Paper Summary:

In this paper the author looks at how China is forcing Taiwan to change its business strategy from manufacturing to more high-level industries such as consulting and financial services.The paper suggests that China wants Taiwan to act as a liaison, using their similar language culture and business practices.The author concludes with an outlook for the future for Taiwan's ever changing and strained economy in respect to China. Introduction
Economic and Political Overview of Taiwan
Cross-Straight Relations
Taiwan's Evolving Success Story
The "Hollowing Out" Effect of Taiwan's Economy
Taiwan's Next Steps

From the Paper:

"This heavy reliance on trade has driven Taiwan's rapid growth in recent decades. However, as a small island population with limited natural resources, authorities are very conscious of Taiwan's vulnerability in a turbulent world. The impact of the crisis in Asia on Taiwan's heavily export-oriented economy, while mild in comparison with most of the region, has borne this out. This experience has reinforced Taiwan's major policy directions, which aim to strengthen the domestic economy through infrastructure development, upgrading of industry and the expansion of value-added service industries."

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