Really Going WTO?  (c) Simon Xi Zhang, 2002

I.   Legal Analysis of Cross-Strait Trade during Pre-WTO Period


Since the establishment of the People's Republic of China in mainland in 1949, there had been no economic activity across the Taiwan Strait in subsequent thirty years. The year 1978 marked the beginning of the current "reformation and opening" period in mainland China. The "reformation and opening" policy aims to turn China into a modern, wealthy, and powerful country through internal political and economic reform, and through exchange and co-operation with the rest of the world. For the first time in the history of the People's Republic, investors from the capitalist world were welcomed, including overseas Chinese from Hong Kong, Macau, Taiwan and Southeastern Asia.

With this historical background, goods and investment began to flow across the strait double-way. The amount of US Dollar value of cross-strait trade hit $77.8 million in 1979, when China became "open" to the outside world[8].

Though the cross-strait commercial activities were directed two-way as early as from 1979, trading with mainland China was illegal under Taiwanese law until 1990. From 1990 to 2001, only indirect trade with mainland was permitted. This Part I gives a description to Taiwanese law regarding cross-strait commerce before Taiwan and China became coequal WTO members in 2002.

[8] Census of Hong Kong Customs, quoted in Cross-Strait Economy Monthly Report (Mainland Affairs Council of ROC, Ed., January 1996). The indirect cross-strait trade through Hong Kong began from 1979. Official data from Taiwan Government begins with 1991.