New pattern in cross-strait economic and trade development

Editor's note: Liu Kuangyu is an associate research fellow with the Institute of Taiwan Studies under the Chinese Academy of Social Sciences. The article reflects the author's views and not necessarily those of CGTN. The article has been translated from Chinese and edited for brevity and clarity.

According to statistics from China's General Administration of Customs on Monday, total trade between the Chinese mainland and Taiwan reached $292.97 billion in 2024, a year-on-year rise of 9.4 percent. The State Council Taiwan Affairs Office revealed that in the first three quarters, 5,725 Taiwan-invested enterprises were newly set up in the Chinese mainland, a year-on-year increase of 5.6 percent. At the same time, the mainland and Hong Kong remained the largest source of Taiwan's trade surplus, as well as its primary source of imports and destination for exports. 

Following the meeting of the Political Bureau of the Communist Party of China Central Committee in September last year, which outlined a package of policies and measures to drive incremental growth and stabilize foreign trade, the total value of China's import and export of goods trade surpassed two major thresholds of 42 trillion yuan and 43 trillion yuan during the year, with the growth exceeding expectations. The development has set a historic high, achieving a "triple rise" in total volume, incremental growth, and quality.

Overall, the Chinese mainland will continue focusing on promoting cross-strait economic exchanges, strengthening industrial cooperation, and deepening integrated development. It aims to establish platforms and provide convenience for Taiwan businesses and enterprises to expand their market presence in the mainland and seize the market opportunities presented by the comprehensive advancements in Chinese modernization.

Firstly, cross-strait economic and trade cooperation will be deepened to empower integrated development. In recent years, the mainland has continuously improved its public policies and governance systems for Taiwan and systematically and meticulously studied and implemented relevant measures. These efforts have created more favorable conditions for Taiwan people and enterprises to live and operate on the mainland, removing numerous policy barriers and practical obstacles that hindered cross-strait integration.

Secondly, efforts have been made to cement and strengthen supply chains and accelerate industrial upgrading. Against the backdrop of a complex and ever-changing global economic landscape, supply chain restructuring and technological changes, and the Taiwan authorities led by Lai Ching-te attempting to "decouple" the two sides of the Taiwan Strait, cross-strait industrial cooperation faces fresh opportunities and challenges.

At the end of last year, several important industrial exchange events were held. Scholars and business practitioners from Taiwan pointed out that the mainland's mega market and capital scale, its complete supply chain, and world-class infrastructure complement Taiwan's advantages in cutting-edge industries like semiconductors, precision machinery, and industrial internet, while also providing fertile ground for emerging sectors such as new energy, biomedicine, cultural creativity, and high-end services. 

At the same time, due to its shift toward high-quality development and its continuous expansion of domestic demand, along with its strategic focus on AI, advanced semiconductors, the digital economy, and green industries, the Chinese mainland is growing into a key force in reallocating global factors and resources. This, in turn, provides Taiwan businesses in advantageous sectors like telecommunications an opportunity for deeper integration into the mainland's production and supply chains and the new quadrangular trade (involving the Chinese mainland, the Taiwan region, Southeast Asia, and European and American markets), promoting their transformation, upgrading, and overseas expansion. It also signals that innovation-driven development is becoming the "primary driver" for building a modern industrial system on both sides of the Strait.

Currently, cross-strait economic and trade relations face risks and challenges such as the extreme coercion of "Trump 2.0", as well as the attempt by Lai's "Taiwan independence economics" to build an "economic foundation for Taiwan independence" and push towards "securitization, weaponization, and internationalization of Taiwan's economy". However, the impressive data and the simultaneous rise in both volume and quality indicate that "decoupling" is a misguided path, sanctions and confrontations will lead to a dead end, and the "economics of Taiwan independence" is a road to destruction.