The integration of the trio has raised many policy issues. While this chapter discusses both Mainland—Hong Kong and Mainland—Taiwan policy issues, discussions of the latter issues are inevitably brief owing to the political deadlock after the election of Chen Shui-bian. As mentioned before, the economic performance of both Hong Kong and Taiwan have deteriorated greatly since the Asian financial crisis. Hong Kong has actively leveraged on its Mainland connections, leading to a sharp economic recovery since mid-2003. While economic difficulties have also spurred Taiwan towards closer economic links with the Mainland, the long-awaited breakthrough on direct transportation has yet to occur because of political animosity. As a result, Taiwan has not been able to utilize its Mainland connections to pull itself out of economic malaise.
KeywordsPolicy Issue Pearl River Delta Investor Sentiment Deep Integration Individual Tour
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