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

III. Revisions of Taiwanese Law Governing Cross-Strait Trade as in Compliance with WTO Rules




1. Proposal of "Active Opening, Effective Management"

Since September 1996, Taiwan has adopted a "no haste, be patient" policy on economic cross-strait relations, restricting Taiwanese investment in China. It was not welcomed by domestic Taiwanese business and the resentment erupted after the Asian financial crisis hit Taiwan. The severing domestic economic situation and restriction on investment in China would work together pushing Taiwanese business to a dead end. Facing the protest from domestic industries and the incoming accession to WTO, Taiwanese Government substituted "no haste, be patient" with new Basic Principles on economic and trade relations with mainland China, in August 2001[49].

Under the guidance of Basic Principles, the Executive Yuan adopted "active opening, effective management" as the new policy governing invest-in-mainland issues[50]. Since the administration of overseas investment is not a subject of WTO, it is not addressed in details in this article. Major improvements include the substantial increase of ceiling limitation on amount of mainland investment, permission of direct investment, permission of direct financial transaction between Offshore Banking Units (OBU) and those Chinese bank branches located in mainland. As discussed in prior parts, improvement in mainland investment policy is beneficial to cross-strait trade.

[49] President Chen Shui-bian (of pro-independence Democratic Progress Party) established Economic Development Consultation Council (EDCC) to study measures saving Taiwan economy. EDCC members are selected to represent "industry, government, and academy". Cross-Strait Section of EDCC offered the new four-point Basic Principles to substitute "no haste, be patient" policy, as included in the Consensus & Conclusion of EDCC (August 26, 2001). Basic Principles consist of four parts: Taiwan first; Global perspective; Mutual benefit; and Risk management.

[50] Enforcement Plan of "Active Opening, Effective Management" (jointly devised by MAC, Ministry of Economic Affairs, Ministry of Finance, Central Bank, Council for Economic Planning and Development, Council of Agriculture, Council of Labor), adopted at 2759th Meeting of Executive Yuan (November 7, 2001).