Cross-strait economic integration in the regional political economy

Abstract

The recently signed Economic Cooperation Framework Agreement between Taiwan and China is not only a result of the intensifying economic relationship across the Strait but is also to further secure the connection between the two sides. Taiwan enjoys short-term economic benefits but ECFA favours China's political intentions in the longer term. Moreover, putting cross-Strait economic integration into a regional context, Taiwan is likely to join the current wave of "China-centred" regionalization. China's gravity in regional economic integration has been greatly enhanced subsequent to the recently signed trade agreements with Southeast Asian countries, Hong Kong, Macao and Taiwan. China's expansion of power in East Asia could pose a challenge to the status quo in the region and American interests in particular. How the US responds to China's increasing dominance in the regional economy is critical for the future development of economic integration in East Asia.