Conclusion

Abstract

This book has explored the dual process of deepening economic integration and intense political rivalry in relations across the Taiwan Strait. In this paradoxical development, Taipei’s policy of restricting the pace and direction of trade and investment flows to the mainland has not been successful despite its reputation as a strong state. At the same time, Beijing’s policies—designed to stem the separatist drift on the island through engagement with trade and investment—has only driven the two sides further apart politically. In an attempt at capturing the dynamics of cross-Strait relations, I first analyzed the politics of strategic interactions between the two sides. I then examined the specific policy designs of both sides regarding the flow of trade and investment across the Taiwan Strait. Finally and most importantly, I analyzed state-business interactions with regard to deepening economic relations between the two sides. The analytical focus of the book is on the organizational characteristics of the private sector and the institutional foundations of state—business interactions. Special attention has been paid to the role of small and medium-sized firms and their interactions with the state and with large firms in a multilevel and multidimensional process. This approach not only adds richness to Hirschman’s elegant theoretical formulation of economic statecraft, but also contrasts with prevailing analyses of East Asian political economy in general—and relations across the Taiwan Strait in particular—that regard economic development and cross-Strait interactions as a top-down process and treat private actors as simply reacting passively to state policies and state-sponsored projects.