Calculating Cross-Strait Trade: An Analysis of Statistical Methods

Issues and Studies

Volumn 32, Issue 6, 1996, Pages 37-53

  Tso, Allen Y ^a  

^a NATIONAL CHENGCHI UNIVERSITY   (Taiwan)

Author keywords

Cargo in transit; Direct trade; Indirect trade; Taiwan mainland trade; Transshipment

Indexed keywords

EID: 1842532329     PISSN: 10132511     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (20)

1. See Richard Schaffer, Beverley Earled, and Filiberto Agusti, International Business Laws and Environment (St. Paul: West Publishing, 1990), 121-53.
2. Yun-Wing Sung, The China-Hong Kong Connection: The Key to China's Open Door Policy (Cambridge: Cambridge University Press, 1991); China Trade Report (Hong Kong), June 1995, 14-16.
3. Yun-Wing Sung, The China-Hong Kong Connection: The Key to China's Open Door Policy (Cambridge: Cambridge University Press, 1991); China Trade Report (Hong Kong), June 1995, 14-16.
4. Nicholas Lardy, China in the World Economy (Washington, D.C.: Institute for International Economics, 1994), 73-79.
5. Article 5 of the "Permit Measures for Trade between the Taiwan Area and the Chinese Mainland," promulgated in April 1993 and revised in 1994, states that cross-Strait trade, with the exception of certain specific cases, must be conducted indirectly. See Liang'an jingmao baipishu (White paper on cross-Strait economy and trade) (Taipei: Ministry of Economic Affairs, January 1996), 99.
6. Transhipped goods may actually be recontainerized and moved from one vessel to another, or from a ship to another type of carrier, such as train or truck.
7. Although some Hong Kong middlemen are actually set up by Taiwan companies, this should have little effect on the formula.
8. Liang'an jingmao baipishu, 75-76. These details were supplied courtesy of Mr. Pao Chia-yuan, an official of the Ministry of Transportation and Communications in Taipei. This regulation is applied to both domestic and foreign-owned carriers in order to protect the interests of domestic shipping companies.
9. This can be proved using the well-known theory of expected utility.
10. Although according to Taiwan customs regulations, exporters have to declare the final port of destination of their goods, in practice they only declare the first port of destination.
11. Taiwan customs requires FOB price quotes for exports and CIF price quotes for imports.
12. "A Comparative Analysis of Cross-Strait Trade Statistics and Their Methods of Calculation" (Mainland Affairs Council internal document, June 1995).
13. Kao Charng, Liang'an sandi jianjie maoyi de shizheng fenxi (An empirical study of indirect trade involving Taiwan, the mainland, and Hong Kong) (Taipei: Mainland Affairs Council, September 1995), 12-14; Kao Charng, "On the Problem of Calculating Cross-Strait Trade," Zhongguo dalu yanjiu jiaoxue tongxun (Mainland China Studies Education Newsletter), September 1995, no. 8:5.
14. Kao Charng, Liang'an sandi jianjie maoyi de shizheng fenxi (An empirical study of indirect trade involving Taiwan, the mainland, and Hong Kong) (Taipei: Mainland Affairs Council, September 1995), 12-14; Kao Charng, "On the Problem of Calculating Cross-Strait Trade," Zhongguo dalu yanjiu jiaoxue tongxun (Mainland China Studies Education Newsletter), September 1995, no. 8:5.
15. Kao, Liang'an sandi jianjie maoyi, 15.
16. The author wishes to thank Professor Kao Charng for sharing his insights on this question.
17. See Yuh-jiun Nancy Lin, "The Mainland Chinese Macroeconomy and Cross-Strait Trade: Retrospect and Prospects," Dalu jingji yanjiu (Mainland China Economic Studies) 17, no. 4 (September 1995): 87-105; Yuh-jiun Nancy Lin, "A Review of Cross-Strait Trade Development," Issues & Studies 32, no. 4 (April 1996): 46-59.
18. See Yuh-jiun Nancy Lin, "The Mainland Chinese Macroeconomy and Cross-Strait Trade: Retrospect and Prospects," Dalu jingji yanjiu (Mainland China Economic Studies) 17, no. 4 (September 1995): 87-105; Yuh-jiun Nancy Lin, "A Review of Cross-Strait Trade Development," Issues & Studies 32, no. 4 (April 1996): 46-59.
19. mh is the shipping cost of exports from mainland China to Hong Kong. To facilitate calculation, we can assume that the shipping costs for transshipment and cargo in transit are the same. In theory, the two could be calculated separately and then substituted in the formula, but the difference should not affect the results.
20. See China Trade Report, June 1995, 14-16.