ABSTRACT
Taiwan and Hong Kong are among the EU's most important and dynamic economic partners. In 1997 Taiwan was its seventh largest source of imports while Hong Kong was ranked as its eighth largest export market. The EU's other commercial ties with the two maturing 'tiger' economies have also flourished in recent times. However, the EU's economic diplomacy frameworks with Taiwan and Hong Kong remain the most underdeveloped among the East Asian group, owing largely to issues of realigned and contested sovereignty. As discussed in Chapter 5, the EU's economic relations with China, Taiwan and Hong Kong cannot be easily disaggregated. The return of Hong Kong's political sovereignty to China in July 1997 and Beijing's sensitivity over the conferring of any international recognition to the 'province' of Taiwan have both narrowed the EU's economic diplomacy options and triangularised the diplomatic equation. Nevertheless, Taiwan's and Hong Kong's ascendancy within the international economic system has placed pressure upon the EU to greater prioritise the development of its economic relations with them. This predicament for the EU is considered by this chapter, which itself can be seen as a continuation of Chapter 5. Before moving on to analyse the EU's economic relations in detail, let us first introduce the economies of Taiwan and Hong Kong as well as the issues of sovereignty to be discussed.
