The Entry of Mainland Chinese Investment into Taiwan

Abstract

This article examines the issues related to the admission of mainland Chinese capital and enterprises into Taiwan triggered off by Taiwan's membership in the World Trade Organization, including the coordination of political views, the adjustments in policies, the revisions of statutes, and the setting up of administrative monitoring mechanisms in Taiwan. The issue of entry represents the interaction of economic and security interests on both sides of the Taiwan Strait, and it reflects the Chinese leadership's united front offensive, the competition among the political parties in Taiwan, and the business community's articulation of its interests in the island. The analysis aims to illustrate legislative and other processes involved in the economic exchanges across the Taiwan Strait. These processes allow various parties concerned to set up obstacles that obstruct the desired economic exchanges. At the same time, the mutual economic interests, or at least the substantial economic interests on one side of the Taiwan Strait, constantly provide the momentum to overcome the obstacles. More importantly, the sophisticated business community can always find ways to overcome the obstacles in pursuit of their interests, for example, use of subsidiaries in tax havens.