The Taiwan-Mainland economic nexus: Sociopolitical origins, state-society impacts, and future prospects

Most researchers on Taiwan's Mainland investment are economists who tend to focus on the economic dimension of the Taiwan-Mainland nexus. Consequently they are unable to explain both the timing (why it started in 1987), the locale (why in Guangdong and Fujian), the ownership (why the preference for sole ownership), the investors (why small and medium enterprises took the lead), and the speed (why such a rapid rate) of Taiwan's Mainland investment. In this respect the aim of this article is to explore the sociopolitical dimension in order to gain a broader picture of the origins, impacts, and prospects of the Taiwan-Mainland nexus. First, we investigate to what extent the origins of Taiwan's Mainland investment were shaped by other than economic factors. Second, we study how the Taiwan-Mainland economic nexus has had a profound impact on Taiwan's state-society relationship. Finally, we briefly examine the future prospects for extending this nexus to the conception of the “Great Chinese Economic Circle.”.