The East Asian Economic Integration Regime and Taiwan

This article analyzes the impact of the East Asian economic integration regime on Taiwan’s attractiveness as a destination for international investment as well as Taiwan’s participation strategy. The results of the 1,019-sample questionnaire conducted for this study indicate that if Taiwan is excluded from East Asian economic integration agreements, 26 to 35 percent of the domestic and foreign enterprises included in the survey would reduce their investment in Taiwan. If Taiwan participates in an East Asian economic integration agreement, 23–37 percent of the enterprises would increase their investment in Taiwan. Thus, for the companies in the survey, the complete net investment effect of participation in the regime minus that of exclusion is between 49 and 72 percent. If Taiwan and China were to sign an economic integration agreement, 30–41 percent of the enterprises surveyed would increase their investment in Taiwan. Furthermore, the consensus among the enterprises in the survey is very clear and strong: Taiwan should give top priority to concluding economic integration agreements with China and the United States and any such agreements should preferably be comprehensive and multi-functional.