Summary: | 碩士 === 世新大學 === 經濟學研究所(含碩專班) === 91 === Since the 1990s China geographical economic development strategy has begun to focus on the greater Shanghai area away from the South. Shanghai is upstaged to play the locomotive role for the development of the Yantze river region. In the early 1990s China also set establishing a “socialist market economy” as the final goal of economic reform, thus closing the earlier reform chapter characterized by “crossing the river by touching the stone”. Since then, economic reform has deepened and economic opening widened. Shanghai has achieved unprecedented economic growth averaging over 10 percent per year. The city landscape has gone through equally impressive transformation. In the meantime, the economic relationship between Shanghai and Taiwan has greatly advanced. By 2001, Taiwan has invested US$ 294 million in Shanghai, or 6.7\% of total foreign direct investment. Trade between the two regions has greatly expanded. Taiwan’s exports to Shanghai rose from US21 million in 1990 to US$ 2370 million in 2001. Shanghai’s exports to Taiwan rose from US$ 24 million to US610 million during the same time period. Taiwanese now residing in Shanghai are roughly estimated around 300 thousands and growing.
Taiwan is an island economy with a population size of 22 million while Shanghai is a large metropolitan area with a registered population of 13.4 million (2002). Shanghai has an additional 3-4 million undocumented population working and living there, i.e., persons without “hu-kou”. Therefore, Shanghai’s truth population size is not significantly below Taiwan’s. Although the two localities are separated by the pacific ocean, a couple of hours’ direct airtime is sufficient to carry people from on locality to the other. Shanghai, with a per-capita income of over US 5,000 in 2002 (2000 prices), is the richest city in China. Taiwan, with a per capita income around US 14,000, 2.8 times greater than Shanghai’s, is well ahead. However, Taiwan’s income lead over Shanghai had been even much grater in the early 1990s, about 6 times, only to be steadily eroded by Shanghai’s dynamic growth. As the trend continues, Taiwan’s lead over Shanghai will further be narrowed. Since competitiveness should drive income levels, this begs the question: what determines the respective competitiveness in Shanghai and Taiwan? This knowledge is critical to the understanding on how to raise competitiveness and income levels.
To answer this question, the thesis endeavors to study the competitiveness of Shanghai and Taiwan. Drawing from the competitiveness and economic growth literature, the thesis attempts to identify the “principle components” of the determinants of the competitiveness for Shanghai and Taiwan, respectively. For each locality, the paper then tests the hypothesis that the competitiveness indicators determine the level of per-capita income in order to reveal the robustness of the former.
The thesis finds that the three main determinants of Shanghai’s competitiveness are, in order of explanatory power, knowledge economy and technology, infrastructure and government efficiency, and the marketization of the economy. On the other hand, the three main determinants of for Taiwan ‘s competitiveness are, in order of explanatory power, human capital, knowledge economy and technology, and economic openness. It also finds that competitiveness indicators are significant determinants for the level of income for both Shanghai and Taiwan.
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