ABSTRACT
This chapter focuses on economic relations and their possible effects on both formal and informal relations between China/Taiwan and three Central and Eastern European (CEE3) countries: Poland, the Czech Republic, and Hungary. Since there have been no switches in diplomatic relations in this region, and this is not expected for the time being, we examine whether stronger economic links lead to better perceptions of China and Taiwan in the region, and whether diplomatic gestures by the CEE3 generate greater economic engagement with either. Based on interviews with researchers, diplomats, and businesspeople, we found little evidence that economic interactions affect diplomatic relations. However, Taiwanese investments will have a better chance of enhancing political ties in the future if they focus on high-tech sectors rather than manufacturing and assembly. With regard to political ties affecting economic engagement, we found a clear link between the level of Chinese investment stock in the CEE3 and the depth of political relationships with Beijing. Recent developments that have evoked friendly gestures from some CEE countries toward Taipei suggest that they, too, may have an impact on economic links with Taiwan.
