Cross-Strait Trade and Investment: Economic and Security Implications for the Republic of China

Abstract

This study examines the impact of security considerations on the Republic of China’s (ROC’s) economic policy, and focuses on trade and investment in the context of its relationship with the People’s Republic of China (PRC). It demonstrates how considerations arising from the recognition of the crucial role of economic growth and prosperity in security have had a major impact on the ROC’s economic policy and constrained its options in addressing grave politico-military security concerns.\nThe ROC is faced with a multifaceted security environment involving both economic and politico-military threats, largely emanating from the PRC. The ROC’s prioritization of economic growth and prosperity has encouraged policies designed to contribute to the success of its business sector including exports and foreign investment which have resulted in increasing dependence on the PRC.