There are two main purposes of this project. First, in order to give policy suggestions for the government to improve the competitiveness of products of Taiwan in the market of China, we study the competitiveness of our exported products (the absolute competitiveness) and compare it with other main trade opponents’ (including Japan, South Korea and Singapore). Second, we try to find out reasons for the decline of our exported machinery equipments to China and give some suggestions to respond to this situation.