Chapter I Introduction

I.3. Analytical Framework and Methodology

This thesis sets out to determine whether further economic integration between China and Taiwan is beneficial for both parties’ economies. In order to do so it must identify benefits and disadvantages of further integration. A secondary objective of this research is to determine if further integration is possible and whether or not it will it be possible for Taiwan to protect its economy. The operating question asks whether or not further economic integration between Taiwan and China would be mutually beneficial, and if the economies of Taiwan and China would be able to integrate successfully.

Definitions and Variables

This thesis identifies the likelihood of successful economic cross-strait integration as its dependent variable. In addition, this research has identified four independent variables that are deemed contributing factors toward successful integration: The number of taishang workers in the local Chinese economies, the number of state-owned enterprises (SOEs) in the local Chinese economies, the level of domestic trade barriers among China’s provincial economies, and the manufacturing and operating costs of integrating Taiwanese operations in China.

Hypothesis and subhypotheses

This thesis hypothesizes, based on the variables listed above, the developing trends of the path dependency of the cross-strait trade structure and the political economy of China’s provincial trade system, particularly the influence of endogenous protectionism, would not lead to a mutually-beneficial cross-strait trade relationship if economic integration is pursued further.

In addition, this thesis identifies four sub-hypotheses based on its independent variables:

First, it hypothesizes that a greater presence of taishang living and working in the local mainland economies has an overall positive effect on successful cross-strait integration. Second, it hypothesizes that provincial economies with large numbers of SOEs will engage in protectionist policies, stalling Taiwanese integration particularly to protect their own interests. Third, it assumes that any high endogenous trade barriers in the mainland economy will discourage cross-strait integration. Fourth, it hypothesizes that there is a limitation to how far Taiwanese investors are willing to locate their operations before it is deemed too costly or inefficient. That is to say, Taiwanese investors take geographic proximity and operating costs into account when considering economic integration.

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Measuring success

In order to measure the success of this thesis several benchmarks must be established.

Using the World Bank’s estimate for a regional average of 6.2 per cent growth this thesis will determine whether or not the parties studied, Taiwan, Guangdong, and Fujian, three of the Asia-Pacific’s most robust and advanced economies are able to meet this criterion. This thesis has established four measurements that must be met. First, all parties should benefit from growing trade volume. Should trade decrease, integration under ECFA can be assumed to do harm.

Second, both Taiwan and China would need to maintain healthy economic indicators. This measurement includes GDP growth, and strong performance among industrial sectors (primary, secondary, and tertiary production). Third, both parties must do their best to avoid creating asymmetrical conditions and actively avoid exploiting disadvantages. Finally, integration must ensure that no systemic shocks occur. Shocks may include phenomena such as industrial hollowing out, or subsequent sector transformations.

Research methodology

The focus of this research is to update the literature and explore current phenomena on cross-strait integration. Its primary focus is on cross-strait integration in the “ECFA era,” and looks at economic trends rather than government policy. Policy is provided as supplemental information if necessary, but in the course of conducting research it has been noticed more often than not that cross-strait trade occurs despite and in spite of official policies. It has found that economic forces and actors in nearly all cases disregard policies and restrictions, or find ways to work around them.

This research structures itself as a comparative literature review with quantitative data presented to help provide a solid understanding of cross-strait trends. Findings are largely qualitative because determinants of cross-strait integration tend to emphasize behavioral trends, therefore the majority of this work’s findings are derived from policy reports and academic papers. Additionally, due to the contemporary nature of this research, many sources cannot yet be found in journals or databases. It therefore relies on news reports, communiques, and press releases in order to identify current trends.

Due to the peculiarities of Taiwan’s nature, acting as both a sovereign body in the Taiwanese narrative and as a local-level economy in the Chinese narrative, it is important to consider all cases herein studied as units of political-economies rather than as political bodies.

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The provinces of Guangdong and Fujian are the primary case studies used in this analysis. Their proximity to Taiwan, cultural linkages, and long history as investment locations from the earliest stages of opening and reform make them ideal. Sustained Taiwanese investment in these provinces and their gradual convergence with Taiwanese industry make them important cases in order to understand the greater trends Taiwanese business will likely face on the mainland in coming decades. As such, case studies on the mainland will often refer to only Guangdong and Fujian’s provincial figures and trends, though it is unavoidable to make references to the People’s Republic of China when discussing greater trends or policies. Hong Kong has been used as a minor case study due to the similarities of its Closer Economic Partnership Agreement (CEPA) and integration with that of Taiwan’s ECFA. The Pingtan Pilot Free Trade Zone is given special examination due to its operation as a strategic special economy aimed at facilitating deeper integration with Taiwan.

Research limitations

This research runs into several limitations, primarily in accessing specific datasets from mainland sources. China’s reports are notoriously delayed, and in many cases they do not present data in an orderly fashion. Some developments, particularly ECFA, are too recent to articulate quantifiable trends, and in other instances developments are too recent to give a full fair appraisal. Databases have been used when possible and qualitative reports have been used to fill the gaps or supply supplemental data to help create a greater narrative. By looking at trends and certain values it is possible to determine a fairly accurate picture of the development of Taiwanese investment preferences. Taiwan and China quite often do not have standardized measurements for their reports, and qualitative terms for native industries on both sides of the strait must be viewed with some understanding of exaggeration or inaccuracy in certain cases.

Reports from China are inconsistent in their years reported, and most recent data reported in for some measurements vary by several years. Additionally, the language barrier in conducting this thesis adds limitations to the research being conducted.

Organization of the Thesis

This thesis is organized as follows. Chapter II will introduce qualitative and quantitative findings regarding the political economies of China, with special attention given to the Provinces of Guangdong and Fujian. Development and incentive policies will be analyzed to gain an

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understanding of the mainland’s orientation towards integration. Chapter III looks at the political economy of Taiwan and its orientation toward integration. Attention is given to Taiwan’s primary economic actors, the taishang, and its small and medium enterprise-driven (SME) economy. Chapter IV explores findings related to cross-strait trade and current patterns of hollowing out. It explains how convergence is related to the development of today’s asymmetric trade flows. It then gives additional attention to the development of the Pingtan Pilot Free Trade Zone and the details of Hong Kong’s experience with integration with the People’s Republic of China (PRC, also referred to as the mainland, mainland China, or China) through CEPA. This thesis will then discuss the ramifications of integration under ECFA in Chapter V. Chapter VI will provide concluding remarks.

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在文檔中 兩岸經濟互動: 保護主義下與中國南方形成整合體制的可行性 - 政大學術集成 (頁 21-25)