Economic Statecraft Across the Taiwan Strait

Abstract

The objective of this article is to understand how economic statecraft—broadly defined as the use of economic means by a government to influence the behavior of another government—has functioned across the Taiwan Strait. The dominant view in the literature is that economic interdependence increases Taiwan`s vulnerability to Beijing`s coercion. However, the argument here is that influence, rather than coercion, is the essence of China-Taiwan economic statecraft. As cross-Strait commerce has expanded, the Taiwanese business community has served as an intermediary through which Beijing influences Taiwan`s mainland policy. The moderation of the Democratic Progressive Party`s commitment to Taiwanese independence since the 1990s as a result of business lobbying attests to this thesis.