Economic Statecraft Across the Strait: Business Influence in Taiwan’s Mainland Policy

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.