Abstract
Both Taiwan and South Korea shared similar investment evolution in China, including the investment from SMEs to large firms, from labor-intensive manufacturing to ICT sectors, and from regions close to the home countries to Shanghai and Jiangsu Province. In terms of trade relations, the greater exports to than import from China has allowed both countries to run a tremendous trade surplus vis-à-vis China. After China’s industrial catchup in recent years, the growth model based on exporting intermediate goods to China is no longer workable. However, both Taiwan and South Korea have not yet found an alternative to completely replace the role of China. Both countries are facing unprecedented challenges to their economic growth prospects.
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Notes
- 1.
After the initiation of “three mini links” in 2001, free sea transportation, merchandise trade, and personnel exchanges between Taiwan’s two offshore islands (Kinmen and Matsu) and two cities in Fujian province of China (Xiamen and Fuzhou) have led to an upswing in Taiwan’s trade with China, surpassing its trade with Hong Kong since 2002. The three links in direct postal, trade, and transportation across the Strait have been fully implemented since 2008. Taiwan opened eight airports and three harbors to cater to direct trade and personnel traveling between the two sides.
- 2.
Passenger cars were excluded from the negotiation table. However, South Korea will abolish tariffs on gasoline buses and trucks from China within 15 years of the implementation, while China will eliminate duties on buses and trucks from South Korea within 20 years (Xinhua News Agency, 12 March 2015).
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Chiang, MH. (2018). Sustaining Taiwan’s and South Korea’s Post-Industrial Economic Growth: The China Factor. In: Post-Industrial Development in East Asia. Palgrave Pivot, Singapore. https://doi.org/10.1007/978-981-13-0274-9_2
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