Political conflict and economic cooperation between Beijing and Taipei (Taiwan, China)

The Beijing-Taipei relationship is characterized by political conflict on the one hand, and economic cooperation on the other. This dissertation examines the interplay between these two phenomena, to determine which of them has become the dominating factor in Beijing-Taipei ties. The research finds that (1) the political conflict between Beijing and Taipei has seriously affected, and continues to affect, their economic cooperation; and that (2) the economic exchanges between the two sides of the Taiwan Strait have not muted their political conflict.; The first finding contradicts the common impression that the Chinese mainland and Taiwan have a high degree of “economic interdependence.” A more careful examination reveals that, owing to the political conflict, only a low level of economic interdependence exists between the two sides. This finding is further confirmed by a broader view that includes more players in the region for comparison. Despite Taiwan's investment in the Chinese mainland, Taiwan's trading economy is oriented towards Japan and the United States as a bloc rather than towards the Chinese mainland and Hong Kong. Using the case of Beijing-Taipei relations, the dissertation demonstrates the great effects of politics on economics.; The second finding lends support to one side of the liberal-realist debate on the pacifying effects of trade and investment. Cross-strait trade began in 1987. By comparing 1987 with 2002, the research finds few signs of political reconciliation; that is, 15 years of economic cooperation has not brought the two sides closer politically, though they now have closer economic ties.; Since conflict and cooperation are seemingly incompatible, the coexistence of political conflict and economic cooperation between Beijing and Taipei is a puzzle to resolve. Through an analysis of different sources of materials, the research finds that in cross-strait economic exchanges, a lot of political motives exist, and these motives serve to support the economic cooperation.