This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book focuses on the changing nature of the state in Taiwan and the making of its economic policy toward China. It discusses the process of democratization in Taiwan and its impact on cross-Straits relations. The book analyses the general trend of Taiwan's policy toward China and China's reunification policy "Economic rationality" is distorted in this special kind of economic relationship. It demonstrates that interagency conflicts result partly from the split in the political elite precipitated by the democratization process and partly from the political-economic tangles of cross-Straits policies. The book evaluates the autonomy of the state and its capacity to lead the market mechanism in cross-Straits economic relations. It argues that the ascendance of civil society, especially the business community, has led to a new type of state-society interaction.