Financial Straits: China and Taiwan

Slowly, tentatively the Republic of China (Taiwan) and the People’s Republic of China [1] are overcoming their historic antipathy in recognition of mutual economic interest. Business means financial services and so heightened cross-border risk. David Coates reports from Taipei on the commercial opportunities and evident and emerging threats.

David Coates may be contacted on david.coates@live.co.uk

Cross-Straits economic relations have been building for over 20 years and now dominate Taiwan’s economic map. China-Taiwan trade totalled US$170bn in 2011. Taiwan’s trade surplus with China was US$78.7billion in 2011. [2] The ROC approved US$97billion of Taiwanese FDI in China in the period 2000-2011. [3] There are guesstimates of between 50-100,000 Taiwanese businesses in mainland China in 2012. Approved inward investment from China totalled US$122m in the first half of 2012, exceeded only by Japan. [4] According to Taiwanese immigration data, by the end of 2009, 300,000 mainland Chinese had been granted Taiwan residency. In mid-2012 there were 558 flights weekly between China and Taiwan with China having difficulty in accommodating extra demand within the 20% of airspace allowed by the military for civilian traffic. Two million Chinese tourists are expected to visit Taiwan in 2012 and Taiwan has recently relaxed restrictions on individual visits as distinct from travel in organised and supervised groups.