There have been numerous studies of the impact of China’s entry into the WTO on the economies of the mainland and on Hong Kong. The purpose of this paper is not to duplicate such studies but to focus on the impact of China’s entry into the WTO on the economic links among the mainland，Hong Kong，and Taiwan（the trio）.

Though trade and investment flows are very intense among the trio，the economy of the Chinese Economic Area（CEA）or Greater China is basically outward looking rather than inward looking. The mainland processes semi-manufactures supplied by Hong Kong and Taiwan for exports to the US and the EU（European Union）. China is thus an important market for HongKong and Taiwan，and the latter two economies are important suppliers of China. However，if we net out the flow of semimanufactures between Hong Kong and the mainland and only look at the flow of final goods，the US and the EU are still the foremost markets for Hong Kong products.

The economic reality of the trio is that the US is their largest market，and Japan is their largest supplier of capital goods and technology. An inward-looking bloc to the trio excluding the US and Japan would not be in the trio’s long-term interest.

Official statistics on trade and investment exaggerate the extent of integration of Greater China，partly because part of the trade and investment flows via Hong Kong are double counted，and partly because the cross flows of semi-manufactures exaggerate the value of trade among the trio. The intense trade and investment flows among the trio in no way diminishes the dependence of Greater China on the world trading system. The WTO is thus very important for Greater China.

This paper is organized as follows. Besides the introductory section，section 2 outlines the evolution of economic links among the trio. Section 3 analyses the extent of economic integration among the trio in terms of trade and investment flows. To correct for the exaggeration of official statistics，adjustments are made for Hong Kong’s entrepot trade，and trade in semi-manufactures are also distinguished from trade in final products. Section 4 analysesthe impact of mainland’s entry into the WTO on the economic links among the trio，especially on the evolution of policy coordination between Hong Kong and the mainland. Section 5 concludes.