ABSTRACT
Since the mid-1990s, relations across the Taiwan Straits have been characterized by “political alienation cum economic integration.” While the Mainland and Taiwan are getting much closer economically, they are getting further apart politically on the “One China” concept. By the early twentyfirst century there were about 1 million Taiwanese living in the Mainland for part of the year, over 50,000 Taiwanese enterprises operating there, and over US$100 billion invested in the other side of the Strait. The Mainland and Taiwan are getting more interdependent economically: the Mainland has already become Taiwan’s largest export market and investment site and Taiwan’s foreign trade dependence on the Mainland is over 18 percent. Given this economic integration, theorists might predict a spillover effect on political relations. Yet growing economic and social interaction not only have yet to spill over onto political relations, but political alienation is getting deeper. This political-economic paradox is transforming the structure of cross-Strait relations. The paradox has redefined the strategic options facing policy-makers in Beijing and Taipei.
