ABSTRACT
This chapter examines the performance of cross-Strait trade, especially the establishment of the direct freight service between Fujian and Taiwan since April 1997. It discusses potential impacts of China's accession to the WTO on Xiamen's customs revenues and its financial and telecom sectors. Because of the high level of cross-Strait trade content in Xiamen's total foreign trade, Xiamen's trade performance has become very vulnerable to the development of cross-Strait relations. The chapter also reveals that Xiamen's foreign trade has now been dominated by trade with Taiwan and hence become vulnerable to the development of cross-Strait political relations. Furthermore, due to the underdevelopment of infrastructure facilities, especially seaports, in Xiamen and its limited industrial hinterland, it is very hard for Xiamen to substitute Hong Kong as the main transit point for cross-Strait trade in the foreseeable future. The chapter concludes with an assessment of Xiamen's prospects of becoming the entrepot centre for cross-Strait trade in the short and medium term.
