( 5 ) the Taiwan region’s room of international operation that is
compatible with its status; and
( 6 ) other matters concerning the achievement of peaceful national
reunification.
The Chinese leadership has been aware that the ‘political status of the Taiwan
authorities’ needs to be settled, as well as the ‘room of international operation’ of
the Taiwanese people. The straightforward answer would be: Taiwan shall become a
‘special administrative region’ like Hong Kong, whose government notionally derives
from the authorisation of the unitary state, whereas people in Taiwan may participate
in international organisations with a non-sovereign membership as the Taiwanese
authorities already do in the WTO, Asia-Pacific Economic Co-operation (APEC)
and the Olympics. The Chinese leadership now hopes ‘the achievement of peaceful
reunification’ may be reached ‘through consultations and negotiations on an equal
footing between the two sides of the Taiwan Straits’, but it is extremely difficult for the
Taiwanese authorities to make a deal without the endorsement of Taiwanese resi-
dents. But in any case the new Act has strengthened legal relations between the
Chinese mainland and Taiwan.
Economic co-operation
Economic co-operation between the Chinese mainland and the societies of Hong
Kong, Macau and Taiwan continues to develop. As the WTO allows members to
set up bilateral economic co-operation, the Chinese mainland and the HKSAR on
29 June 2003 signed an agreement or Closer Economic Partnership Arrangement
(CEPA). The CEPA, which took effect on 1 January 2004 , aims at reducing tariffs,
removing discrimination and facilitating trade and investment.
(^35) The HKSAR has
already applied a ‘zero tariff’ to goods imported from the Chinese mainland, while
the Chinese mainland promised to adopt zero tariffs for hundreds of Hong Kong
goods too.^36 The two parties agreed not to use anti-dumping or anti-subsidies
provisions against each other.^37 Co-operation in finance and tourism is crucial
for Hong Kong’s sustainable development. The central government promised to
encourage mainland banks to locate their international centres in Hong Kong and
also invite Hong Kong financial institutions to get involved in mainland financial
reforms, which means the Chinese mainland has opened its financial market to
Hong Kong banks.^38 Co-operation in tourism, on the other hand, opens the Hong
Kong market to mainland residents. Tourist consumption will stimulate
Hong Kong’s economy, which employs a majority of the population in the service
sector.
39
The two parties also promised they will co-operate in investment, customs,
food safety, e-business, small business and Chinese medicines.
40
(^35) CEPA, Art. 1. (^36) Ibid., Art. 5. (^37) Ibid., Arts. 7 and 8. (^38) Ibid., Art. 13.
(^39) Ibid., Art. 14. (^40) Ibid., Art. 17.