ABSTRACT
This chapter explains why and how Japan and Taiwan have been able to maintain and expand effective and viable economic ties over the last decade in the absence of any formal diplomatic or political relations. It shows that the motivational basis ensuring continuous economic exchange and cooperation is economic complementarity, hence mutual interest. The chapter argues that the paradiplomatic effort of various semipublic organizations on both sides that are bound together by a community of economic interests. It focuses on the institutional arrangements and environment of Japanese-Taiwanese economic ties in general and will shed light on some of the major problems afflicting the important relationship. Japanese trade and investment in Taiwan have long constituted the basis for shared economic interest and economic complementarity and have played an important role in Taiwan’s economic and industrial development. The civil aviation dispute attests to the salience of economic considerations underlying Taiwan’s relations with Japan.
