ABSTRACT

This chapter provides an empirical analysis as to whether economic integration impedes the democratisation processes of Taiwan and Hong Kong and whether closer economic integration with China endangers rule of law in the latter entities. It focuses on the use of World Bank Good Governance Indicators as a parameter to analyse the impact of Taiwan's and Hong Kong's economic integration with China. The chapter explores press freedom, a central element for democracy, by Freedom House and Reporters without Borders in order to reflect "public perception". It discusses the complex relationship between trade, economic integration, democracy, and the rule of law, with a view to identifying "learning effects" and "undermining effects" in trading activities. Freedom House and Reporters without Borders measures indicate that closer economic integration with China will result in undermining effects regarding the freedom of the press in Taiwan and Hong Kong, leading to the conclusion that, ultimately, to "dance with the dragon" takes great skill and care.