The Economic Integration of China, Taiwan, and Hong Kong: Implications for Korea's Trade Policy

Abstract

The rapid economic development and growth of the People's Republic of China has accelerated the economic partnership and integration among China, Hong Kong, and Taiwan, giving rise to a new Greater China Economy. Since signing the Closer Economic Partnership Arrangement (CEPA) with Hong Kong in 2003, the Chinese central government has been steadily expanding the scope of economic cooperation through a succession of additional and supplementary arrangements. The bilateral economic partnership between China and Hong Kong will only continue to grow further in the coming years as the Chinese government is favorably inclined toward endowing Hong Kong with special trade privileges and status. Moreover, the growing economic partnership between China and Taiwan, spearheaded by the signing and effectuation of the Economic Cooperation Framework Agreement (EC-FA) between the two countries in the June and September of 2010, respectively, will exert an increasing influence on neighboring countries in Northeast Asia. It is thus high time that we carefully examined and analyzed the implications of the increasing attempts at economic integration in Greater China Economy, especially for the Korean government’s trade policy vis-a-vis China, Taiwan and Hong Kong.