Cross-Strait Trade and Taiwan’s Economic Development, including Impact of the 31 Measures

In 1979, the policy of “reform and opening” launched economic development in mainland China. At the end of 1987, Taiwan began allowing its citizens to visit relatives on the mainland, which opened up investment opportunities in China. Intra-industry trade driven by Taiwanese business investment in mainland China not only made cross-strait production chains more closely integrated but also made cross-strait economic and trade relations more complicated.

Since President Ma Ying-jeou took office in 2008, Taiwan and China signed 23 agreements, including direct flights, mainland Chinese tourism in Taiwan, and the Economic Cooperation Framework Agreement (ECFA). These measures greatly improved cross-strait relations and helped Taiwan’s economy. But since she took office in 2016, President Tsai Ing-wen has refused to acknowledge the 1992 Consensus, which has frozen cross-strait relations and compressed Taiwan’s international participation.

Not long ago, China unilaterally announced 31 policy measures to benefit the Taiwanese, affording “national treatment” conditions for Taiwanese businesses and people to invest and work on the mainland. In the future, it may be hard to avoid Taiwanese businesses and people moving to mainland China in large numbers. Facing this kind of unilateral opening, how should Taiwan respond?