“To Whose Benefits?” An Analysis of ECFA’s Domestic Distributive Effects From A Comparative Perspective
Date Issued
2016
Date
2016
Author(s)
Wei, Chieh
Abstract
This thesis gives a political-economic structurural analysis of ECFA’s distributive effects by studying the distributitive impacts of free trade, regional trade strategies of China and Chinese particularist business model. First, HO-SS model explains that when free trade brings overall profits, it usually causes income inequality as well. New trade theory further explains that there is externality of the real market like information asymmetry and transaction cost in the imperfect competition, and the nations tend to have trade strategies and regulate the market. The experience of NAFTA shows that free trade has caused income inequality. People with more factors of production gains from the free trade the most. Unskilled workers, on the other hand, suffer from lower income and higher unemployment rate. Reginal trade strategies of China are the second analytic perspective of this study. After The Chinese Economic Reform, China has joined several regional trade agreements. Through signing agreements with East-Asian countries, China has become one of the most important members in East-Asian economy. All the joint declarations of strategic partnership China has signed with ASEAN countries change China’s role in East-Asian security, and make China the other political economic power to compete with the United States in East Asia. CEPA which China signed with Hong Kong is an example of achieving the goal of economically and politically unity of China, by constructing the Great China economic formation with the the economic profits CEPA could bring. Finally, based on the finding of NAFTA and CEPA, this paper explores the distributive effects and income inequality of growing cross-strait trades in Taiwan since 1990s. After EFCA has been signed, the income inequality between bourgeoisie and unskilled workers has enlarged evidently. This distributive inequality phenomenon is caused mainly by the particularism of China and the crony capitalism in Taiwan, and the combining political structure creates the specific “brokers” who monopolize the benefits of ECFA. Taking exportation of fruit and Milkfish (Chanos chanos) for example, Chinese government has offered great profits to Taiwan’s “brokers” to achieve goal of political unity; meanwhile, these “brokers” gain most of this benefits from particularism compared with other Taiwanese who mostly gain little from ECFA.
Subjects
Distribution Effects
Free Trade
Regional Trade Strategy
Particularism
Type
thesis
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