Taiwan's Economics

INTRODUCTION

This project takes the perspective of Taiwanese businesses inclined to invest internationally. Since 1987 Taiwan's main international business partner has been China. The Chinese market has always been attractive to Taiwan business people, because it offers an immense population, lower production costs, and a common language, and cultural background. However, overall, Taiwan's economic integration with China has been somewhat limited due to their hostile history with each other. Taiwan was born in the aftermath of the Chinese Civil War in 1949, in which General Chiang Kai-shek fled to the small island and forming his own government. China thus views Taiwan as a renegade province that will eventually unify with the motherland. Taiwan however, views itself as a de facto but not de jure independent nation. Because Taiwan refuses to acknowledge itself as part of "one China", Taiwanese businesses are limited in the amount of trade and investment it can carry out with its huge neighbour. Some say these limitations pose a great threat to the economic future of both Taiwan and China's economies. More and more Taiwanese businesses such as BenQ are moving their manufacturing to the mainland which offers much cheaper production costs. Moreover, much of Taiwan's IT industry is based on exports to China. The challenge for Taiwanese businesses now is how to find ways to succeed in the global marketplace - with or without China. This project takes ten seminal articles and ten current events articles that relate and add value to ten chapters in the course textbook. These articles are also chosen to stimulate thinking about the Stakeholder that is Taiwanese international businesses. The conclusion of this project summarizes the new ideas gained from the articles concerning the Stakeholder.

The article "Returning Home or Selling Out? Taiwan's China Debate" by Denny Roy touches upon the debate of Taiwan's desired future relationship with China, which has both political and economic facets. This seminal article connects with chapter 3 of the text in that it brings a new aspect of the forces affecting international businesses. In essence, another factor that an international business must consider is the impact of doing business with a foreign nation has on its domestic nation's security and sovereignty, which may ultimately affect the future of the international business.

Although, Roy's paper is divided into two main sections, "China and Cross-Strait Politics" and "China and Cross-Strait Economics", the writer admits that the economic relationship with China is very much politically oriented. Most Taiwanese agree that China is a rich and alluring market for their businesses because of China's huge population, lower production costs, and common language and cultural background. The problem that Roy mentions is "whether Taiwan should accelerate its economic integration with China or maintain limits on cross-Strait interaction and commerce out of concern for national security" (Roy, 5). Roy explains that if Taiwan's economy is too intertwined with China's the Chinese might threaten Taiwan's access to Chinese markets unless Taiwan unifies on China's conditions. Other fears include the kidnapping of Taiwanese citizens residing in China. Essentially, Taiwan's business opportunities with China are massive but because of its political

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