Cross-Strait Economic Relations: Opportunities Outweigh Risks
ASIA-PACIFIC CENTER FOR SECURITY STUDIES HONOLULU HI
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Paradoxically, the economic relationship between China and Taiwan is thriving even as long-simmering tensions between the governments have increased during the presidency of Chen Shui-bian. Cross-Strait trade and investment have inescapable and intense political overtones. It is a low politics issue wrapped in high politics. Taiwan finds the economic opportunities on the mainland irresistible. Yet Taiwan recognizes that trading with China supports the strategy of the country representing Taiwans chief security threat. Cross-Strait economic ties bear strongly on Taiwans continued economic health and political viability, and also stir up the most divisive political issues in Taiwans domestic politics. This paper surveys the ways in which both China and Taiwan have politicized cross-Strait economic relations, mainly by tightly linking the economic relationship to their respective political agendas. While observers in Taiwan are prudent to thoroughly examine the implications of economic cooperation with the Peoples Republic of China PRC, a strong case can be made that Taiwans fears about economic integration with China are overdrawn. From the standpoints of both economics and security, the disadvantages to Taiwan of increased trade with and investment in China are arguably outweighed by the advantages.
- Economics and Cost Analysis
- Government and Political Science