The Political Economy of Sino-American Relations: A Greater China Perspective

The Political Economy of Sino-American Relations: A Greater China Perspective

The Political Economy of Sino-American Relations: A Greater China Perspective

The Political Economy of Sino-American Relations: A Greater China Perspective

Excerpt

In the 1980s the Asia-Pacific region was the world's fastest growing region economically and its record to date in the 1990s, despite occasional hiccups in some countries, suggests that that status will be maintained in this decade as well. The impressive growth rates of recent years are founded both on heightened flows of trade and investment within the region and on an everbroadening range of commercial contacts with external trading partners. Both have taken place within an increasingly congenial regional political context, especially after the collapse of the Soviet Union which has brought about a basically favourable power realignment on a global scale.

Within this overall pattern of Asia-Pacific economic dynamism, one aspect which has attracted particular attention in recent years has been the intensification of trade and investment linkages between mainland China, Hong Kong and Taiwan; so much so that observers have come to talk of 'Greater China' as a way of characterizing this new phenomenon. Although it was the decision of the Chinese government in the late 1970s to adopt 'opendoor' policies for economic modernization which acted as the trigger, the private sector in Hong Kong and Taiwan have been quick to see the commercial potential of ventures in and with China. While it is true that political sensitivities (most notably between China and Taiwan) have not been completely eliminated, economic logic has remained a powerful driving force behind this integration between the three economies.

Individually, the three Chinese economies are in any case important players in global trade and investment relations. China, Hong Kong and Taiwan have been occupying in recent years the eleventh to thirteenth positions amongst the world's trading nations; and China has now become one of the world's largest recipient countries of foreign direct investment (FDI), second only to the United States, while Hong Kong has assumed the status of the fourth largest FDI supplier in the world. With the emergence of 'Greater China', however, external trading partners are increasingly being faced with the need . . .

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