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Introduction In the 1980s the Asia-Pacific region was the world's fastest growing region economically and its record to date in the 1990s, despite occasional hiccups in some countries, suggests that that status will be maintained in this decade as well. The impressive growth rates of recent years are founded both on heightened flows of trade and investment within the region and on an everbroadening range of commercial contacts with external trading partners. Both have taken place within an increasingly congenial regional political context, especially after the collapse of the Soviet Union which has brought about a basically favourable power realignment on a global scale. Within this overall pattern of Asia-Pacific economic dynamism, one aspect which has attracted particular attention in recent years has been the intensification of trade and investment linkages between mainland China, Hong Kong and Taiwan; so much so that observers have come to talk of 'Greater China' as a way of characterizing this new phenomenon.* Although it was the decision of the Chinese government in the late 1970s to adopt 'opendoor ' policies for economic modernization which acted as the trigger, the private sector in Hong Kong and Taiwan have been quick to see the commercial potential ofventures in and with China. While it is true that political sensitivities (most notably between China and Taiwan) have not been completely eliminated, economic logic has remained a powerful driving force behind this integration between the three economies. Individually, the three Chinese economies are in any case important players in global trade and investment relations. China, Hong Kong and Taiwan have been occupying in recent years the eleventh to thirteenth positions amongst the world's trading nations; and China has now become one of the world's largest recipient countries of foreign direct investment (FDI), second only to the United States, while Hong Kong has assumed the status of the fourth largest FDI supplier in the world. With the emergence of 'Greater China', however, external trading partners are increasingly being faced with the need * Throughout this study, the term, mainland China, the Chinese Mainland, China and the People's Republic of China are used interchangeably; and 'Greater China' is used as an economic concept to capture the precipitous Increase in economic interaction and integration between the three Chinese economies since 1979. 2 Introduction to carry out business activities and construct trade policie~ which take account of the complex set of economic linkages between the three economies. This means that they are no longer able to deal with one economy in isolation from the others. Clearly for all three economies, the United States figures as one of their most important external partners. This volume therefore endeavours to examine in detail, both from the perspective of the 'Greater China' economies as well as from the side of the Americans, many of the complexities of the SinoAmerican relationship. The end of the Cold War profoundly affected the pattern of international relations and led to assessments that the preoccupation of the previous half century with geopolitics and security would be replaced by enhanced concern about economic, social and environmental issues. However, in reality as the 1990s have progressed, it has also become clear that economic issues are still closely linked with political questions. ThIS means that any discussion of the economic dimensions of the Sino-American relationship needs to be set against the broader background of Sino-American political relations. As one of America's leading China watchers, Harry Harding, demonstrates in the opening chapter, there has been a range of troublesome political issues which have plagued Sino-American relations in the 1990s - some of these date back a long way, others are new on the agenda. The conference from which this edited volume derives was itself held at a time when relations between the United States and China were particularly tense in the aftermath of the VIsit to the United States by President Lee Teng-hui of Taiwan. Tensions actually heightened even further in the spring of 1996 at the time of Taiwan's presidential elections with Chinese military activity near Taiwan being counterbalanced by US naval deployments. However, as Harding argues, despite these problems, there are a number of internal and international factors which still provide durability and resilience to the relationship. Indeed, there are signs, in the second half of 1996, that some measure of stability is being restored to the Sino-American relationship. Thus, although there inevitably will exist a blend of divergent and convergent interests in the...

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