|It is recorded in history that the trade links between Taiwan and Fujian had been broken since 1937 when the Japanese started to invade China. This concept has lead many scholars to believe that the trade across the Strait had come to a halt between 1937 and 1945. In this study, we discover that the volume of trade between Taiwan and China had increased continually during the wartime period despite a brief setback in the second half of 1937. It actually started to rise in the following year and reached a total of 14,000 million Japanese yen in 1941, an amount three times of that of 1937.
The trade increased largely due to the economic measures taken by the Japanese government during her military aggression to China. The Japanese had formed a big Trade Circle to include Japan, Taiwan and Mainland China. First in 1932 a trade link between Kwanto state and Manchuria was made, forming the Japan-Manchuria Trade Group. In the subsequent years of the 1930s, the link expanded to other parts of China, forming an even greater circle of trade area among Japan, China, and Manchuria. And after the breakout of the Pacific War, the circle widened to the Big Asia Circle. Under these circumstances, the trade between Taiwan and China became virtually an internal one, and tariff duties were greatly lowered.
Even so, trades across the Taiwan Strait were still largely restricted by the Japanese Empire's economic strategies. Generally speaking, at the beginning of the War, in order to avoid trade deficits, many restrictions were set up to limit overexporting to the Big Circle. But after the War Time System was set up, the trade within the Circle rapidly grew.