ABSTRACT
This book argues that the complementary interests of the central and local governments were the main reason for the change in their interaction with Taiwanese investors. As discussed in Chapter 3, the interaction between Taiwanese businesses and local governments reached the level of frequent contacts in the period from 1987 to 1993. In this first period, the central Chinese government designed several beneficial regulations to encourage Taiwanese investment; both central and local Chinese governments focused on the importance of Taiwanese capital in contributing to economic development. As a result, the interaction between Taiwanese investors and local officials reached the level of a frequent but irregular pattern. Institutionalised interaction rarely developed in this period and Taiwanese investors were not able to exert their influence on local policies.
