China’s Economic Policy Toward Taiwan: An Empirical Analysis

Abstract

Since the release of “A Message to Compatriots in Taiwan” by the Standing Committee of the National People’s Congress (NPC) in January 1979, the Chinese leadership has adopted the long-term objective of “peaceful reunification” in guiding cross-Strait relations.¹ In the new constitution of the People’s Republic of China (PRC) in 1982, a new provision was added: Article 31 stipulates that special administrative regions may be established when necessary, and “the system to be instituted in special administrative regions shall be prescribed by law enacted by the NPC in the light of specific conditions.”² The establishment of special administrative regions and the subsequent “one country, two systems” formula were designed to apply to Hong Kong, Macau, and Taiwan.