The political economy of Taiwan’s regional relations

Abstract In a world of globalized markets, sizeable core states gain greater benefits from economic integration. Small peripheral states generally increase in trade incomes yet at cost of sovereignty and agenda decisions. Recent studies in the field of political economy have demonstrated that concerted economic integration efforts actually lead to disproportional gains for bigger powers at the expense of smaller neighboring states. This differential in integration benefits results in political disintegration for the latter.1 In the case of Asia Pacific, Taiwan is situated at the forefront of regional superpower China’s unification campaign. We examine the history of Taiwan’s cross-Straits relations highlighting its experience with China’s various forms of power. For other smaller states in the region, what lessons can be learnt from Taiwan’s experience in the last few decades characterized by China’s “peaceful ascendance” and regional bloc initiative? We suggest that Taiwan serves as a reference for other states in the region. We discuss on the implications of China’s economic integration projects, such as the Belt and Road Initiative (BRI) and the role of Taiwan in the political economy of regional relations. Not only can its experience provide reference data for other small states like canary in the mines,2 but it can also be a facilitator of synergetic strategies among smaller state to broker new possibilities under China’s expansive influence.