Cross-strait Economic And Trade Exchanges To Research On The Effects Of Income Distribution In Taiwan

The paper investigates economic activities cross-strait. With official statistics from both Taiwan and Mainland, the paper observes and analyzes the long-term trends and time series data including growth rate of Taiwanese trade with Mainland, changes in import and export structure, trade dependence, changes in investment structure, investment dependence, structural changes in industry, unemployment rate, labor force, the residents’ income distribution, productivity and efficiency of Taiwan. The paper also explores the changes in Taiwan’s economic situation, the comparison of cross-strait economics and the new policies adopted by KMT after it regained the regime of Taiwan.Through the collection of secondary data, such as the Gini coefficient and family income quintile of income distribution trends, the paper use above-mentioned variables as well as other economic indicators in Taiwan to set up a model to conduct empirical analysis, and to explore the correlation between the changes in Taiwanese income distribution and the cross-strait economic activities; and attempts to have an initial exploration for the root cause.The main results are:(ⅰ) Taiwan’s trade dependence on mainland China and other parts of the world, Taiwanese GDP per capita along with Taiwan’s direct investment to mainland China reduce the income distribution inequality of Taiwan,(ⅱ) On the other hand, Taiwan’s direct investment to other parts of the world, FDI to Taiwan along with Taiwan’s investment in research and development raise the income distribution inequality of Taiwan.This paper suggests that future researches shall obtain more accurate data in the Taiwanese individuals and enterprises located in Mainland. This paper also recommends follow-up studies to conduct a longer period of observation and analysis of the impacts direction and significance caused by direct investment from Mainland to Taiwan.