Economic Integration within Greater China: Trade and Investment Flows Between China, Hong Kong and Taiwan

Abstract

Economic integration is essentially a process of unification – the means whereby coherence is imposed upon previously separate, even disparate, geographical regions. It may be pursued as a domestic or international goal, although the simultaneous attainment of both may prove elusive. Recent efforts towards the creation of formal trans-national, regional economic identities, whether North American (NAFTA), European (EC) or Asian-Pacific (APEC), have sometimes been perceived as a threat to the establishment of a truly integrated global economy. By contrast, the remarkable degree of economic integration already achieved between southern China and Hong Kong (and, latterly, Taiwan) might ironically have a fissiparous effect on China's domestic economy. From this point of view, there is a danger that increasing economic integration within Greater China could threaten China's national economic identity, or at least compel its re-definition.

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