Taiwan’s Regulations on Economic Exchanges with China and China’s Responses: Implications for China and Taiwan’s accession to the CPTPP

China and Taiwan are WTO members and have signed the ECFA (a de facto FTA). However, Taiwan has placed numerous trade and investment restrictions on China, primarily due to national security and industrial development concerns. China claims that these restrictions violate WTO rules but avoids seeking dispute resolution through the WTO on the grounds of the “one-China principle.” Instead, China has offered economic incentives to gain the support from Taiwanese companies and citizens but has largely failed to do so due to the heightened awareness of the negative effects of economic integration with China among the Taiwanese people and the long-standing incumbency of the DPP administration. In response, China has recently increased pressure on Taiwan through various “economic sanctions.” To do so, China imposed sanctions within the bilateral framework of the ECFA rather than through the WTO to avoid the internationalization of the Taiwan issue. In 2021, China and Taiwan applied for CPTPP membership, but China opposed Taiwan’s entry unless the Taiwanese government recognized the one-China principle, making China’s involvement in Taiwan’s accession process a critical element. This paper identifies justifications for Taiwan’s cross-strait economic restrictions, Taiwanese society’s tolerance for opening its economy to China, and the extent to which cross-strait exchanges are regulated under CPTPP rules as central agendas regarding the process.