic Development Opportunities for Taiwan in the Post-ECFA Era
The main aim of this paper is to analyze the new opportunities for Taiwan’s ongoing economic development in the era following the signing of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China.
The paper begins with an analysis of the pattern of “cross-strait” trade between Taiwan and China. This reveals that, although Taiwan’s exports to China have continued to grow over the past few years, the share of China’s total imports from Taiwan has fallen. However, if Taiwan can succeed in leveraging ECFA to develop the Chinese market more effectively, this would reduce the competitive pressure to which Taiwan is exposed, and enable Taiwanese companies to steal a march on their major competitors. The overall impact on Taiwan’s economic development would thus be positive.
The paper then goes on to analyze the benefits that ECFA will bring to Taiwan. This analysis suggests that implementation of full trade liberalization under the ECFA framework would benefit the Taiwanese economy as a whole. Evaluation of the effects on trade of the ECFA Early Harvest List (EHL) items, implementation of which began on January 1, 2011, indicates that there has been significant growth in Taiwanese exports to China in the 539 items included in the EHL. ECFA is thus already starting to bear fruit.
Besides the trade-related effects, this paper also analyzes the transformation in industrial collaboration that ECFA may be expected to stimulate in the future. Currently, both Taiwan and China find themselves at a crossroads, with their respective economies undergoing a process of dramatic transformation. This situation creates scope for cross-strait industrial collaboration. Taiwan and China should endeavor to grasp this opportunity, exploiting cross-strait industrial collaboration as a means of invigorating their economies.
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New Economic Development Opportunities for Taiwan in the Post-ECFA Era
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